During the COVID-19 pandemic, healthcare supply chain issues were complex and plentiful, creating an unprecedented mess for hospitals struggling to care for an increased load of patients.
Hospitals were without adequate masks, gloves, medical devices, medications and more. Today, a few years later, healthcare's supply chain problems persist. In some cases, they are even worse.
A single disruption in the supply chain can create nationwide ripple effects in healthcare delivery. This worldwide risk was highlighted most recently by the ongoing IV fluid shortage causing delays in treatments and rationing across the country.
Hurricane Helene caused flooding at Baxter International's North Cove facility in Marion, N.C., which produced 60% of the U.S. IV fluid market's supply. Here's a recap from Becker's of the fallout from the plant temporarily closing and the ripple effect it is having on hospitals. The storm stopped the plant from manufacturing the IV fluids, leading hospitals to ration, delay cases and conserve.
Hospitals have had to be resourceful, and some temporary solutions are being implemented now.
This current challenge puts the spotlight again on the fragility of the nation's healthcare supply chain.
Overview of the problem
There are many reasons for consistent supply shortages, including man-made failures and natural disasters, that lead to a disruption in production or delivery. All it takes is a weather event, labor shortage or increased consumer demand to create problems all along the supply chain continuum.
Unfortunately, there are no signs of it getting better anytime soon. According to a Senate committee on Homeland Security and Governmental Affairs report, drug shortages in the United States reached a five-year high in 2022, with 295 active drug shortages at the end of the year.
As the report's executive summary stated: "These shortages have cascading effects on patient care, causing delays in treatment, increasing the risk of medication errors, and requiring the use of less effective alternative treatments. Hospitals have also experienced increased costs, medication waste, and limited staffing capacity to address and remedy shortages."
Hospitals are seeing shortages of a variety of medical products, and hundreds of drugs are not available for patients every year because of supply chain flaws. FDA keeps a running list of medical shortages, which is updated daily. Some of these shortages are alarming, and the think tank Brookings has studied how the government might tackle them.
In another report, Premier says unforeseen events are causing healthcare providers to experience hundreds of different product shortages that impact patient care and hinder quality outcomes. In its survey, nearly half of U.S. healthcare leaders (48.6%) said they have had to cancel or reschedule cases or procedures at least quarterly in 2022 due to product shortages.
What causes supply chain interruptions in healthcare?
In this report about supply chain, authors assessed three common reasons.
1. Demand surge: An event drives demand for a medical product well above the normal level for an extended period. For example, during COVID-19, there was global demand for numerous products, including PPE.
2. Capacity reduction: One or more production or transport processes stop functioning like normal due to a weather event — like the situation with IV fluids.
3. Coordination failure: Sometimes these unforeseen events reduce or stop the delivery of emergency supplies.
How do we fix it?
There are a few recommendations for hospitals to strengthen their supply chain function, as studied and proposed by McKinsey:
1. Ensure sponsorship from senior clinical leaders. The report encouraged hospital systems to engage the chief medical officer (CMO), chief clinical officer (CCO), chief nursing officer, and service line chairs as visible and active sponsors of clinical supply chain efforts.
2. Formalize cross-functional, specialty-focused teams to evaluate strategies for each category. The report recommended formal committees of clinicians and supply chain leaders have shared responsibilities for all supply chain initiatives.
3. Invest in an on-the-ground supply chain team. Leaders surveyed said supply chain initiatives are more effective when in-person discussions are held between supply chain colleagues and clinicians.
Supply chain leaders are experienced in being resilient when disaster strikes — but maybe there is more they can do. Premier recommends doing these three things before disaster strikes to protect the supply chain:
1. Know your risks. Documenting potential emergencies and/or disruptive events then preparing by ranking them by importance and likelihood of happening.
2. Asses supplies and safety stock. "Lean" and "just in time" strategies can hinder the need to identify substitute product options, with supply interruptions compounding the lack of inventory on hand at manufacturing and distribution sites.
3. Test the plan. Teams should be familiar with the plan and hospital staff should be sure they understand their roles in case of a supply interruption.
Can technology help solve the world's healthcare supply chain challenges?
Many improvements have been made to the healthcare supply chain over the past few decades, largely due to new technologies. While hospitals are stretched by high demand for investment in innovation, supply chain leaders think that's also the way to solve the current supply chain puzzle.
Supply chain technology, for example, can provide real time tracking of inventory and use predictive analytics to better anticipate ongoing needs. Digital innovations are being used across the country in hospitals to improve patient care and it might be the ultimate solution for fixing the often-stressed supply chain.