Hospital Leaders Say COVID-19 Is Making Supply Chain Optimization A Top Priority

By Todd Plesko, Syft

Hospital leaders always have recognized supply chain management as a key function within their healthcare systems, but it has rarely outranked other top priorities such as patient safety, optimizing efficiency, and improving revenue.

COVID-19 has changed that. As hospitals struggle with PPE, ventilator, and drug shortages, hospital leaders, clinicians, and patients are growing increasingly aware of the supply chain’s potential to impact patient care and staff safety. This has led to a rapid shift in priorities and resource allocation at hospitals.

That’s according to a recent survey of 138 hospital leaders by Sage Growth Partners. The survey, which took place in early April as the United States approached the peak of the COVID-19 curve, revealed that supply chain management is now hospital leaders’ second most important priority (outranked only by patient safety).

In addition, the survey found that supply chain analytics ranked second (tied with hospital communication) of nine technologies that had increased in importance over the previous four weeks.

Table: Have you identified any key technology solutions that seem more critical now than they did a month ago?

What Every Hospital Should be Doing Now

A second COVID-19 surge could hit the United States in a few weeks or months, and other supply chain disruptions (such as infectious disease outbreaks, natural disasters, or labor strikes) could occur at any time.

To prepare, hospital leaders should immediately take steps to enhance the resiliency and agility of their supply chains. Here are three ways to get started:

1. Create new contingency plans that address serious, long-term disruptions. While most healthcare organizations had contingency plans in place prior to COVID-19, the devastating impacts of the virus revealed that these were not sufficient in scope or duration. While updating their contingency-plans, hospitals should also incorporate sourcing plans for secondary and tertiary resources, and they should begin forming coalitions with other hospitals to ensure they can share scarce resources (as appropriate) when they face the next serious disruption.
2. Automate and update enterprise resource planning (ERP) and materials management information systems (MMIS). While healthcare was initially a leader in implementing ERP and MMIS, the industry has fallen far behind other industries when it comes to supply chain management. Many hospitals haven’t upgraded their systems or transitioned to automated processes. If they do, it will be much easier to track and analyze data efficiently (including data related to inventory), which will enable them to respond to shortages more quickly and use limited resources more wisely.
3. Implement AI-based analytics and demand forecasting that incorporates supply chain disruption into their algorithms. A February 2020 survey of 100 hospital and supply chain leaders by Sage Growth Partners indicates there is a significant need for hospitals to adopt these technologies. Only 12 percent of survey respondents said they use AI or predictive analytics to optimize the supply chain. AI and demand forecasting technologies will help ensure that hospitals have enough critical supplies and devices during the next significant supply chain disruption.

No hospital could have fully anticipated the supply chain challenges posed by COVID-19, but they can, and are, learning from the crisis. As they increasingly prioritize supply chain management and allocate more resources to it, they will quickly begin to better assess, predict, and control their supply needs. When the next crisis hits, they will be ready.

Sidebar: COVID-19 Heightens Consumer Awareness Of Healthcare Supply Challenges

The pandemic has made consumers more aware of the link between the hospital supply chain and patient and clinician safety. That’s according to an April survey of 744 consumers by Sage Growth Partners and Black Book Market Research. The survey found that:

• Consumers have significant supply chain concerns. Only 51 percent believe their providers have the supplies and ability to keep supplies stocked to meet their medical needs.
• Consumers fear that hospitals can’t keep clinicians safe. Sixty-four percent believe providers don’t have enough PPE, and 56 percent are extremely concerned about providers getting COVID-19.
• Consumers believe supply shortages (lack of ventilators) have the biggest negative impact on hospitalized COVID-19 patients—more than provider burnout/illness, social isolation and depression, or drug shortages.

About The Author

Todd Plesko is CEO of Syft, a leading provider of AI-enhanced inventory control and end-to-end supply chain management software and services for hospitals and health systems. He previously founded and led several healthcare technology companies. As CEO of triPRACTIX, he grew the business to become one of the nation’s largest GE Centricity™ resellers. He then founded and was Chairman and CEO of Extension Healthcare, a spin out of triPRACTIX. Extension provided over 270 hospital customers with robust clinical integration and caregiver communications solution. The company was acquired by Vocera Communications in 2016, where Mr. Plesko served as Vice President of Product Strategy.