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The PPE Shortage—Mending a Crippled Supply Chain

By , SVP CHC Supply Trust May 16, 2020 Supply Chain

While some states are lifting stay-at-home orders as new cases of COVID-19 level off, many rural areas are seeing an uptick in cases and may be weeks away from peaking. Therefore, rural hospitals are bracing for the same shortages that have already plagued bigger cities, including a dangerous dearth of ICU beds, staff, respirators, COVID-19 tests and—perhaps most widely reported in the media—life-saving personal protective equipment (PPE) including surgical gowns and heavier-duty N95 respirator masks.

Before the COVID-19 outbreak, most rural hospitals had ample supplies of PPE acquired through group purchasing organizations like CHC Supply Trust, which has been working around the clock supplying PPE to its nationwide network of rural and community hospitals. But the rapid spread of the virus has heightened demand for increasingly scarce supplies, and rural hospitals are seldom first to receive them. 

To help hospitals receive sorely needed PPE, a growing number of volunteer pilots are delivering the supplies to rural hospitals—including remote facilities. But how did the healthcare system get to this point of reliance on volunteer pilots and sewing circles that make cloth masks for hospital staff and visitors who don’t need particulate-filtering N95 masks?

The supply chain disruption is largely due to outsourcing the manufacturing of healthcare products to countries like China, which produces most of the PPE, medical devices and pharmaceuticals for the U.S. When the coronavirus hit China ahead of all other countries, the global supply chain for PPE and other medical supplies collapsed. Inventories of backup supplies quickly dwindled.

Unscrupulous PPE manufacturers worsened the problem by hoarding supplies and selling them at a significant markup to the highest bidders. Most smaller hospitals cannot compete in a bidding war for overpriced PPE. Now that rural COVID-19 cases are on the rise, higher volumes of PPE are still being sent to urban areas that were first hit hardest by the virus. 

To help hospitals, many companies have converted their manufacturing operations to produce PPE, but much of the equipment goes to higher-profile facilities in larger areas. An exception is Mt. Pleasant, Texas-based Sweet Shop USA, which shifted some of its chocolate-making operations to produce PPE at a fair price. Calling that arm of the business Wayfinder Face Shields Company, the plant is using see-through plastic (normally used to make box tops for truffles) to manufacture face shields for healthcare workers. Titus Regional Medical Center, a CHC Supply Trust client hospital, purchased about 10,000 of the company’s face shields that were of comparable quality to those that the Mt. Pleasant hospital had bought through traditional channels.

Assembly line conversions are only a temporary fix to the virus-induced supply shortage that has been a wakeup call for the healthcare community. To help avoid future supply chain breakdowns, CHC Supply Trust and its network of hospitals are implementing long-term plans: 

  • Stockpiling certain supplies (although just-in-time inventory management is still the cost-effective approach for most medical and surgical supplies)
  • Ordering reusable gowns instead of single-use gowns when appropriate
  • Expanding CHC Supply Trust’s vendor network
  • Identifying more domestic sources for supplies       

The PPE shortage is part of a larger problem. The coronavirus has caused the U.S. to reconsider the pharmaceutical chemical supply chain, as well. The Senate’s Committee on Finance is considering the Strengthening America’s Supply Chain and National Security Act, aimed at reducing reliance on foreign countries for pharmaceutical ingredients and drugs. 

The pandemic has raised awareness that keeping adequate supplies on hand is a matter of national security and public health.

By , SVP CHC Supply Trust May 16, 2020 Supply Chain
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