Integrating Emerging Electronic Commerce Technology into the Healthcare Value Chain
Lisa J. Carnahan, NIST/Information Technology Laboratory
Rick Korchak, NIST/Manufacturing Extension Partnership
Ram Sriram, NIST/Manufacturing Engineering Laboratory
{lisa.carnahan, rkorchak, sriram}@nist.gov
Motivation
An industry value chain is a string of companies working together to satisfy market demands. It is widely recognized that collaboration among trading partners in a value chain to improve quality, increase speed to market, and decrease costs is crucial to survival in the global marketplace. Significant improvements in value chain performance may be possible by using EC technologies, particularly web-based technologies. For the healthcare industry, this could be the set of companies involved from manufacturing and packaging pharmaceuticals, to delivery, to the retail pharmacy. MEP studies have shown that deploying an EC strategy in a value chain can improve competitiveness, which results in cost savings for each participant. This is achieved by eliminating inefficiencies in the information value stream. Achieving this success requires prevalent, cost-effective, and efficient use of applications, communications, and tools necessary to communicate and share product data and business information in the value chain. While large organizations with significant capital for EC investment were early adopters of EC strategies, small and medium-sized enterprises (SMEs) and other organizations most often are not. Indicative of today’s situation is the manufacturing industry where SMEs make up over 98 percent of all manufacturers in the U.S., and only 36 percent of these smaller firms use Internet technologies for collaborating with suppliers online. [1], [2] These organizations are essentially out of the value chain as it exists today and are missing their opportunities for market-share growth.
To rectify this situation, industry must develop and implement new technologies appropriate to their sector, while ensuring that their efforts are compatible with and can be integrated into emerging EC technologies such as XML technologies, electronic business XML (ebXML), Universal Business Language (UBL), Web Service technologies, and the emerging data sharing and brokering protocols. These EC technologies offer industry-neutral solutions that provide an infrastructure for the value chain. Without this integration, pervasive, cost-effective tools will not be available to all participants in the value chain. The integration of the vertical-market definitions of business processes and data models with EC tools will provide true open and accessible EC solutions for a given industry.
Many areas of the healthcare industry could be on the cusp of this integration. Various consortia that support the healthcare industry sector are focusing their supply chain definition and technology efforts toward an EC strategy. These can be categorized into four major areas: (1) the pharmaceutical supply chain, (2) the biomedical device supply chain, (3) patient record processing from healthcare provider to insurance provider, and (4) clinical trial data capture and processing. There are multiple efforts ongoing in each category, but many are in the early stages of development, and participants have not yet focused on applying the emerging EC technologies.
Project Objective
This project seeks to integrate emerging EC technologies into appropriate parts of the healthcare value chain. The objective is to build a software prototype and to demonstrate the integration. The goal is to enable the integration of these technologies not only within a single healthcare value chain, but also across value chains. Successful integration means that pervasive EC tools, based on EC technologies, will be available to support the healthcare value chain. Moreover, the capital investment required to participate in this EC-enabled value chain will be small, requiring little more than access to the Internet and a browser. Thus, the technology (e.g., software systems, tools, computers) is non-intrusive, and the barrier for entry to companies without an information technology infrastructure is lowered. By taking advantage of the economies of scale presented by the Internet and EC technologies, the full spectrum of companies contributing to the healthcare value chain, including SMEs, are able to interact, conduct business, and improve the quality and lower the cost of healthcare products and services.
References
[1] Korchak, Rick (NIST) and Rick Rodman (KPMG Consulting, LLC), eBusiness Adoption Among U.S. Small Manufacturers and the Role of Manufacturing Extension, Economic Development Review.
[2] “Highlights of Findings: NAM/Ernst & Young 2001 E-Commerce Trends Index”, The Manufacturing Institute and Ernst & Young, November 2001, pg. 2.
Updated November 2002
Comments to lisa.carnahan@nist.gov