How to fix the broken supply chain?

The following is a guest post from Anne Snowdon, PhD @DrAnneSnowdonRN and Nancy Pakieser @Pakieser They will be leading us in a discussion about healthcare’s supply chain – how broken it is and how we might fix it together.

Join them on Tuesday March 15th at 8:30pm ET (for your local time click here).

The COVID-19 pandemic rapidly exposed the fragility of the global healthcare supply chain system. At the same time, it revealed the absolute necessity of healthcare supply chains for safe and effective care delivery. Prior to the COVID-19 pandemic, health systems in Canada had come to rely on lengthy, lean, and undiversified healthcare supply chains. Seeking the lowest possible price points, manufacturing capacity in Canada was offshored and supply chains were greatly lengthened. And yet, the more these supply chains were lengthened, the more brittle, or prone to disruption, they became. At the same time, a shift towards “just-in-time” supply management and logistical models–in which supplies were only delivered as needed–often resulted in the elimination of redundancy, or the maintenance of additional stock, across the healthcare supply chain. In some cases, critical supplies housed in provincial stockpiles were left to expire or were discarded (Snowdon & Saunders, 2022). It was this situation of systemic fragility that characterised the pre-pandemic healthcare supply chain system in Canada. 

A critical lesson learned from the COVID-19 pandemic was the uniqueness of the healthcare supply chain relative to other business sectors and industrial supply chains. The unique end of the healthcare supply chain is human life, which differentiates it in many key respects from industrial supply chains; and the supply chain management strategies and practises best suited for industrial supply chains have, at times, proven to be inimical to the exigencies of care. Just-in-time supply management models, for example, have been imported from the industrial supply chain sector to the healthcare supply chain sector, often in the name of cost saving and efficiency over preparedness and redundancy. Unlike industrial supply chains, however, any destabilisation of the healthcare supply chain has a bearing on human life and care for this life. Gloves, gowns, and surgical masks are worn by care workers engaged in care; linens and beds–not to mention more complex pieces of equipment like ventilators–are necessary to ensure that patients can receive this care. A shortage of critical products, such as personal protective equipment or ventilators, puts at risk human life in a way that a shortage of semi-conductor chips for automotive vehicles does not. For this reason, the measure of healthcare supply chain resilience must be very different from their industrial counterparts. Given that there is a person at the end of the healthcare supply chain, any failure along the healthcare supply chain is unacceptable. Put otherwise, these failures are not just logistical but moral. 

Healthcare supply chains, then, are fundamentally interwoven with safe and effective care delivery. The destabilisation of the health supply does not just entail a delay in the movement of supplies; it puts at risk the ability of health systems to provide safe and effective care. During the pandemic, critical supply shortages in Canada had a tremendous impact on frontline healthcare workers and the safety of their work environment; shortages of N95 respirators, in particular, led to the implementation of conservation strategies by health system leaders. These conservation strategies relied on “allocation” frameworks, which indicated the medical situations in which respirators could be accessed. And yet, these allocation frameworks greatly limited the ability of frontline healthcare workers to freely exercise their professional judgment, primarily through point-of-care risk assessment, which eroded their trust in health system leadership (Snowdon & Saunders, 2021).

Accordingly, any approach to fixing the healthcare supply chain system must first understand this unique end of the healthcare supply chain in care for human life. Considerations of cost containment versus supply chain resilience (resilience generated through, for example, the cultivation of a local supply of critical products) should be approached in the light of the unique organising purpose of the healthcare supply chain. Moreover, short-term cost containment strategies did not prove to be fiscally prudent during the COVID-19 pandemic: in the course of our CIHR-funded rapid research project, health system and supply chain leaders in the provinces of Newfoundland and Labrador and Nova Scotia expressed how savings generated through cost-saving initiatives were often quickly exhausted by their pandemic efforts to stabilise their healthcare supply chains. One health system leader in Newfoundland expressed it this way:

I really think we need to look at how supply chain can impact how we deliver services globally. So we really need business continuance. We need to look at it differently. We need to look at our sourcing strategies. We need to get value, but every bit of money that we saved over the past five years—we just spent it all.

As the healthcare supply chain is concerned with care for human life, short-term cost saving initiatives, dominated by the drive to reduce health costs, do not honour the organising purpose of healthcare supply chains: caring for the person at the end of the healthcare supply chain. Fixing the broken healthcare supply chain system may require recognizing and acknowledging this organising purpose, as well as the enshrining of this recognition in policy that supports long-term “just-in-case” supply management over short-term cost saving initiatives. In making clear the bond between healthcare supply chain processes and health delivery, the question that the COVID-19 pandemic poses to us is not just “how do we fix the broken supply chain?” but also “what is the economy adequate to maintaining healthcare supply chain resilience and sustainability?” Redundancy (or “just-in-case”), not efficiency (or “just-in-time”), may be the watchword of this new economy. Fixing the broken healthcare supply chain, then, requires more than just identifying and plastering over the cracks in the global healthcare supply chain system—it requires a shift in the very principles and practices that undergird healthcare supply chain management.  This may require shifting from a corporate ethos to an ethos of care, one which stresses the bond between the healthcare supply chain and the health system. It may require shifting from an “economy of profit” to an “economy of needs,” or a mode of economic organisation that does not ask “how is the most profit to be generated?” but rather “what is it that the human person at the end of the healthcare supply chain needs?” An ethos of care would entail a service-oriented vision of healthcare supply chain management, one in which the wellbeing—the needs—of the person at the end of the healthcare supply chain becomes the priority of healthcare supply chain management. Perhaps it is just such a shift from a corporate ethos to an ethos of care, from an economy of profit to an economy of needs, that can help to fix—not temporarily but lastingly—the broken healthcare supply chain.

On Tuesday March 15th at 8:30pm ET we will be discussing the following topics on #HCLDR:

  • T1 During the COVID pandemic, we saw how the healthcare supply chain impacts hospital staff, patients, teachers, truck drivers, and everyday citizens (ie: lack of PPE, reliance on other countries for vaccines). Were you impacted? How were those around you impacted (ie: your local hospital, your workplace)?
  • T2 Manufacturing and sourcing from local suppliers would mitigate future supply chain shortages BUT those supplies could cost more which runs counter to the drive to reduce health costs. Where is the balance point?
  • T3 What healthcare supply chain successes did you see during the pandemic?
  • T4 What can governments, hospital leaders, business leaders, and individuals do to regarding the healthcare supply chain since it has such an impact on public health and everyday life?

About the Authors

Anne Snowdon, PhD @DrAnneSnowdonRN

Anne Snowdon, PhD, is the Vice Chair of the Board of Directors for Alberta Innovates, a member for the Health Futures Council at Arizona State University and the Director of Clinical Research at HIMSS Analytics. She holds Adjunct Faculty positions at the Faculty of Health Sciences, University of Southern Denmark; the Department of Computer Science at the University of Windsor; the School of Nursing at Dalhousie University; and the School of Nursing at Swinburne University in Melbourne, Australia. Dr. Snowdon has published more than 140 research articles, papers and cases, and has received over $22 million in funding.

Nancy Pakieser @Pakieser

Nancy Pakieser, is the Digital Health Strategist, CISOM & Supply Chain at HIMSS Analytics. In this role, she has the responsibility for supporting the forward movement of the digital health transformation of healthcare systems using the Clinically Integrated Supply Outcomes Model (CISOM).

Additional Reading

Healthcare Management Forum, March 2022, Supply Chain Issues (Open Access)

CCHL event listing (with participation instructions): Forum Tweetchat – How to fix the broken supply chain?

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