Camille Baxter:
Hello and welcome to Healthcare Insider, a sponsored content podcast series from Modern Healthcare Custom Media. I'm your host, Camille Baxter, and today we are thrilled to welcome to the podcast Jon Pruitt, Senior Vice President of CHC Supply Trust. In his role, Jon is responsible for overseeing a comprehensive supply chain management strategy for Community Hospital Corporation, which partners with hospitals to help them remain community operated and governed. Today we are talking to Jon about the supply chain challenges hospitals across the US continue to face since COVID and how community hospitals can respond. Jon, thanks so much for being here today.
Jon Pruitt:
Thanks, Camille. I'm happy to be here and it's my pleasure to speak to you and the Modern Healthcare audience.
Camille Baxter:
Great. Well, let's jump right in. The healthcare supply chain received a lot of attention during the height of the pandemic with shortages of masks, gowns and other critical equipment making national headlines. Why are supply chain issues still continuing to this day?
Jon Pruitt:
That's a great question, and it's really still related to the pandemic. Honestly, the good news, we've overcome the PPE shortages, and that's the good news. The bad news is we're still addressing supply chain issues and shortages all over. It's not limited to PPE, and it's really still attributed to the pandemic. We still have supply chain issues due to raw material shortages, staffing issues. There's still pandemic COVID issues going on overseas. So it's still a challenge post-pandemic. It's still a symptom of the pandemic.
Camille Baxter:
So that long tail that is talked about, it sounds like it's really affected so many areas of healthcare delivery.
Jon Pruitt:
Absolutely. It's, like I said, not limited to PPE, but it's pharmacy. A lot of the raw material and pharmaceuticals come from China and other parts of the country, so it's not limited to one category. We're dealing with it in radiology products, sponges, gauze. It is just not limited to any product category, so you have to be well-prepared to address those shortages and have a strategy to plan for those disruptions, and have a course of action and not be reactive.
Camille Baxter:
Well, that was one of the things I was going to ask about is some of the categories of supplies. Are there certain categories of supplies that are particularly expensive or limited right now?
Jon Pruitt:
Well, pharmacy continues to have a lot of challenges, and that's not anything new, but as drugs become scarce, it's really incumbent upon finding biosimilars, therapeutic equivalent products, and having a strategy and a formulary to be prepared for that. Some of the products that are proprietary in nature may not have a generic product or a therapeutic equivalent, but if you can find something that's perhaps a biosimilar or some product that is an acceptable substitute, maybe not a direct equivalent product. So those strategies in pharmacy is critical, and that's a key category. But on the medical surgical portfolio, it's really across the board. Unfortunately, it's not a specific category that we're dealing with. You have to be prepared to address multiple categories.
Camille Baxter:
Wow, very interesting. So how are hospitals responding to the rising costs of supplies and the limited availability?
Jon Pruitt:
Let me address the limited availability question first. It's really incumbent upon the supply chain team and the hospital administration, the leadership of the hospital, to really have an approach to plan. Like I said, plan for disruption, plan for shortages, be proactive on addressing back orders. And how you really do that is identifying a core list of products that you just simply can't run out of. And it might be your top 200 items, for example. And really work closely with your value analysis teams at the hospital, working closely with your clinical committees, to identify acceptable substitutes and back orders so that you're not left flatfooted if a back order situation occurs.
And I'll just give you a quick example. If there's an IV catheter that's on back order, that's a very clinically sensitive item that requires nurse training, et cetera, and it does touch multiple departments of the hospital. If your primary IV catheter is on back order, do you have a plan? Have you already evaluated a secondary or perhaps even a third acceptable IV catheter that your team's been trained on? And so you go through that core list and identify the acceptable products and have that already built in your item master, have the in-services already been conducted in the training so that you're prepared for those substitutes. So that's one way that you can strategically address substitutions, back orders and plan for disruption.
But as it relates to rising cost, that also really is incumbent upon the supply chain and the value analysis teams to identify a standardization approach to really identify products that are clinically acceptable, but also looking at the cost control component of that and understanding is there a product that's acceptable but at a lower cost? Is there strategies to reduce the number of products in a given category to streamline an approach?
