Tuesday, October 15, 2013

GPOs: To be or not to be a member?

I recently completed a term paper from which the idea came about from discussions with a pharmacy director at a major hospital. While our discussion was centered around pharmaceutical shortages, a couple of comments that were made, sent me in a different direction that is discussed below.

Group purchasing organizations (GPOs) negotiate healthcare products and services (i.e. pharmaceuticals, medical devices, and cleaning services) for hospitals. The basic concept is that by pooling the demand from many hospitals into one, economies of scale can be created, thus obtaining lower prices from manufacturers and service providers.

Many hospitals will tell you that their GPO is great and saves them money and time. This is probably true. Other hospitals have chosen not to join a GPO, which means they must do all the negotiating themselves. They will tell you that joining a GPO would not save them money. This is probably true as well. Research confirms that GPOs save money and that GPOs do not save money. Therefore, the true answer probably lies somewhere in the middle.

My paper centered around determining when it makes sense for a hospital to join a GPO. Specifically, I wanted to know what the characteristics are for hospitals that choose to join a GPO and those that do not. While I do not have concrete answers, I believe that some hospitals are foregoing cost saving opportunities by continuing to belong to a GPO. However, to leave their GPO creates another set of challenges that were not discussed in-depth in the paper. Perhaps that is for next one.

If you are familiar with GPOs or other aspects of the healthcare supply chain, I would enjoy hearing your thoughts about this idea.

Monday, July 01, 2013

Trends In Higher Learning

As someone who plans to stay in academia for the rest of my career, I am interested in how education and the method of obtaining knowledge is changing. While my history of education is lacking, I do see some macro trends that may change things in education going forward. The predictions below are not too far-fetched, since I have read of cases of each of them already occurring. It is just a matter of which ones will catch on.

My predictions:

1. Online education is going to continue to become more integrated into traditional university education. Students will take a mixture of online classes and more traditional classroom classes. These online classes may not be offered by the university they are currently attending, but the credits will transfer.

2. Community colleges that mostly offer two-year degrees will partner with major universities to help cut the cost of education. Already, this is happening. Students may take classes at a community college for 2-3 years and transfer in to the four-year institution for the last 1-2 years of their degree. This is a win-win, since students get a degree for less money and universities typically receive the most committed students.

3. Apprenticeships will come back in fashion. These may be integrated into a degree, but I think that businesses will higher people with all levels of education and train them specifically for a career. This will curb some of the frustration of businesses that have difficulty finding the right kind of talent they want.

4. The average age of students will trend upward. This is partially due to the longer life-span and social acceptance of starting school later in life. As is already done in other countries, young adults in the US will choose to skip going straight to college. Instead, they will travel, work, volunteer or start their own companies before heading to get their education. This might be 1-2 years or longer. The life skills, experience and wisdom picked up along the way will become invaluable to them and their future employers. Lastly, this trend may lead to students being more engaged, because they know what they want and universities will not have as many dropouts and people switching majors.

5. Self-education will become more common. Anyone with an internet connection can take free classes from top schools, such as MIT or UCLA. Entrepreneurs can pick up a skill they are lacking on. Students can enhance the learning of a course they are struggling with or really enjoying. Also, businesses can use them to train their employees.

6. Most of these trends don't apply to the top rated schools, at least for now. If a school is ranked in the top 10-20 best universities (maybe top 50), they will still command a premium price and will have a long waiting list for people who would like to attend. However, as the trends above take hold, this may be difficult to hold onto.

 I believe that most of these trends will start at the universities and trickle down into primary education (K-12) later on.

Thursday, April 11, 2013

Pharmaceutical shortages

Today I have completed a paper about pharmaceutical shortages. My primary finding was that the bullwhip effect was starting at hospitals out of fear of a potential pharmaceutical shortage. This fear is leading hospitals to stockpile inventory, which makes the pharmaceutical even worse.

The bullwhip effect, for those that don't know, occurs when demand increases at one point in a supply chain and triggers ever increasing demand throughout the supply chain. For example, if we all go and buy milk before a storm, then our grocer will order more from their supplier of milk. This supplier will see an unusual spike in demand and will order even more from its supplier, thus amplifying the problem. This cycle continues through out the supply chain, until demand drops off suddenly, because everyone is over stocked. Once demand drops off, the entire cycle starts over again. This variance-of-demand cycle is not good for a firm's production schedule.

To prevent this from happening firm's within this supply chain should communicate and share more information. In addition, better lead times and forecasting can help. Also, government policy can play a role in allowing manufacturers to respond more rapidly to changing demand. Currently, government policy restricts pharmaceutical manufacturers from making more product than was originally forecasted. Therefore, if more is needed, a manufacturer must ask the Drug Enforcement Agency (DEA) if this is okay to do.

The best part about finishing this paper is how good it feels to have it done and out of the way. I wish I could bottle the feeling! Now...on to the next one.

Monday, March 11, 2013

A year has passed, but don't think the adventures stopped

The last post I made was over a year ago. Since that time, a number of changes have occurred.

Here is the short list:
  1. We had a son (he is now over 8 months old)
While that is not all that I have done over the past year, it certainly is the biggest and most awesome accomplishment. Also, it is a bunch of fun!

That's it for now...