What is it about?
Medical Supply Resource Organizations (MSROs) receive donated medical supplies that otherwise would be discarded and distribute them to developing nations. Delivering the right product to the right recipient in this context is challenging because the exact recipient needs are usually unknown to the MSRO. Using a game theoretic model we analyze the effectiveness of an industry best practice, namely a recipient-driven resource allocation model, which grants recipients access to an inventory database and lets recipients pick products to fill their own containers. We find that the recipient-driven model may induce competition among recipients and lead to welfare loss through rushed container shipments. We further identify operational mechanisms that can increase the benefit recipients obtain from shipments including: (i) selecting appropriate container size while restricting inventory visibility, (ii) eliminating recipient competition, and (iii) switching to a provider-driven allocation model.
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Why is it important?
The healthcare system in the US disposes of 5.9 million tons of reusable medical supplies annually; this waste is associated with a large environmental burden as well as monetary cost. Excess medical supplies in the US can be salvaged and distributed for use in underserved healthcare facilities in developing nations. However, evidence shows that much of what is donated is inappropriate and cannot be used by the recipients. Based on field data from an award-winning MSRO, Medshare, we show the importance of selecting the right supply chain and information sharing model in increasing the value of shipments to recipients, ensuring that the donated medical supplies are utilized instead of becoming medical waste, and thus a financial and environmental burden in the recipient countries.
Perspectives
It was a privilege to work with Medshare executives and managers who are doing terrific work in a challenging environment, and to learn about the opportunities and operational issues in medical surplus recovery first hand. We appreciated their openness and engagement throughout. It was particularly motivating to work on this project because of its social and humanitarian dimension.
Dr L. Beril Toktay
Scheller College of Business, Georgia Institute of Technology
It has been a great pleasure working on this project. What MedShare is doing is very meaningful work, and I am glad to have the opportunity to learn and contribute. I also hope that our findings could be insightful for other medical surplus recovery organizations for improving their operations and better serving people in need.
Can Zhang
Georgia Institute of Technology
Medshare has been a great partner for research throughout this process. It has also been very instructional for us, helping us realize once more the strategic importance of an operations perspective, be it in a traditional business or a humanitarian aid context. We sincerely hope that this type of work will help Medshare and other non-profits in the long run.
Dr Atalay Atasu
Georgia Institute of Technology
Read the Original
This page is a summary of: Effective Medical Surplus Recovery, Production and Operations Management, October 2016, Wiley,
DOI: 10.1111/poms.12641.
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Resources
Nonprofits repurpose excess medical supplies and equipment as hospitals nationwide toss them out
Explains the causes behind the large volume of excess medical waste discarded each year by the healthcare system and describes the approach hospitals are taking to reduce the waste generated as a means of reducing healthcare costs. Furthermore, the article describes non-profits approach to salvaged the discarded medical waste and redistributing it for use in developing nations.
Scratching the Surface: Healthy Surplus Equipment Donations
Discusses how the majority of donated excess medical supplies becomes medical waste in the recipient countries due to the fact that the majority of donations are inappropriate. Provides examples of different approaches non-profit organizations are taking to ensure that the full value of donated medical supplies can be realized in the recipient country.
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