Providers and suppliers plan to overcome healthcare supply chain obstacles created by COVID-19 by prioritizing US-made goods, gathering more inventory and demand planning data, and relying less on IT.
Providers and suppliers are looking to preserve the healthcare supply chain after the COVID-19 pandemic by prioritizing the purchase of products made in the US and other strategies, a recent survey showed.*
Acquired by RevCycleIntelligence via email, the survey of executives from over 200 provider and supplier organizations found that healthcare stakeholders are making healthcare supply chain resiliency and optimal demand forecasting top priorities to overcome the wide range of challenges presented by COVID-19. Chief among those challenges was the inability to source personal protection equipment (PPE).
These insights are based on responses from executives at more than 200 provider and supplier organizations as part of an online survey conducted during a June 12th Association for Healthcare Resource & Materials Management (AHRMM) webinar, “Re-engineering the Healthcare Supply Chain.” The panel discussion, moderated by Karen Conway, vice president of healthcare value at GHX, explored the need for more transparency across the healthcare supply chain, as well as closer coordination between supply chain and clinical teams.*
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Hospitals across the country have reported heavier than normal use of PPE during the pandemic, which has created a severe shortage of the supplies and put providers and patients at risk of contracting the novel coronavirus, according to HHS’ Office of Inspector General.
Other providers have also faced – and continue to face – limited access to PPE. A recent Premier Inc. survey found that senior living facilities, physician and medical offices, pharmacies, surgical centers, and other alternate care sites have reported a more than 50 percent increase in PPE needs since the COVID-19 outbreak. At the same time, securing the needed supplies has been a challenge, with 83 percent of providers from the alternative care sites saying that their PPE needs are not being met by traditional medical-surgical distributors.
Limited access to PPE has prompted hospitals and other providers to purchase supplies from online retailers and other non-traditional supply chain stakeholders to fill the gap.
But even when providers have been able to acquire PPE, they have encountered other healthcare supply chain challenges created by the pandemic, GHX reported. Other major challenges cited by providers and suppliers included bidding wars and price gouging (15 percent), finding and vetting non-traditional suppliers (14 percent), and securing quality or authentic products (12 percent).
To prevent future outbreaks of COVID-19 or other public health crises from creating these healthcare supply chain issues in the future, providers and suppliers are interested in acquiring more US-made products.
Approximately 59 percent of respondents to the GHX survey said more prioritization of products produced in the US would help to alleviate PPE shortages, bidding wars, and other healthcare supply chain challenges in the future.
Over half (57 percent) of respondents also said more inventory and demand planning data sharing among providers and suppliers would preserve the healthcare supply chain in the future. Another 52 percent reported less reliance on IT and more safety stock.
Other areas of focus for a more nimble and resilient healthcare supply chain in the future included more investment in inventory visibility across individual health systems (49 percent), closer coordination between clinical and supply chain teams (41 percent), and more investment in demand planning and sensing (31 percent).
Domestic PPE production has become a top priority across the healthcare industry in the wake of the pandemic.
About 80 percent of PPE products come from China and Southeast Asia, according to Premier Inc. To reduce reliance on Asia for the supplies, the company and 15 leading healthcare systems, including Advocate Aurora Health, Banner Health, and Commonspirit Health, recently acquired a minority stake in the largest domestic manufacturer of face masks.
Under the agreement, Premier members committed to purchasing a portion of all face masks they use annually from Prestige Ameritech for up to six years.
“With past outbreaks such as SARS, H1N1 and Ebola, the nation talked about domestic manufacturing and expanding supply sources as the keys to preventing shortages, only to return to the same overleveraged overseas markets once the crisis was over,” Michael J. Alkire, Premier president, said in a press release. “This move is the latest step in our long-term commitment to changing the way we source critical products so that we never again experience shortages as a result of overreliance. Our economic prosperity can no longer be tied to things we buy – it must also come from things we make.”
Healthcare supply chain management will also need to evolve to include more accurate demand forecasting, according to GHX CEO Bruce Johnson.
“Accurate forecasting is critical if we are to run responsive supply chains, better adapt to supply shifts, and secure what we need to manage a potential second wave and to ramp up elective procedures while also supporting the needs of patients receiving care at home,” Johnson said in the most recent episode of the COVID-19 CEO Insights Series.
Some providers have already started improving demand forecasting by building in-house solutions or partnering with other healthcare stakeholders, Johnson stated. However, this area still needs more attention for the healthcare supply chain to overcome another wave of COVID-19, a hurricane, or other public health crises.
Additionally, interoperable enterprise resource planning (ERP) systems that enable providers and suppliers to connect to a national database and communicate with standardized data elements can help the healthcare supply chain become more responsive, which is key during a public health crisis, Johnson concluded.
Source: Revcycle Intelligence