The COVID-19 pandemic exposed the true costs, human and otherwise, of health disparities, as low income and minority populations suffered disproportionately from the virus. Blacks, Native Americans and Hispanics were 2% to 3.3% more likely to be hospitalized or die from the virus compared to non-Hispanic Whites, primarily because of a higher prevalence of underlying disease states (hypertension, obesity and Type II diabetes) caused by relative lack of access to the so-called social determinants of health: good paying jobs, healthy food, safe housing, and transportation, among others.
As with so many aspects of the pandemic, supply chain is front and center in the fight, which is playing out on their home turf, literally. Once again, supply chain is also getting noticed in the executive suite, as the boards of trustees for America’s hospitals prioritize health equity in preparation for taking on more risk for the populations they serve under value-based reimbursement programs. Here are few ways they are making a difference.
1. Bringing Diversity Home
Supply chain professionals have long sought to increase their spend with diverse suppliers, defined primarily as those that are women, minority, veteran, or LBGTQ-owned. That data is tracked and often used to support grant applications. More recently, transparency around that spend is being mandated. In California, for example, Assembly Bill 962 (AB 962) requires all hospitals meeting a certain threshold to report how much they spend with diverse suppliers each year.
But for many health systems, diversity is not enough. They want to make sure they are using their purchasing power to support the health and well-being of local communities where the patients they serve live. Spending in local communities has a multiplier effect. For example, investing in a local business supports job creation; in turn the wages for those employees generate local tax dollars and increase their ability to spend and generate wealth in their own communities.
By Karen Conway, vice president of healthcare value, GHX.
The disruption wrought by COVID-19 is unmatched in recent history. While the lasting implications have yet to be fully understood, the limitations of the global healthcare supply chain have been exposed. While it is impossible to predict when another crisis will hit, there are steps healthcare organizations can take now to mitigate future risk.
1. Collaborate with Key Stakeholders on Continuity Plans
Excellent crisis management begins with pre-planning. Bring together key internal stakeholders, such as clinical, financial, risk management and operational leaders, as well as external contributors, including public health agencies, local government officials, distributors and manufacturers. Pre-planning builds relationships and trust as participants anticipate needs, identify necessary resources and develop contingency plans.
2. Create Evidence-Based Protocols for Supply Utilization with Clinicians
There is a growing body of evidence surrounding the safe and sustainable use of personal protective equipment (PPE) and other critical resources, including scenarios in which alternative products or protocols may be required when demand exceeds the capacity of traditional sources. This evidence can support advance work with clinicians to determine how and when to source comparable alternative products or implement conservation measures. Pre-planning will help reduce clinician stress when changes are required during times of crisis.
3. Recognize Risks Associated with Current Supply Chain Practices
COVID-19 has called into question reliance on Just-In-Time (JIT) inventory practices, which are pervasive across most supply chains as hospitals seek to reduce costs. JIT delivers products on an as needed basis in contrast to keeping large quantities on hand. This can increase risk when there are upstream supply disruptions or unanticipated spikes in demand. COVID-19 has led supply chain leaders to rethink the risks associated with JIT and consider how improved inventory visibility and demand planning across the supply chain can enhance the ability to respond quickly to avoid potential shortages.