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Health Care savings pioneer wins major award

June 10, 2010

Decades before health care reform became a household phrase, Professor Eugene Schneller was pioneering fields that would play a key role in reducing the costs of health care. Schneller, who teaches at the W. P. Carey School of Business at Arizona State University, just received a major prize for leadership in education. Since his career started in the 1970s, he has helped to improve quality and access to care, and he recently helped bring the concept of health care supply chain management – choosing the most cost-effective products – to the forefront.

“When you used to go see the doctor, you would depend on one person behind the desk, the physician, to make decisions on your care based on clinical knowledge,” Schneller said. “Now, you have to consider different machines, technology, medical devices and other options when making choices about your care. Health care supply chain management helps bring the best products to the site of your care and helps providers make good selections about what to offer you at a cost-effective price.”

Schneller also is co-director of the Health Sector Supply Chain Research Consortium, an innovative membership group of health care organizations researching how to improve the performance of hospitals and streamline health care costs. The group includes distributors, health information technology companies, group purchasing organizations and others involved throughout the health care industry, working to solve problems for the common good.

Among the research funded by the group are projects focusing on how to save money on hip and knee replacement surgeries, and how to structure incentives for doctors and hospitals to focus on efficiency. For the future, work will focus on standardizing ways to bar-code medical products so they can be easily traced in the event of a recall and helping find out how to eliminate the disparities in prices charged for specific medical treatments in the United States. Many other countries have greater transparency to ensure more similar costs for similar procedures.

Schneller said supply chain management techniques have made various other industries, such as information technology and retail, profitable and efficient. He says the same principles will work to save money in the health care arena.

“Less than half of hospital transactions are totally paperless, as opposed to 100 percent of what a store like Walmart does,” Schneller said. “We need to improve on that, so that we can better track patients, care and medical devices.”

He added: “The recession is a supply chain manager’s best friend because people really look at how to cut costs. We need to look at payment for the whole patient admission and understand how to work better with suppliers to manage the supply chain strategically to affect the bottom line. For example, we need to analyze whether people are utilizing the materials they should. Are you giving a 90-year-old woman the type of hip replacement that’s appropriate for a highly active young person?”

This month, Schneller received the Gary L. Filerman Prize for Educational Leadership, awarded to one person per year by the Association of University Programs in Health Administration (AUPHA), a nonprofit organization. The prize recognizes those who have made outstanding contributions to the field of health administration education, exhibited leadership in the field, and enriched their institutions and students through their work.

“I’ve been affiliated with health care management education since 1979, when I founded a program at Union College in New York,” Schneller said. “This prize makes you reflect back on how health management has changed over the years and how I’ve been able to contribute. Health management education combines important concepts from public health, social sciences and business. Since I’ve taught in medical schools, schools of public health, liberal arts departments and schools of business, it’s great to see how nicely different disciplines have come together to train people to lead organizations and make a difference to patients.”

Schneller has been involved in the accreditation process of about 20 schools over the years, pointing out ways they can improve. He has a Ph.D. from New York University and an honorary physician assistant degree from Duke University. He has won numerous teaching awards and serves on the editorial review boards of the Journal of Supply Chain Management, Healthcare Briefings and Electronic Highway. He was named a “Healthcare Thought Leader” by Future Healthcare, and he spent time in the former Soviet Union, helping to modernize the health care system in the 1980s.

“I’ve watched supply chain management go from a basement-level job at hospitals to a vice president position in progressive hospital systems across the United States; this reflects people realizing how much of a difference could be made,” Schneller said. “To be singled out in this field is very moving.”

One of Schneller’s colleagues, W. P. Carey School of Business Assistant Professor Jonathan Ketcham, was also honored by AUPHA this month. He received the John D. Thompson Prize for Young Investigators for his impressive research in the health care management sector.