This is a contributed op-ed written by Jody Hatcher, the former president of supply chain services for Vizient and a 14-year board member of the Healthcare Industry Supply Chain Association. Today he is a board member at PartsSource. Opinions are the author's own.
The COVID-19 crisis has brought the heroics of our healthcare providers into sharp relief. It has also laid bare the many weaknesses of our healthcare system that made their heroism necessary in the first place.
Perhaps none of these faults is as glaring as the failure of the supply chain to deliver adequate supplies to ensure the health and safety of providers and patients. The industry-wide shortage of personal protective equipment (PPE) has forced many providers to choose between caring for patients and their own safety.
But cracks in the supply chain run far deeper than PPE. Shortages and weeks-long delays in delivery of items ranging from patient monitoring systems to thermometers continue to plague the system today.
Fixing the flaws that led to this historic failure won’t be easy. But no matter how difficult, now is the right time to ask whether the current system can be made more resilient, or if more drastic action is needed. This much is certain: If we don’t fix the problem before the expected second surge in COVID-19 cases strikes, the result will be a far worse crisis.
The root of the problem, I believe, is a lack of government coordination. As hospitals have run short of PPE, tests, ventilators and drugs, they have largely had to source replacements on their own. The resulting free-for-all has prompted stockpiling that worsens the problem, and uneven distribution based on economics rather than need.
Meanwhile, the federal government has been competing with providers and states for supplies, without matching the limited supply with the anticipated demand.
The bottom line is that we have no truly national coordination effort that connects across all stakeholders — hospitals, suppliers, distributors, online marketplaces, group purchasing organizations, states and federal agencies. Instead, the supply chain consists of private-sector suppliers and distributors who compete for the business of specific providers in various geographical regions.
Is the current system adequate to serve the public good? Not so far. In response to the pandemic, a coalition of private and public organizations formed a national ventilator sharing program. But it did so in the absence of government action, which is not a sustainable model for a future epidemic.
A more realistic and effective solution might be the appointment of a national healthcare supply chain "czar" to enforce cooperation among all parties.
Yet that seems unlikely. However, given the President’s preference for private sector solutions, the government could hire a subcontractor to fulfill the role.
A precedent for that approach can be found in the private-subcontractor operated Medicare 340B outpatient drug program. There are many capable private parties that could step in and play a similar role for the pandemic.
For now, however, without a government quarterback that coordinates between the public and private players, we somehow need to move as an industry to nurture a far more actively managed supply chain, and quickly.
What would that look like? For starters:
Visibility into channels with open communications between suppliers, distributors and customers so hospitals can order product understanding how much is available, preventing under-ordering and hoarding.
Better inventory visibility by hospitals along with more accurate demand forecasts, faster order placement, and greater collaboration with their suppliers and distributors.
Broader use of analytics supported by real-time data to forecast supply bottlenecks and proactively prevent shortages of supplies, equipment and personnel.
Online communities enabling hospital clinical engineering teams to share insights and best practices with their peers in other hospitals.
Thanks to the advent of online marketplaces, these capabilities exist today but only in patches. Their adoption across the industry would solve many of the problems revealed by the pandemic. Nothing would move the industry faster toward that goal than a private-sector coordinator appointed and authorized by the federal government to coordinate among all supply chain stakeholders.
Without that, I fear we will have to hope that the best practices and capabilities now available to some hospitals will somehow become broadly available to many more in a matter of months.
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