If we don’t learn from history, are we doomed to repeat it? In 2009, as the H1N1 swine flu swept the globe, U.S. hospitals began to run out of test kits. Some had to set up tents to handle the rush of patients. Supplies of personal protective equipment including N95 respirator masks ran out in many places despite millions distributed from the national stockpile.
Today’s coronavirus crisis is exponentially worse yet eerily familiar. Hospitals in New York, the pandemic’s epicenter, are already overwhelmed and running desperately short on supplies of PPE, ICU beds, ventilators, and other critical equipment. With the rate of infection still climbing across the country, it’s time to leverage lessons we learned from previous epidemics and supply shortages that could help hospital supply chain and clinical engineering (CE) teams respond to the challenges they face today – and prepare for the next epidemic tomorrow.
In 2009 I had an up-close view of the impact of H1N1 as the CEO of the nation’s largest (at the time) group purchasing and supply analytics company. What I learned then and experienced in the years since as various supply shortages have hit the industry is that our healthcare system is not perfect but has the talent and tenacity to endure. We will face some tough times, yes, but we will get through this.
It matters, though, just how we get through it. At this challenging time, it’s important that we embrace positive new patterns of behavior and activity. Here are five lessons from the past that can be applied today to speed improvements to the supply chain and minimize the loss of life:
1. Create open communications between providers and suppliers
One of the biggest challenges we faced during the H1N1 epidemic – and again during the 2015 IV solutions shortage – was unmanageable spikes in demand across certain health systems. Many hospitals resorted to ordering more respirators and IV solution than they needed for fear there wouldn’t be any when their patient load spiked, as expected. This approach exacerbated shortages in other facilities that used just-in-time ordering.
To avoid fear-based stockpiling and ensure access to critical equipment, it’s important to build and maintain open communications between providers and suppliers. Suppliers can work with health systems to manage to their historical ordering patterns and avoid stocking up outside of the norm, including previous spikes in demand. During flu season at my previous company, we always assembled a team to help manage demand on flu items to ensure we had enough gowns, masks and other PPE. To inform the demand for the influenza vaccine, we surveyed our members every year prior to the flu season.
Open communication also fosters supply chain transparency, helping to avoid the kind of wasteful churn we’ve seen during this pandemic as providers search desperately to locate needed equipment and supplies. However, achieving visibility into the location, quality and availability of inventory across various players in the supply chain requires more sophisticated automation and analytics, and ideally an online marketplace to consolidate the hundreds of supplier relationships that most providers maintain.
2. Use analytics to predict demand and forward-buy appropriately.
You can’t manage or improve what you can’t measure. Without advanced analytics to guide purchasing decisions, it is virtually impossible to accurately predict demand and supply. Analytics enables CE teams to monitor high-demand mission-critical items and anticipate which products might be a problem if they became unavailable. By reviewing historical purchasing patterns, both steady-state and in spike conditions, analytics lets CE teams forward-buy using predictive analytics and advanced strategies.
The technology can help by delivering just-in-time information to assure maintenance of optimum stock levels, avoid stock-outs and predict surges in ordering.
3. Evaluate alternatives or new utilization pathways for critical products.
Even the best-equipped most automated supply chain sometimes runs into shortages that can’t be fixed in the near term. When that happens, hospitals are forced to figure out the optimal use of short-supply products to lower demand.
During the IV fluid shortage of 2015-16, some hospitals leveraged alternative pathways for use of Lactated Ringer’s or LR solution, one of the most common intravenous fluids that are used when patients are dehydrated, having surgery, or receiving IV medications. These hospitals found that they didn’t have to use LR solution in every case during surgery and so lowered the overall demand for the fluid.
Similarly, hospitals on the front line of the coronavirus pandemic face critical shortages of ventilators to care for COVID-19 patients. Adjacency markets are jumping in to fulfill the need, and some hospitals are finding they can locate refurbished or rental ventilators.
4. Ensure uptime of mission-critical equipment.
As the current shortage of ventilators shows, it’s critical to have a supply of reliable, cost-effective medical equipment up and running for patients when they need it. Equipment downtime can be deadly during an epidemic. But minimizing downtime requires CE teams to do something that few have the resources to do—continuously track the quality of the parts and services they purchase.
Quality-tracking is virtually impossible when teams independently contract for hundreds of pieces of equipment and thousands of replacement parts—a process that is neither efficient nor their core competency. Instead, they could adopt industry solutions that ensure suppliers are selected based on objective, qualitative and quantitative measurements that are predictive of high quality. These measures include the suppliers’ return rate; their return-during-warranty rate; and indicators of the level of service required over time.
Besides ensuring only high-quality equipment and parts are being purchased, CE teams can expand their access to resources with on-demand equipment servicing options. If the team lacks service capabilities and field service engineers to keep equipment running and is relying on on-contract service, it may be time to consider another option. Some companies support on-demand onsite services provided by a network of independent, local service organizations. This approach ensures the clinical availability of equipment on extremely short notice with repairs by certified experts.
5. Share insights and best practices across your network.
As many have observed, healthcare is a lonely business. Health systems often tend to operate in isolation from their peers. Yet during difficult times like these, healthcare professionals want to know what practice adaptations others have successfully instituted.
Fortunately, CE teams can join online communities that encourage innovation and knowledge-sharing among peers in health systems across the country. In some of these communities, members can access curated content comprised of the latest best practices, along with tools that support strategic initiatives such as Capital Planning, Alternative Equipment Maintenance, and key strategies for achieving high-performance HTM.
While this epidemic is unprecedented by all measures, our industry has experienced and endured many epidemics and countless supply shortages over the decades. Leveraging our learnings from these, we have the experience to effectively manage the coronavirus pandemic, no matter how painful it might be today. It won’t be easy. But by following the strategies I’ve laid out, and by working together to abate fear, we will be in a much better position to manage the crisis.
About Jody Hatcher
Jody Hatcher is the former president of supply chain services for Vizient and a current board member of PartsSource. Prior to that, he had responsibility for all operational businesses of the newly merged VHA/UHC/Novation organization prior to acquiring MedAssets. Before that, he was President and Chief Executive Officer of Novation, which became part of Vizient in 2015. Under his leadership, Novation achieved record-breaking member savings and consistently increased member participation in offerings.