Editor’s note: A recent article in ASCM’s Transportation Journal explores how disclosing supply chain information affects patients. "Shaping Patient Perceptions with Health Care Supply Chain Transparency" by Duan et al. highlights the importance of giving thoughtful consideration to exactly what information is disclosed. The following summary of the original research offers some interesting considerations — no matter what industry your supply chain supports.

Patient satisfaction plays a pivotal role in the health care sector. High satisfaction directly correlates with quality of care, improved financial performance, and higher patient loyalty. It also affects vital metrics such as return on inventory, cycle time and lead time variability. Specifically, aspects including medication sourcing can influence patient perceptions due to potential differences in inventory turnover and lead time fluctuations. Additionally, the efficacy of service operations conducted by health care professionals, such as follow-up timings post-appointment, can significantly influence demand variability for medical supplies and medications.

A key factor influencing patient satisfaction is supply chain transparency — meaning, a company disclosing information to the public about upstream operations of the products it sells. In the health care context, this translates to hospitals, clinics, private practices, long-term care facilities and other medical service providers sharing similar information with patients. Following are some interesting considerations from the research:

• Impact of disclosure: Does simply disclosing supply chain information enhance patient perceptions of physicians and health care providers?
• Content and psychological distance: How does the nature of the disclosed information (for instance, sourcing location) and perceived psychological distance (closeness/remoteness) influence patient perceptions?
• Service recovery actions: Can health care professionals use service recovery actions (such as more frequent follow-ups) to mitigate potential negative effects arising from disclosures, particularly those related to distant manufacturing locations?

Through two vignette-based experiments, this study offers valuable insights into maximizing the benefits of transparency by strategically selecting content and adapting service operations.

Transparency tightrope

The initial inquiry revolves around whether simply disclosing health care supply chain information automatically enhances patient perceptions. This act represents the first step toward transparency. Study findings challenge the assumption of a straightforward positive effect. Instead, the content of the disclosure proves to be more pivotal. Disclosing distant sourcing locations, for instance, can have unintended consequences.

This research introduces the concept of psychological distance to explain how patients perceive supply chain information. People tend to see objects or events as closer or farther away from themselves, both in space and time, than they actually are. This perception of distance influences judgments, decisions and behaviors. Generally, increased psychological distance reduces trust. As the perceived distance grows, people tend to engage in more abstract thinking, feel more uncertain and become less likely to engage with the object.

Evidence from marketing demonstrates that retailers can influence consumers' perceived temporal and spatial distances by varying information cues, ultimately affecting purchasing decisions. Likewise, in health care, ensuring a relatively short psychological distance for patients is crucial, given its strong correlation with trust and security.

Health care supply chains are complex networks involving participants from various locations. Given the prevalent practice of offshoring, perceived spatial distance becomes a relevant factor. This research proposes that the spatial distance of the health care supply chain is negatively associated with patients' perceived psychological distance and, consequently, their perceptions.

Temporal and spatial distance

Building upon the concept of spatial distance, this research introduces the concept of temporal distance. Temporal distance refers to the perceived time difference between an individual and an event. In the health care context, this could be the period between a doctor's appointment and a follow-up consultation. Like spatial distance, increased temporal distance can negatively affect trust and satisfaction.

To investigate further, study participants were presented with a scenario in which they were experiencing a health issue and visiting a physician. The scenario depicted a thorough examination and a well-defined follow-up plan by the physician. Following this context, participants were randomly assigned to one of four scenarios manipulating both spatial and temporal distances. The spatial distance manipulation involved disclosing the medication being manufactured in either Mexico (closer) or India (farther). The temporal distance manipulation involved informing participants that the physician follow-up regarding their health and medication effectiveness would occur in either one week (near future) or three months (distant future).

The results supported the hypotheses: Disclosing a distant SC location negatively affected patient perceptions of both the medical supplier and the physician compared to a closer one. Additionally, the longer temporal distances diminished patient satisfaction with the physician, but not their perception of the medical supplier.

A crucial finding involved the interaction effect between spatial and temporal distances. The results showed that the physician's follow-up timing had a more significant impact on patient satisfaction when the medication originated from a distant location. In this scenario, a delayed follow-up significantly decreased patient satisfaction compared to a timely one. Conversely, when the medication originated from a closer location, follow-up timing had a less pronounced effect.

Key takeaway

The research highlights the importance of considering the content of supply chain information disclosed to not only patients, but also other stakeholders. Simply sharing information doesn't necessarily improve a person’s overall impressions, and transparency can be a double-edged sword. By strategically selecting what information to share and potentially implementing service recovery actions, supply chain professionals can leverage transparency to enhance satisfaction and improve overall outcomes.

Learn more about the Transportation Journal and the authors of the original research: Yanji Duan, Coggin College of Business, University of North Florida; Jing Xu, Brooks College of Health, University of North Florida; Lian An, Coggin College of Business, University of North Florida.