On a Thursday morning early in the pandemic, Providence Senior Vice President and Chief Value Officer Jennifer Bayersdorfer and her team met with officials at Kaas Tailored to craft a way to work with the Mukilteo, Wash.-based upholstery manufacturer on personal protective equipment. By noon, Kaas had a basic face shield prototype on the production line.
The Seattle area was one of the first in the U.S. to be hit by the novel coronavirus, and Providence’s supply of PPE in hospitals caring for COVID-19 patients was at “critically low levels.” The medical supply chain relies heavily on China, where the virus originated, and was unable to keep pace with skyrocketing global demand.
“We knew that there was this demand that was impossible to meet through our traditional supply chain channels, yet there were no alternatives that were coming through at that point,” Bayersdorfer said.
As providers across the country—and globally—scrambled to track down enough PPE to protect employees and patients from the new viral enemy, the coronavirus wreaked havoc on the medical supply chain, creating an acute shortage of face masks, respirators, gloves and gowns. Faced with rising cases and a shrinking PPE supply, providers started looking beyond traditional outlets. The support from small and large domestic manufacturers was overwhelming; so out of necessity industry and healthcare providers together created what could become new long-term supply chains.
“At the beginning, we felt like we were going to need the crafting circles of America to get through this,” Bayersdorfer said.
Building on its relationship with Kaas, Providence created the 100 Million Mask Challenge, urging individuals, businesses and manufacturers to help supply PPE for the medical field. After seeing offers to help flood in, Providence handed the reins over to the American Hospital Association to manage the challenge nationally.
Though most hospitals were able to scrape together enough supplies through innovative channels, the scramble raised questions about how to create a more sustainable procurement process. As the head of the Federal Emergency Management Agency, Pete Gaynor, recently told lawmakers, the country’s healthcare supply chain is not out of the woods.
“The traditional supply chain is still far from restored. I think that this has pointed to a need to diversify much more, especially as we just look at the lack of domestic capacity to manufacture these things,” Bayersdorfer said. “I think the downsides of globalism have reared their head during this pandemic.”
David Dobrzykowski, an associate professor of supply chain management and director of the Master of Science in supply chain management program at the University of Arkansas, said the pandemic “created a sea change of disruption in the supply chain” that hadn’t been seen before. Past major disasters were geographically isolated and had a limited duration, unlike the current pandemic, he said.
“This is a 100-year pandemic,” Dobrzykowski said. “While the existing supply chain did everything that was reasonable to do, there was no way around bringing in new sources of supply. The whole world was in the same situation.”
For example, while 3M committed in March to doubling its annual production of N95 masks to more than 1.1 billion, that was “still a drop in the bucket” when it came to overall demand, Dobrzykowski said.
Premier, a consulting and group purchasing organization, estimates the surge demand for N95 masks is 17 times higher than usual, according to a survey of more than 1,500 U.S. hospitals. And the problem is exacerbated by the supply chain’s dependence on low-cost products from Asia, those in the industry say. Shawn Osborne, vice president of pharmacy and supply chain services at University Hospitals, Cleveland, said there had been a “multidecade journey of wringing out costs,” especially as the market has consolidated.
“The resilience on a global scale has kind of faded away. As we’ve gotten better price points, we’ve lost resilience,” he said.
So healthcare providers turned to novel manufacturers. Across the country, plants that typically offered print finishing services like lamination started producing parts for face shields; facilities that made uniforms started sewing gowns and cloth masks.
“There was no infrastructure in the early days of the pandemic for getting PPE to the hospitals that needed it the most,” said Andy Shin, chief operating officer at the AHA Center for Health Innovation.
The AHA, through the 100 Million Mask Challenge and HealthEquip, a PPE sharing initiative, started vetting manufacturers and pairing their goods—as well as donated items—with healthcare providers in need, an effort that is still ongoing.
State and regional efforts also took hold. Ohio in late March created the Ohio Manufacturing Alliance, a public-private partnership among manufacturing and economic development groups, the state hospital association and the government, to create PPE locally. Just days after Gov. Mike DeWine announced the alliance, 2,000 manufacturers had signed on, said Ethan Karp, CEO of Magnet, a not-for-profit consultancy for Northeast Ohio manufacturers and one of the alliance’s leaders.
Through efforts like these, healthcare providers and manufacturers that never before had relationships have come together as the country has pivoted to make PPE. And those involved on the medical and manufacturing sides say these partnerships could last beyond the pandemic.
“I think it really is an opportunity to expand upon the initiatives and the partnerships that have been fostered in the past months,” Shin said. “We absolutely need to think broader and outside the silos of healthcare when we think about the solutions of healthcare.”
Because even if state and national stockpiles are created, as many think will be the case, those supplies often go to the most in need, leaving other healthcare providers to source their own products, Karp said.
In May, Premier and 15 health systems bought a minority stake in Prestige Ameritech, a North Richland Hills, Texas-based manufacturer of N95 and surgical masks and committed to buying a share of their masks annually from the company for up to six years. “We did that as an innovative, strategic supply chain approach,” Osborne said. University Hospitals was one of the systems involved in the deal.
Osborne said there will be a paradigm shift in how medical supplies are sourced moving forward as providers look for more sustainable options.“This is absolutely game-changing,” he said. “You are going to see more domestic sourcing of PPE and other key medical supplies.”
But, for that to happen, there will need to be commitments from the healthcare community to make investing in new product lines a manageable risk for industry, manufacturing advocates said.
“We have had a lot of folks say that their desire is to have X percent locally made,” Magnet’s Karp said. But manufacturers worry that when the traditional supply chains reopen that the medical systems and their distributors won’t stick to those plans, he said. “History would show us that in any form of disruption—albeit this was more than ever before—price ruled the day, inertia ruled the day,” Karp said.
But he hopes this time will be different because hospitals are embedded in their communities and have a local focus. Health systems are already having those conversations, Osborne said. “There will be demand for it. People will pay a reasonable premium to have a clearer supply line all in the name of sourcing diversification.”
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August 08, 2020 at 12:00PM
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Healthcare, industry forge new supply chains in the fight against COVID-19 - Modern Healthcare
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