The COVID-19 crisis has brought into sharp relief the heroics of our healthcare providers. It has also laid bare the many weaknesses of our healthcare supply chain that made their heroism necessary in the first place.
None of these faults is as glaring as the breakdown of the supply chain to deliver adequate supplies to ensure the health and safety of providers and patients. The industrywide shortage of personal protective equipment 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.
The root of the problem is a lack of industrywide coordination. Many hospitals have largely had to source supplies on their own. The free-for-all 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.
The solution? The federal government should hire a subcontractor to act as a supply chain czar with authority to coordinate across all stakeholders—hospitals, suppliers, distributors, online marketplaces, GPOs, states and federal agencies. Precedent is found in the Medicare 340B disproportionate-share outpatient drug program, operated by a private subcontractor.
If that degree of oversight is unlikely from the Trump administration, then the industry should unite on its own to quickly nurture a more actively managed supply chain that provides: open communications between suppliers, distributors, GPOs and customers to prevent under-ordering and hoarding; visibility into hospital inventory, with more accurate demand forecasts, faster order placement, and greater collaboration with suppliers and distributors; analytics supported by real-time data to forecast supply bottlenecks; and online communities enabling clinical engineering teams to share insights and best practices.
These capabilities exist today only in patches. Nothing would move the industry faster toward their widespread adoption than a private-sector coordinator authorized by the federal government to orchestrate among all supply chain stakeholders.
Former president of supply chain services at Vizient and a 14-year board member of the Healthcare Supply Chain Association