Another way to control cost is to truly evaluate your GPO partner. Is your partner providing the most aggressive pricing possible? Is there a better option out there for you to consider and really test the market? A lot of hospitals that are joining our organization have been with a competitive GPO for 30 plus years and had really not gone out and tested the market. So I would encourage hospitals to really push the envelope, have a sense of urgency, and really go test the market. GPOs can address all these categories and make sure you're getting the best pricing possible.
Camille Baxter:
Yeah, sometimes those relationships have been there for so long that sometimes people don't think about looking for other alternatives. So you talked about strategy and the need for strategy and planning for backlogs and shortages. What are some other innovative practices that you're seeing hospitals implement to respond to these supply chain concerns?
Jon Pruitt:
It's really developing those relationships. So with your key distributors, your key GPO partner, to say, "Hey, I need to have visibility upstream into the supply chain to really understand, is there a challenge at the raw material where these are products are coming from," so that you can plan accordingly. And again, it's all about communication. In today's environment, we just can't simply be reactive, and we don't want it to be Christmastime every time you're receiving products at the dock, or I should say not receiving your products at the dock, and you don't want to be surprised at that point. So it's really having the expectations clearly defined upfront with your primary distributors to say, "I need to know way in advance, as much as advance notice that you have, into the raw material so that we can plan accordingly," and have them help the facilities identify acceptable back order situations as far as planning in advance acceptable products, et cetera. So it's really that partnership and that relationship-building component is another strategy to address that.
Camille Baxter:
Yeah, it sounds like the need for that to be collaborative is so important so that the communication is going both ways, which is going to help the healthcare institution plan better and build their strategy. Jon, what do you see looking forward? How can hospital leaders combat supply chain disruptions and increasing costs, and what resources can help?
Jon Pruitt:
Well, I'll go back to the GPO partnership. It's really, they're the voice. They're the ones that are negotiating the contracts. So the language in those agreements need to be more clearly defined as far as the expectation, and I know our GPO partner is doing that. So the contracts that are in place with our manufacturers have that expectation, that communication process, that advance notice so that we are all in this together and it can be better prepared. So I think it really starts at that level where the contract is written and have that level of engagement with the suppliers to hold them accountable, understanding that not everything is under their control, but bad news doesn't get better with age. So as the supplier is made aware of manufacturing issues, that needs to be instantly communicated to the GPO partner and disseminated down to its members and also our distribution partners. So again, I think it comes back to relationships and expectations and really evaluating your GPO partner to make sure they're aligned with the expectation in today's disruptive environment.
Camille Baxter:
Yeah, it sounds like that partnership is key to really being able to implement an effective supply chain strategy. Before we close, Jon, is there anything else that you'd like to add for our listeners to understand and know about supply chain disruption?
Jon Pruitt:
Well, again, I think it has to really center around communication and that you have plans in place to overcome those shortages. Again, having a value analysis team in place, having the clinically integrated supply chain so the clinicians are engaged, and being proactive, identifying that core list of products that you absolutely can't run out of. And identifying multiple clinically acceptable products so that when disruption happens, you have a plan and it doesn't add stress, and it doesn't create a negative outcome situation because you don't know how to use a product because you've never seen it before. You've already vetted it, you've already evaluated it, it's acceptable. It's already built in your system, so it's just part of the normal daily operating procedure to really plan for those back order situations.
Camille Baxter:
Jon, I want to thank you so much for being here today and for sharing helpful healthcare supply chain updates. Thank you very much.
Jon Pruitt:
Thank you, Camille. It's my pleasure to be here, and I'm very pleased to be here and be able to convey this information to the Modern Healthcare audience.
Camille Baxter:
It's so important.
Jon Pruitt:
Thank you so much.
Camille Baxter:
This has been a sponsored episode of Healthcare Insider, created in collaboration with Community Hospital Corporation. For more information, please visit communityhospitalcorp.com. I'm your host, Camille Baxter. Look for more episodes of Healthcare Insider under the multimedia tab at modernhealthcare.com or subscribe to your preferred pod catcher. Thanks for listening.
