As the industry recovers and looks ahead into 2021 and beyond, we owe it to our customers, the public and ourselves to step back and re-evaluate how the entire industry – from health care systems to distributors to manufacturers – manages the health care supply chain.
While COVID-19 exposed a number of flaws, it also brought out the best in many of us. At Prodigo, we saw a number of larger health care systems reach out to help smaller systems by identifying alternative suppliers who could provide equipment and even obtain critical supplies.
This spirit of transparency and information sharing horizontally across industry peers and vertically from source to the point of care can go a long way toward helping this industry improve supply chain visibility and, ultimately, improve the overall quality of health care.
Over the past year, many health care systems have become much better at managing clinical supplies and sourcing networks, but many others still have a long way to go.
Ultimately, we need to be able to put better, and more accurate information at the fingertips of the requestors that are ordering medical supplies and provide them with the confidence that what they order is available and can be delivered on a timely basis.
Here is what we need to do to get there:
Prioritize local sourcing: The chronic PPE shortages in 2020 exposed flaws in a global supply chain long-driven by low pricing as a priority. The pricing advantage that China and other nations have for these items is vast, but the consequences of putting price ahead of the delivery of health care is starker now than ever. Our industry, and our federal government, must re-evaluate sourcing strategies and discuss public policy initiatives that would support the development of local sourcing in the United States for medical supplies that are critical for the delivery of health care.
Identify critical supplies: During the pandemic, it was readily apparent which supplies were critical – and which were in short supply. Even a layperson could tell the importance of personal protective equipment such as N-95 masks, isolation gowns, ventilators, and face shields. But what else? What other supplies are essential to the provision of quality health care, both during and outside of a pandemic? The industry needs to step back and identify these items and prioritize improved supply chain management of those supplies and product categories.
Demand planning: This is the area that holds the most promise. Everyone across the healthcare supply chain needs to be able to accurately forecast the supplies that they need for clinical care across various scenarios. In 2020, the supply chain crisis was caused by COVID-19, but any number of other events, ranging from a hurricane to a civil or regional war in a country where supplies are produced could also interrupt the delivery of medical supplies.
Among the challenges the industry will face going forward is the tendency to forget the lessons learned from this crisis. It is human nature to have a short memory, and to drift back to a mentality that prioritizes price over planning, safety and quality of care. At the same time, we also must guard against an over-reaction. There has been and will continue to be tremendous pressure to establish U.S. sourcing of certain products.
What we need to do is find the right balance – a rational balance – that incentivizes U.S. sourcing of critical medical supplies while also capitalizing on an opportunity to improve advanced planning, to share information across all industry partners and to find a way to improve supply chain efficiency.
With every crisis, there is an opportunity, and at Prodigo, we are optimistic that our industry will rise to the occasion and make changes that will benefit everyone in the future.
