COVID-19 has forced hospitals to be more careful about their suppliers. Here are some of the lessons learned

Aurora Health
Hospitals have had to scrutinize vendors more heavily since the start of the COVID-19 pandemic, a habit that will likely continue. (Advocate Aurora Health)

In the early days of the COVID-19 pandemic, CommonSpirit Health found itself among the health systems fighting a crush of demand to find enough personal protective equipment for medical staff as traditional vendors were overwhelmed. 

For the 137-hospital system, a team of staffers searching for PPE from other suppliers found itself fielding an explosion of inquiries from companies and individuals claiming to have PPE to sell. Their job quickly turned to finding ways to judge whether the suppliers were legit.

“We had hundreds of emails every week of offers of PPE from industry, private citizens to ‘I know somebody who knows somebody in China,’” said Kathryn Carpenter, vice president of sourcing, contracting and clinical strategy for CommonSpirit.

“A lot of healthcare systems lost a lot of money in pursuit of N-95s in particular,” she said. “We did have a safe process in place and didn’t end up with PPE that couldn’t be used.”

CommonSpirit wasn't alone with this problem of figuring out where to get PPE and ensuring supplies were effective and came at a good price. Six months into the COVID-19 pandemic, some hospital systems say they've gotten a better handle on the PPE supply chain after some tense moments at the onset of the pandemic. As the U.S. heads into another flu season—and experts warn about the renewed potential for surges of COVID-19 and high demand for PPE—they say they've learned some crucial lessons on how to ensure the supply chains for PPE aren't interrupted. 

Vetting suppliers

The first step is to have a plan on how to scrutinize any potential suppliers.

For example, officials at the 92-hospital system Trinity Health put together a framework to do a risk interrogation on any potential suppliers. Using those guidelines, they examine where the raw materials come from for the suppliers, where the products are manufactured and what their distribution network is like, said Ed Hisscock, senior vice president of supply chain for Trinity Health.

The framework also explores the potential risk of a supplier’s location.

“That will be one of the criteria with which we select our suppliers as to make decisions not solely based on the cost and quality of the product, but factor in the inherent risk,” he told Fierce Healthcare.

In all, Trinity’s framework includes 26 criteria from various risk perspectives.

“It runs the gamut from socioeconomic risk from a country the organization is based or where they depend on a country’s transportation,” Hissock said. If they shift through only one or two ports, "that is riskier than having the ability to move through dozens of different ports.”

CommonSpirit also created a way of sifting through those hundreds of inquiries to determine whether they were legitimate suppliers. This included scrutinizing where raw materials for the suppliers are coming from and any geopolitical issues that could cause problems in the future.

"We are concerned about attention to human rights issues and, if we find ourselves in a situation where it appears that human rights are being abused, then that can result in that supply line being discontinued for us," said Dan DeLay, system senior vice president of supply and services resource management for CommonSpirit.

Creating a stockpile

Another key lesson systems took away was how to keep a rolling supply of PPE on hand in case of emergencies. 

CommonSpirit is moving to what it calls a 5-30-60-day approach in which it has five days of PPE on hand at every single one of its facilities measured at peak utilization. 

It has another 30 days of supply at the division level that can be shifted to facilities when they are needed. Finally, it has a 60 day-supply at the national level.

Some states could also require hospitals to maintain inventories. California recently passed a law that requires hospitals, nursing homes, large medical groups and dialysis clinics to have a 45-day supply of PPE. In one year, the state will put together a PPE stockpile.

Trinity Health is also creating pandemic stockpiles across its 22 states. A major concern is to ensure that the products in the stockpile don't expire and go to waste, Hisscock said. 

The system plans to do drills to keep the stock fresh.

"These are low-cost products in general, and so keeping a ton of them in inventory consumed a lot of space but also consumed inventory carrying costs that were difficult to justify," DeLay said. "Well, we can justify the inventory carrying costs now."

Participating in the supply chain

CommonSpirit Health and Trinity aren't the only systems that have pushed for a deeper dive into their suppliers. Since the pandemic, American hospitals and PPE buyers have become more conscious over where they are buying their products, said Chris Garcia, CEO of Health Supply US, a PPE supplier and distributor.

“We’ve seen some innovative sourcing strategies that hospitals have adopted because of the non-availability for traditional prime vendors,” Garcia told Fierce Healthcare. “We’ve benefited as a company through just the hard work and the key rigorous due diligence we have done to ensure the products we source are not just FDA-registered and compliant but are a quality product.”

He said the pandemic has made it clear “not just in the immediate term but also in the long run that we have got to be more self-sufficient as a country; as a nation, we need to be able to produce domestically.”

Some hospital systems have sought to expand their domestic manufacturers of PPE after overseas complications.

CommonSpirit is one of 15 hospital systems in the U.S. that bought a stake in Prestige Ameritech, the largest domestic manufacturer of face masks, back in May.

DeLay cautioned that the industry shouldn’t expect PPE manufacturing to move completely out of China.

“The difference in price of labor and materials is gargantuan, and given the capitalist society that we live in, we don’t think that is likely to happen in a large way moving forward,” he said.