Reshaping Healthcare Supply Chains For Future Resilience

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The COVID-19 pandemic revealed weaknesses in the US health system’s supply chains, leading to persistent shortages, economic uncertainty, and inflation. This presents an opportunity for health systems to enhance their supply chain resilience.

Health systems faced challenges during the pandemic due to sudden and severe supply shocks. They had to quickly restock essential personal protective equipment (PPE) such as masks and gloves, often bypassing normal procurement practices. This could result in overstocking, poor-quality supplies, or no supplies at all.

While the pandemic’s supply disruptions are subsiding, health systems continue to experience shortages of crucial medical supplies. As a result, they are shifting focus from managing immediate shortages to improving long-term procurement resilience. This article discusses the characteristics of health system supply chains and proposes four actions to enhance resilience and mitigate risks.

Managing a healthcare supply chain is intricate, involving numerous contracts with global suppliers. Complex factors like economic conditions, supply base efficiency, logistical disruptions, geopolitical constraints, and potential demand-side threats add to the complexity. To bolster resilience, health systems should increase visibility into their supply chains. Internally, this involves consolidating inventory data across locations and utilizing tools like RFID bar-coding for select supplies. Externally, health systems can collaborate with purchasing organizations and distributors to gain insights into upstream supply chains.

Product-specific strategies can mitigate disruptions. Health systems should identify critical items and devise protocols to manage their demand. Being proactive, they can stockpile vulnerable products and shift from sole-source to multisource contracts with suppliers to diversify risk.

Developing protocols, capabilities, and governance is essential. Establishing a dedicated resilience team with cross-functional representation enables rapid response to shocks. Scenario planning, communication strategies, and cost optimization contribute to overall preparedness.

While it’s impossible to eliminate all risks, lessons from the pandemic can guide health systems to minimize risk and increase resilience. Balancing investment and preparedness is crucial in a challenging environment.