The globalization of healthcare and the impact on patient care
The globalization of healthcare has provided opportunities for many organizations to rapidly develop their products and to expand their network of customers. But with this globalization, we also need to realize there are also a number of important economic and public health concerns.
Healthcare organizations have an obligation to understand the interdependencies inherent in their supply chains, and to examine their supply chain practices through a strategic lens focused on the public’s health. We are seeing changes in where and how many healthcare products are produced and this is not always in the best interest of U.S. hospitals or our patients.
Mike Alkire, president of Premier Purchasing Partners, has been analyzing this trend for many years. “Today more than 90 percent of all nutritional supplements, facemasks, exam gloves, and other products are manufactured overseas,” says Alkire. “China manufactures two-thirds of the world’s aspirin and 70 percent of its penicillin. If there was a global pandemic, whose population do you think would get the goods?”
The current edition of Premier’s Economic Outlook examines these important issues. According to the analysis, there have been dramatic upticks in pricing for raw materials that are foundational to many healthcare products, including oil (up 28 percent in the last 12 months) and cotton (up 138 percent in the last 12 months). The increases are largely due to political instability and increased demand for raw materials from emerging nations.
"This is the current reality of the globalization trend," Alkire explains. "When we source from all over the globe, we're at the mercy of everything from foreign demand to economic development swings to weather trends, all of which we in the U.S. have almost no control over."
Alkire points out that instead of continually seeing suppliers dictating demand, those in healthcare need to help change this dynamic. We need to carefully consider the need for a diverse network of supply alternatives so we are not in a vulnerable position. This is just good business sense.
Mike Daly blogs regularly at Action for Better Healthcare.
