Crisis management, resiliency, inventory, and vetting alternate sources have become critical during the pandemic and beyond
October 2021 – The Journal of Healthcare Contracting
The pandemic highlighted the complexity of healthcare and many issues that healthcare supply chain leaders needed to focus on or change. Crisis management, resiliency, inventory and vetting alternate sources arose with greater importance during the pandemic and are keys to the future of health system supply chains.
Healthcare Industry Consultant Brent Petty recently moderated a webinar for The Journal of Healthcare Contracting, sponsored by Dukal, on “4 Ways IDNs are Avoiding Supply Disruptions.” Participants included Gary Fennessy of Northwestern Memorial HealthCare, George Godfrey of Baptist Health South Florida and Lisa Risser of Scripps Health. They discussed how these topics helped their health systems endure the pandemic and plan for the future.
“We had to change the way we thought about things,” said Gary Fennessy, vice president, chief supply chain executive for Chicago-based Northwestern Memorial HealthCare. “We put a focus on what we could manage internally. We can’t control a virus on a national level or manage vendors having supply disruptions in foreign countries.”
Health systems found themselves challenged acquiring enough personal protective equipment (PPE) in a timely manner and had to ask questions about their ability to gather pertinent information quickly.
“We started with simple questions and asked for information back in 15 minutes,” Fennessy said. “For example, we needed to know how many gloves we had, by size, at each of our 11 hospitals and we needed an answer in 15 minutes.”
“It was crickets. After 30 minutes, crickets. After an hour, crickets,” Fennessy continued. “We quickly realized that our ability to gather information and react to it was less than optimal.”
Other health systems thought they had plenty of PPE supply but once their hospitals began seeing COVID-19 patients, that quickly became a problem.
“We had six to nine months of N95 masks on hand going into the pandemic,” said George Godfrey, corporate vice president and chief supply chain officer for Coral Gables, Fla.-based Baptist Health South Florida. “That turned into four weeks of supply after we started seeing COVID-19 patients. It was different and we didn’t have control of it.”
Godfrey tried to make sure everyone on Baptist Health South Florida’s supply chain team understood their role in a crisis. “The last thing you need is someone saying, ‘I didn’t know the gloves needed to be delivered to this hospital last night,’ for example.”
The speed of communication and finding solutions is critical as everything moves at a rapid pace in a crisis. “Switching from product A to product B and accommodating the patient is crucial,” Godfrey said.
“Communication is important, while focusing on being transparent about internal processes,” added Lisa Risser, senior vice president, ancillary operations for San Diego-based Scripps Health. “We ran a command center for our health system and supply chain and provided daily updates to our leadership team across the organization, including physician leaders.”
Scripps Health provided reports to its leaders twice per week for major areas of supply and specifically PPE. It set expectations for supply through what they had on hand and their burn rate by hospital and area. “If our burn rate was getting high at a particular hospital, we would focus on it and make sure we weren’t overusing in a certain area. If it was high for a particular reason, we understood it better and provided more supply.”
Risser said they didn’t have much time for vetting substitutions and told physicians to keep complaints low unless it was clinically unacceptable. “We needed the supply team to focus on levels of supply,” she emphasized.
Scripps Health was connected to the clinical side to understand what supplies were clinically sensitive and to know, in advance, where there was potential supply disruption. If there was a system standard for specific products, it was put in the terms of the contracts to stabilize and guarantee specific supply.
Northwestern Memorial HealthCare focused on tying its standardization process back to its internal processes. Fennessy said that’s something all supply chain executives can do within their health systems and do it in a more effective manner.
“We’re re-evaluating our standardization in terms single vendor versus dual vendor strategy,” Fennessy said. “We’ll look at those products considered high risk and work with clinicians to validate some of our assumptions. We’ll also use data and information to help make those decisions, which will help us in the long run.”
Godfrey added that the healthcare industry is behind on demand and inventory management. “It isn’t like other manufacturing facilities that require the ability to pivot on demand fluctuations. We typically don’t see high demand fluctuations,” he said.
Baptist Health South Florida invested in tools allowing it to look at demand during a five-day period, a 30-day period and a 180-day period. They also added classifications for supplies to their system, including PPE and hurricane classifications.
“We need to closely monitor potential supply distribution outside of this pandemic,” Risser said. “We can work with our suppliers more closely and watch what’s going on in the world that could potentially disrupt supplies or specific supplies so we determine what should increase and have some bulk purchasing of specific items.”
Scripps Health tried to estimate utilization 90 days out during the pandemic. “Building up for that again, knowing what the clinical alternatives might be and doing a better job estimating what our volumes might be is critical to meeting future demand,” Risser said. “We are focusing our efforts on optimizing our par levels and understanding the demand, so we know what we need in our inventory.”
“Many times, we were told we would get PPE or gloves and those supplies didn’t come,” Risser explained.
“The instability of supplies was substantial when the pandemic first hit,” Godfrey added. “We had hundreds of calls coming into our supply chain team each day from organizations that were newly created, and, in many cases, they didn’t even have goods to sell.”
Baptist Health South Florida created a new vetting process and manned it with its internal audit team. It engaged community leaders in South Florida to find new connections with manufacturers.
“We’re not in emergency mode bidding for new suppliers anymore,” Godfrey said. “But it was a mess 18 months ago and it took some creativity to manage it.”
Fennessy added that Northwestern Memorial HealthCare’s supply chain team was given a lot of freedom to vet new suppliers.
“We tried to use our best judgment based on the information because things were moving so quickly. We were fortunate we didn’t get burned at any point,” Fennessy said. “There were so many lessons learned in this process and we’ll all become better for it. I’m glad I was there for the show.”
Dukal would like to recognize and thank all the participants for their critical work during the past 18 months. As a national leader in PPE and other disposable medical supplies, Dukal continues to work closely with IDNs across the country to reduce the risk of critical supply chain disruptions.
Dukal accomplishes this through manufacturing, diversification, market-leading quality and regulatory oversight, inventory guarantee programs, and most importantly, transparent partnerships with distribution and healthcare providers.
Dukal believes that enhancing family and community health is the way to a better future.
Please visit dukal.com for more information on partnering with Dukal.