As the millennium approaches, the most dangerous bug, as far as many hospitals are concerned, may lurk in the hearts of humans, not computers or the software that runs them.
Fear is growing that supplies of key medical products could falter because of pre-emptive hoarding by nervous materials managers even if all the computers properly process hospitals' orders and shipments with suppliers.
"Jan. 1 will be a speed bump, as far as I'm concerned," says Michael Bohon, director of materials management at TMC HealthCare, Tucson, Ariz. "The big issue will be third- and fourth-quarter stockpiling."
Hoarding of supplies by even a modest number of survivalist-minded materials managers worried about the prospect of something going wrong at the stroke of midnight on Dec. 31 could stretch the chain of healthcare supplies beyond the breaking point.
Bohon, and many managers like him, have no intention of bearing the expense or storage headaches of building up extra inventory. But unless everyone plays along, the rational managers worry that they could be left in the lurch late this year, unable to get vital drugs and devices because their pack-rat brethren may have salted away all the available stock.
Unfortunately, manufacturers can't just flip the switch to pump out extra goods to add slack to the system.
"There isn't a month's (extra) capacity for high-moving items," explains Jim Grigg, senior vice president at Owens & Minor, a Richmond, Va.-based distributor of medical and surgical supplies. And the most critical products, Grigg says, are the ones for which there is the least potential for additional manufacturing.
Many materials managers say their fears are growing because manufacturers and distributors aren't forthcoming enough with guarantees that all will be well come 2000.
"We, the providers, are looking for the assurance from distributors and manufacturers that our historical product usage will be available," says Phil Mears, vice president of supply chain at Catholic Health Initiatives in Denver.
Suppliers say they are stepping up their efforts to show their customers that there's nothing to worry about.
"We believe that we will be Y2K-compliant," says Ron Labrum, corporate vice president in charge of distribution at Allegiance, a division of Cardinal Health, Dublin, Ohio. "We're spending a lot of time on education. Enhancing education so people can make informed decisions is probably the best line we can take. Our position is that this is not a time for customers to have a huge response in stockpiling."
Grigg says he understands providers' concerns but that some want guarantees so ironclad that his companies' insurers simply won't allow them.
Time is running out, though, for suppliers and hospital buyers to work things out.
"My sense is that the anxiety and fear is growing," says Jamie Kowalski, president of Kowalski-Dickow Associates, a materials management consulting firm in Milwaukee. But Kowalski is quick to add that much of the fear is probably unfounded.
Hospitals' backward ways in inventory management may actually help insulate them from risk.
Most hospitals, Kowalski says, have significant amounts of hidden inventory stashed in drawers, cabinets and closets.
After adding in the stock that's in transit or sitting in the warehouses of manufacturers and distributors, the total supply available for most items approaches 80 to 100 days' worth of use, according to some industry estimates.
Recently, several intermediaries between hospitals and suppliers have stepped into the hoarding breach.
In the past month, Novation, the Irving, Texas-based purchasing group for VHA and University HealthSystem Consortium, and the Health Industry Distributors Association have convened separate meetings of supply buyers, sellers and middlemen to calm fears and seek measures to prevent a materials meltdown.
"We're trying to drive responsible behavior in the supply chain and to get people to think things through," says Larry Dooley, vice president of distribution services at Novation. "If everyone acts responsibly, we'll get through this event with minor, minor, minor issues."
Some suppliers aren't leaving stockpiling to chance.
Owens & Minor is already making plans to restrict increases in credit terms and automatically reject customer orders that stray more than a few days over customers' historical ordering patterns. To further discourage furtive hoarders, Owens & Minor will hike restocking fees to around 25% for merchandise returned during the first quarter of next year.
"Everyone is so concerned about what everyone else is going to do," Grigg says. "We're trying to take that factor out."
For its part, Allegiance will flag any customer orders that rise significantly above ordinary use and then meet with the customer to discuss the issue, Labrum says.
In the meantime, hospital executives need to work locally to keep Y2K doom from becoming a self-fulfilling prophecy.
For instance, TMC's Bohon says materials managers from Tucson-area hospitals have already met and agreed not to stockpile.
They're now updating an existing loan-borrow agreement, drafted to deal with natural emergencies, that would pave the way for sharing of supplies if things get rough.
"We will cooperate and help each other out," Bohon says. "The more people know, the less they'll panic."