Last Call- The Healthcare Supply Chain Vulnerability

Salado, Texas. During the financial crisis of 2008, the federal government printed money to stabilize our economy. In a future large-scale disaster or catastrophic event, no amount of money will purchase critical medical supplies and pharmaceuticals that do not exist. When a sudden very large spike in demand for medical materials occurs, we will either have the lifesaving medicines and support therapies or we will not.

A recent survey from the American Hospital Association reveals very disturbing details on the number of drug shortages at hospitals all across America. Folks, these are the best of times and yet this is the reality. Imagine our plight in a large scale disaster when the demand for lifesaving medicines will be huge.  I applaud the AHA for this report and I hope most earnestly that American healthcare leaders take this wake up call. 

 http://www.aha.org/aha/content/2011/pdf/drugshortagesurvey.pdf

Any large-scale public health emergency, natural disaster or terrorist attack will cause a sudden and profound spike in demand for both pharmaceuticals and medical surgical products. A very lean supply chain is remarkably easy to deplete if the demand is both sudden and very large. This could result in massive curtailments in healthcare operations across America and could threaten America’s entire healthcare industry.

The relatively modest surges in medical product demand during the 2009-2010 H1N1 flu season put many if not most healthcare organizations on “Allocation.” Just imagine what would occur if we face a large-scale, material intensive disaster.

HHS and CDC have not used plain language on what categories and quantities of federal supplies would and would not be available to healthcare organizations during disasters. http://www.cdc.gov/phpr/stockpile.htm#sns7  

I’m sad to say that the language outlining the Strategic National Stockpile lends itself to a totally unwarranted sense that the federal government will back up hospitals, medical centers, surgical centers and outpatient clinics during disasters. This vague and carefully crafted language is unwise at best and may be catastrophic in the worst cases. The young, old and those with chronic illnesses will suffer the most. We should do the right thing and we should do it right now! The Federal Government should clearly state which categories of supplies, equipment and pharmaceuticals will and not be available to healthcare organizations and when and for how long healthcare organizations can count on Federal support.

The Defense Logistics Agency (DLA) medical materiel depots have been effectively closed since 1992 and that safety net is gone.  

I am profoundly concerned about the plight of all Americans during disasters, but especially those whose lives depend most on medication and support therapies.  Many Americans can live through a persistent lack of medicines, but many lives depend on it.

Since 1999 I have advocated Federal planners purchase large quantities of critical pharmaceuticals and medical supplies and pay national distributors to manage the Federal Reserve Inventories and stock rotate the material in storage. During times of crisis, federal stocks could be quickly released and immediately flow seamlessly into the Health Care Industry’s supply chain.

This simple preparatory step can sustain medical operations, save lives and prevent untold human suffering.  A modest national investment in Federal Reserve Inventories in advance of a catastrophic event may also obviate the need to rebuild the Healthcare Industry requiring appalling sums of money and time many Americans simply won’t have.

It is very late morning in America and I hope healthcare leaders will answer this very sincere wake up call. There is no snooze button.

Healthcare Material Managers and Healthcare Reform

Many Materials Managers are already recognized by their healthcare organizations as true subject matter experts in virtually every support area of the healthcare organization. I have to say that the future for Materials Managers is extremely bright. I do hope the title will change to Healthcare Logistics Manager to reflect the actual function more realistically.

The Materials Manager will be a critical leader as we move toward healthcare reform, no matter which form healthcare reform takes. I think the Air Force experience with Healthcare Logisticians will be replicated in the Private Sector sooner rather than later. Materials Managers will provide the expertise needed to measure all healthcare costs and serve as the leader in implementing major cost containment efforts. Many healthcare organizations may not survive in the future, but those organizations with the desire to survive reimbursement reductions and continuing service to their Communities, the Materials Manager's experience will be invaluable.

The Air Force started moving Healthcare Logisticians into Commander (CEO) positions in the 1970s. The Air Force Surgeon General’s Office was amazed at how well we did as CEOs. We had an inside joke that we were naturals for the job. We never had the staffing levels we were authorized; we dealt with Defense Department medical depots as our Prime Vendor and dealt with 30-45 days order-ship dates. We also had to work with the Base Finance Office, Procurement Directorate, Information Systems Office and the Non-Medical Supply Officer (Base Supply) to get the supplies, equipment and services for our hospital or medical center. The feeling was if we could jump all those hurdles and accomplish “additional duties” such as Director, Environmental Services, Linen & Laundry, Central Supply, Plant Operations, Biomedical Equipment Management and serve as the United Way project officer, how hard could the CEO job really be?

I know that the future for the Materials Management career field is very bright indeed. It’s only a matter of time until Corporate Offices recognize what most of us are already doing and move us into the C-Suite. After all, the Air Force did that over 35 years ago.