The Failure of Our Healthcare Supply Chain

Our entire healthcare system and thus all of our own health and well-being depends on the oft-overlooked supply chain that feeds our healthcare providers. Healthcare supply chain management is the field that deals with the regulation of the flow of medical goods and services from manufacturer to patient. In the healthcare realm, managing a supply chain tends to be a very complex and fragmented process involving various different healthcare departments and suppliers all vying for the best possible deal. Yet, a dependable and reliable supply chain is of utmost importance because people’s lives are on the line. In the healthcare industry, timing is everything and lack of supplies or poor timing of their arrival can cause many preventable deaths [1].


Recently, with the COVID-19 pandemic, we saw a major breakdown in the U.S. healthcare supply chain. Severe shortages of essential frontline medical devices and personal protective equipment (PPE) brought fundamental concerns regarding the sustainability of the healthcare supply chain to the forefront of public health discussions. Early in the pandemic, Asian factories shut down, halting exports of medical supplies to the US [2]. Government stockpiles were already depleted from the 2009 H1N1 flu outbreak a decade earlier and with no way to rapidly restock, shortages of necessary equipment resulted [3]. The federal government advised people not to wear masks to save the supply for healthcare workers. Subsequently, counterfeits and low-quality masks and other equipment flooded the market [4]. Testing fell behind early and took very long to recover, especially once cheap, disposable swabs, made mostly in Italy, became rarer and harder to obtain [2]. As the fragile links between the manufacturers overseas and our frontline healthcare workers collapsed, our system began to unravel and needless COVID-related deaths resulted. Resultantly, shortages in masks, gloves, gowns, shields, testing kits and other medical supplies cost countless lives that could have been saved with careful planning and better logistics.


Not only were stockpiles not kept fully stocked and available sources of supplies dwindling rapidly, but also there was no real contingency plan or organized response throughout our healthcare system. State and federal government contracts outbid each other for various supplies and many states turned to questionable supply providers, often not receiving supplies even after paying a great deal for them. It is easy to say that having a contingency plan is the solution, but streamlining the response to health crises such as a pandemic on a national level would have gone a long way in improving the U.S.’ COVID response.


There have been a wide variety of strategies proposed to improve the U.S. healthcare supply chain; one of which is to promote U.S. markets by amending policies to help local manufacturers. This would lessen the reliance on imports from other countries and ensure more readily available supplies. In 2020, almost all medical protection supplies in the U.S. were made in other countries, and when global supply chains fractured, U.S. manufacturers were left to try to fill the gaping supply holes and switch from manufacturing other products to medically relevant ones. The Trump administration invoked the Defense Production Act (DPA) to compel some companies, such as 3M, General Motors, and General Electric, to refit their factories and start making supplies in the fight against COVID [5].


In a similar vein, another way to incentivize the production of more PPE is through expanding the Buy America rules. This would look past what is needed solely for infrastructure and national defense and allow for purchases to be made for departments such as the Department of Health and Human Services. In response to the poor coordination in the COVID response efforts and this lack of domestic production of PPE and other necessary supplies, President Biden passed two executive orders in his first week in office. These systematized the federal government’s management and coordination of the COVID recovery efforts, including through re-evaluating the Strategic National Stockpile and establishing a better framework for the use of the DPA [6]. Both of these orders have allowed Pfizer and Moderna to have better access to raw materials, allowing vaccine production and distribution to surpass expectations [6]. Importantly, these executive orders set a better framework to handle future health challenges that may emerge.


Some success in improving the healthcare supply chain has also been found through cost transparency and increased access to data for all supply chain participants. This would allow healthcare organizations to track and manage inventory more efficiently and allow for more informed purchasing contracts to be negotiated. This results in improved decision-making and significant cost savings throughout the healthcare sphere [7].


Another strategy for improving the healthcare supply chain would be to increase cooperation among hospital departments and hospitals within linked systems. Getting these entities on the same page would allow for a reduction in costs and boost the performance of the system as a whole. Physicians and clinical staff and the healthcare providers directly using the supplies should be involved in decision making and supply chain solutions they know they can stick to. This would involve larger cooperation among clinicians and various hospital administration branches [7].


In the near future, we are likely to see many more major health crises and pandemics as zoonotic transmission increases and globalization surges. We need to improve our healthcare supply chain before the next crisis catches us off guard once again and we lose numerous lives because of it.


References:

1. LaPointe, Jacqueline. (2016). Exploring the Role of Supply Chain Management in Healthcare. Recycle Intelligence.

2. Modern Healthcare. (2020). US medical supply chains failed, and COVID deaths followed. Modern Healthcare.

3. Brown, Matthew. (2020). Fact Check: Did the Obama administration deplete the federal stockpile of N95 masks?. USA Today.

4. Mendoza, Martha. (2020). US Medical Supply Chains Failed, and COVID Deaths Followed. PBS.

5. Dzhanova, Yelena. (2020). Trump compelled these companies to make critical supplies, but most of them were already doing it. CNBC.

6. McMullan, Matthew. (2020). The Great American PPE Shortage of 2020. Alliance for American Manufacturing.

7. Struebing, Melissa. Why Is Supply Chain Management (SCM) Important To Healthcare Organizations?. Redbird Logistics Services.

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