Months into a crisis that highlighted flaws in the global supply chain, concerns around personal protective equipment still linger for healthcare providers. Thankfully, the pain today isn’t as acute.
Hospitals are in a much better position now than at the beginning of this year. They’ve sourced through new channels, begun stockpiling efforts and used newly approved sanitization methods to lengthen the life of existing gear.
But industry experts say the remedies are Band-Aids for a bigger problem, as flu season looms and COVID-19 hot spots re-emerge, posing broader questions about the fragility of the global healthcare supply chain.
Stockpiles abound with no coordinated strategy
The federal government’s emergency stockpiles maintained for times of crisis fell short when demand surged this spring, relegating hospitals to ramp up their own efforts.
Three-quarters of hospital staff responding to a recent survey from group purchasing organization Premier said accessing the Strategic National Stockpile through their state was complicated, confusing and overly bureaucratic.
Since then, hospitals have focused on building up their own PPE inventories, at the same time as government agencies replenish their reserves in preparation for the fall and winter.
The competing stockpiles are one of the Band-Aids for the current supply chain problems, Chaun Powell, group vice president for disaster response at Premier said.
“Frankly, those stockpiles place an additional burden on the supply chain in the near term, as it has taken products out of circulation to be used to deliver patient care to be put into stockpiles to prepare for the fall,” Powell said.
In Premier’s survey, respondents expressed concern that stockpiling efforts among hospitals and government agencies are lacking a coordinated strategy, and said there is currently no mechanism to transparently share inventory levels or create standards for how, when and why to access a stockpile.
At the same time, New York passed a law this year requiring hospitals maintain 90 days worth of PPE on hand. California passed a similar law requiring hospitals stock enough PPE to operate through 45 days at surge capacity levels. Those mandates are likely to increase supply shortages and drive up costs to hospitals, according to a paper from Premier.
Premier estimates a 90-day supply of PPE for a 350-bed hospital takes up around 5,700 square feet — roughly the size of 13 to 15 tractor trailers, and could cost up to $2 million.
Prior to the pandemic, hospitals often carried very low PPE inventory themselves, relying instead on distributors, Eugene Schneller, professor of supply chain management at Arizona State University’s W. P. Carey School of Business, said.
He thinks the mandates in New York and California will be burdensome for hospitals.
“I mean, I think it can be managed, but I don’t think it could be managed at the hospital level,” Schneller said. “You don’t want to buy it all at once, because then it expires all at once, so you want to be able to rotate those stocks.”
“It gets into the issue of you know, it is shifting, in a sense, the responsibility of the national stockpile to the individual hospital,” Schneller said.
How hospitals are handling it now
When demand for PPE skyrocketed earlier this year, health systems were forced to quickly adapt. Some had to find the space to put the supplies and the people to move it all.
Sacramento-based Sutter Health initially had an “urgent request process,” prompting units throughout the 24-hospital system to fill out a form saying they were on the verge of stocking out.
“We realized pretty quickly that was a very reactive process, right, and also a little bit expensive as you’re hiring couriers and FedEx to move stuff around the system,” Lee Ayers, senior director of supply chain operations and logistics for Sutter, said.
Once shortages started to ease, Sutter converted two of its already-existing warehouses into stockpiles for distribution across the system. Rather than wait for urgent requests to come through, it began pushing weekly quantities based on previous demand, Ayers said.
“I’ll be frank with you, we are concerned. We have concerns just in our manufacturers’ abilities to keep up with demand on a global basis. Because it’s a global issue. It’s not a regional issue, or even a U.S.-based issue.”
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John Wright
Vice president of supply chain and support services, Intermountain Healthcare
Some other regionally-based systems employed self-distribution models already, before the pandemic caused major disruptions, like Pennsylvania-based Geisinger Health.
The 13-hospital system invested in a central inventory and logistics warehouse close to its flagship hospital years ago, Kate Polczynski, VP for enterprise supply chain services at Geisinger, said.
“Unlike some of my colleagues whose first step was to go find space, we were very fortunate that we had a warehouse that we could utilize,” Polczynski said.
Utah-based Intermountain Health also employed a self-distribution model before the pandemic, distributing supplies across its 24 hospitals and other clinics from a centrally located warehouse.
After the worst this spring, PPE consumption has slowed significantly, John Wright, vice president of supply chain and support services for Intermountain, said. But demand is only increasing as systems and other players continue stocking up, rendering individual actions futile if extreme shortages return.
“I’ll be frank with you, we are concerned,” Wright said. “We have concerns just in our manufacturers’ abilities to keep up with demand on a global basis. Because it’s a global issue. It’s not a regional issue, or even a U.S.-based issue.”
Polczynski of Geisinger shared similar concerns.
“It’s not just the activity going on in my state, or my region, that’s going to influence my success in securing products,” Polczynski said. “Because what’s happening in Europe is also impacting my success here in Pennsylvania.”
Flu season looms
Despite those worries, some systems say they are doing all they can to prepare for the worst this winter and feel confident about their new strategies.
Many are employing artificial intelligence and other new technology, using data to track burn rates (how quickly facilities burn through supplies), and better manage resources going forward.
Ayers with Sutter said he monitors his systems’ data dashboard daily and pre-purchased “a lot of needles, a lot of syringes and alcohol pads, different things that we know we receive spikes in for flu season in particular.”
But flu season layered on top of the pandemic remains a big unknown.
Demand through the fall will significantly impact whether PPE shortages are over, Powell with Premier said.
“How much complexity of layering flu season on top of COVID is that going to bring to our testing capacity, and then with that, are we going to have ample supplies to protect our front-line caregivers, such that we won’t have to cancel elective procedures?” Powell said.