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Sustainable Implementation of New Technologies

Sustainable Implementation of New Technologies: A Valuation Method for Healthcare Supply Chains

SECOND EDITION

Alexander Mark Ehms

New York, USA

 


Abstract

The external environment in which most business exists is volatile, ambiguous, and ever-evolving. In the wake of the e-commerce evolution, health care services are adapting to provide online prescription refills, in addition to sharing patient information using database software and cloud computing. Sustainability is a key component and critical measure to consider when implementing change and taking on new projects. Long term sustainability is contingent on supply chain networks (SCN) working in cooperation to produce sustainable economic, social, and environmental outputs. In order for these networks to have successful interrelationships, valuation methods must be used to select projects that produce sustainable solutions. This paper reviews the pertinence of web based technologies to the healthcare industry in order to facilitate sustainable operations, while addressing methods of evaluation for selection of new technologies. The findings conclude that measuring sustainability is relatively subjective and that sustainability might best be managed as a “risk.”

Keywords: sustainability, value, healthcare, corporate social responsibility, sustainability performance management, risk management, supply chain, IT, software engineering, quality management

Glossary of Acronyms

  • AHP: analytical hierarchy process
  • GNH: gross national happiness
  • GRI: global reporting initiative
  • GSA: general services administration
  • HIPAA: Health Insurance Portability and Accountability Act
  • PPP: public/private partnerships
  • PV: present economic value
  • SCN: supply chain networks
  • SROI: social return on investment
  • VfM: value for money

Introduction

Like most industries, healthcare providers rely on customers in order to continue operations. In our lifetime, we have witnessed advances in modern technology that would have at one time seemed to be the dreamed up concoctions of a science fiction novel. We have also witnessed the rise and fall of many companies, whose failure to implement change had far reaching consequences. “Eastman Kodak is a picture-perfect example. It built one of the first digital cameras in 1975.” (18) For many reasons, some perhaps well justified, the company was slow to change the once highly successful business model. “The development of smartphones that double as cameras, has battered Kodak’s old film- and camera-making business almost to death.”(18)

With patients and/or caregivers who are progressively becoming more tech savvy, hospitals, pharmaceutical companies, and medical device manufacturers must tailor their services appropriately. Healthcare services such as nonprofit hospitals have seen a downward trend in terms of revenue growth over the past several years. “Total operating margins have remained negative from federal fiscal year (FFY) 2000 to midway through FFY07, according to the data, although the trend has improved slightly in recent years. That means hospitals are losing money on their core business of providing patient care.”(14) Admissions are falling due to increases in insurance rates and the availability of alternatives such as immediate care facilities, and telemedicine. For healthcare organizations, this means realignment of the firm’s fundamental strategic management plan; goals, objectives, and the strategy of the business operations, including maintaining visibility in a market where alternatives are numerous.

Healthcare facilities share a SCN with private manufacturing, distribution, and logistic firms. Meaning that healthcare supply chains house public/private partnerships (PPP). “A typical PPP example would be a hospital building financed and constructed by a private developer and then leased to the hospital authority. The private developer then acts as landlord, providing housekeeping and other non-medical services while the hospital itself provides medical services.” (2) Because of this relationship, the social/environmental outputs of long term sustainability might not necessarily align with maximizing the present economic value (PV) of the SCN. The concern is insuring that the SCN is selecting the best whole life outcome. This requires that “patient advocacy organizations, clinicians, medical clinics, health care policymakers at the Federal, State, and local levels, purchasers, payers, and both public and private insurers” (3) involved understand the importance of sustainable operations.

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Editor’s note: Second Editions are previously published papers that have continued relevance in today’s project management world, or which were originally published in conference proceedings or in a language other than English. Original publication acknowledged; authors retain copyright. This paper was originally presented at the 3rd annual University of Maryland Project Management Symposium in College Park, Maryland, USA in May 2016. It is republished here with the permission of the authors and conference organizers.


About the Author

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Alexander Ehms

Buffalo, NY, USA

 

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Alexander Ehms recently received his Master’s degree in Supply Chain and Operations Management from the University at Buffalo (The State University of New York) in Buffalo, New York, USA. Alexander holds a Bachelor’s of Science degree in Business and Associates of Science in Business Management, and has completed a four year university level certification program in Business/Environmental Sustainability. During five years of professional experience, Alexander has held titles such as supervisor, workforce coordinator, and Marketing Analyst. He can be contacted at [email protected]