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Fixing the weak links in hospital supply chain

por Lauren Dubinsky, Senior Reporter | February 22, 2021
Business Affairs
From the January/February 2021 issue of HealthCare Business News magazine

During the initial COVID-19 surge last April, the personal protective equipment (PPE) shortage got so dire that some nurses in New York resorted to wearing garbage bags. Cases have currently skyrocketed to new heights, but protective gear seems to be more readily available now, which raises the questions: How did things get so bad and how did hospitals pull themselves out of the trenches?

It turns out that a multitude of factors contributed to the PPE shortage — one being the “just in time” approach to inventory. Hospital supply chain budgets have historically been under pressure to keep costs down and an effective way to accomplish that is reducing inventory on an as-needed basis.

“They were not stockpiling — they were basing their supply storage on historical patient volumes,” said Barry Dyer, senior vice president of consulting at TractManager. “Then when COVID-19 hit, obviously patient volumes dramatically increased in a very short period of time.”

Another major factor was that many manufacturers of PPE products have their production facilities in China. The Chinese government was focused on stockpiling their own supplies first and there were a number of export and import delays.

“It was hard for the distributors or group purchasing organizations (GPOs) to get their hands on those supplies,” said Dyer.

In fact, many healthcare organizations became frustrated with GPOs because they felt that being a member should have prevented them from experiencing a supply shortage, according to Dyer. A number of large health systems are actually leaving their GPOs now and bringing more of those supply chain operations back in-house.

Collaborating in-house and close to home
The sourcing team at Banner Health is made up of five nurses that search for products and collaborate with the clinical leaders to determine if the items are acceptable. To say that group was “busy” during the start of the pandemic would be a gross understatement.

“That is our long-standing process, but when [COVID-19] came about we needed to find alternatives quickly,” said Darcy Aafedt, supply chain information systems (IS) program director at Banner Health.

In order to make conversions to alternative products, it can take six to nine months while a product category is being considered. Since they didn’t have that kind of time, they came up with a new strategy.

The health system changed its protocols to hold daily group calls for brainstorming and identifying areas at risk of shortages. The team members homed in on the highest risk areas to research substitutes and reconvene. What they found, according to Aafedt, was that moving quickly made all the difference.

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