What type of policy approaches could be effective in addressing these product shortages?
Nancy Foster: There’s no single policy that will resolve this situation. It will take a series of steps. The first one is diversifying and expanding sources of critical supplies. Another is looking at how supplies are transported and having some redundancy, so that if a weather event takes out a vital highway or railway, or a labor strike takes out a major port, we have alternatives.
Margaret Steele: Our government is certainly supporting domestic manufacturing where it makes sense. But you can’t just move the manufacturing. You also have to move the raw materials, which isn’t easy. … To really support domestic manufacturing—because there’s an associated cost with it—it’ll have to put forward some financial support or improved reimbursement to purchase domestically manufactured items.
Do health systems have much leverage to help mitigate some of these problems?
Foster: Health systems do have leverage. Right now, we’re all very clear that the supply chain is too skinny, too lean. It’s too focused on just a couple of manufacturers, or just a couple of different areas of the world, for some of these vital goods. What are you willing to do as a consumer of these supplies in terms of diversifying your purchasing?
Steele: Yes they do. A lot of them are demanding transparency from their suppliers—and they should—because you can’t assess your risk with a supplier if you don’t know where they manufacture or where they source the raw materials for critical products. But up until this point, suppliers have held that information fairly close to the vest.
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What are some other supply chain or logistical issues on your radar that could impact the industry?
Foster: One concern is that as things continue, I expect the shortage of semiconductor chips will begin to hit the U.S. healthcare delivery system harder in the next several months. Right now, if you have sufficient IV pumps and equipment that already had semiconductor chips embedded, it may not have really hit you yet. As time goes on, I think we’re really going to feel the pinch.
Steele: They’re coming from every direction. If you think about transportation from overseas being such a challenge, we also have a looming strike that could affect major West Coast ports. And then just the global demand for oil and gas. Almost every med/surg item has some version of resin or plastic, and then there’s the packaging tied to that, so there’s a lot of concern about pricing.
