Technological Innovations for Last-Mile Delivery in Health Care

Hummy Song, Operations, Information, and Decisions, The Wharton School, and Claudio Lucarelli, Healthcare Management, The Wharton School

Abstract: We propose to study the impact of technological innovations in last-mile delivery on health care access, cost, and quality. To this end, we will examine the introduction of drones to deliver blood and other medical supplies to isolated areas in Rwanda. By partnering with the first company to develop such a technology that is specific to the delivery of health care products, we have the unique opportunity to examine and inform how the evolution of such technologies will affect important outcomes. Specifically, we will (1) assess the impact of delivery drones on operational outcomes, (2) evaluate the operational tradeoffs between investing in more expensive technologies to pool inventory across a greater geographical area versus using less expensive technologies to pool inventory across a smaller geographical area, and (3) examine the optimal replacement rate of delivery drones. We will collect operational flight data from the delivery drones in addition to health facility data and inventory data from the Rwandan health facilities. Through this work, we explore an important aspect of innovation in business models and service delivery, examine strategies for innovating, and assess ways to capture economic value from innovation investments.