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Fixing the weak links in hospital supply chain

by Lauren Dubinsky, Senior Reporter | February 22, 2021
Business Affairs
From the January/February 2021 issue of HealthCare Business News magazine

These strategies were deployed due to the pandemic, but Bissette believe they will still play an integral role post-pandemic.

“Healthcare, by its nature, is volatile, and the supply chain feels a lot of that burden,” he added. “Relying on integrated data-driven analytics to make fact-based decisions will ultimately help reduce that burden.”

The rise of dubious PPE distributors
During the most extreme periods of the PPE shortage, thinking outside the box was critical to averting potential disaster.

“While we were getting really close to running out of stock, we did make an extremely large purchase of hooded ponchos from Walmart,” Kelli McCrory, enterprise director for clinical strategic sourcing at Jefferson Health, said during a session at this year’s Association for Health Care Resource & Materials Management (AHRMM) virtual meeting. “Thank goodness we never had to use them, but we’re ready for the next flood.”

McCrory and her team avoided having to use ponchos because they turned to alternative medical equipment suppliers to stock up on protective gear. At the height of that initial surge, many dubious and unreputable PPE dealers emerged to make a profit on the shortage.

“I think one of the strangest phone calls or emails I got was from a jet broker who was now selling PPE,” McCrory recalled. “Many of these suppliers also wanted to get paid upfront. There were hospitals across the country that paid a huge portion of the money — between 50% and 100% — upfront, and did not get the product.”

TractManager’s Dyer also noticed an increase in alternative authorized suppliers. Last March and April, almost every healthcare facility in the country was trying to vet out lesser or unknown suppliers.

“They went through a credentialing process to ensure that they were reputable and who they said they were and were distributing authentic supplies and not knockoffs,” said Dyer.

TractManager looked at their data repository of contractual agreements that U.S. hospitals had with a known supplier over the previous 12 months and posted a few known-supplier lists on its website for providers. If similar situations arise in the future, Dyer suggests vetting the suppliers through peer organizations or AHRMM.

A more price-transparent future
The data analytics at TractManager have a unique insight into the deal-making that takes place between suppliers and their healthcare provider customers, because hospitals send them quotes from a given supplier and they analyze and benchmark it and then send back their recommendations.

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