Future of Health Care: How supply chain challenges are impacting the top issues facing CEOs in 2022

This content is provided by Interstate Moving | Relocation | Logistics.

A ‘new normal’ is taking shape as we approach the two-year anniversary of the start of the COVID-19 pandemic here in the United States.

CEOs of companies in the healthcare sector believe our ‘new normal’ includes learning to live with both the highly transmissible COVID-19 virus and continued volatility in our supply chain. In recent days, the World Health Organization reported that researchers in several countries had identified a potential new variant of the virus that causes COVID-19, made from the genes of the Delta and Omicron variants. And, in an effort to mitigate risk and disruption from an already stressed supply chain, hospitals and health care facilities are now transitioning from a just-in-time (JIT) purchasing model to a more resilient “just-in-case” approach.

It’s widely expected in 2022 that COVID-19 and supply chain disruptions will continue to stretch hospitals and their staffs thin, even as increasing numbers of CEOs look to transform their hospitals and health care facilities into more resilient health care delivery systems capable of withstanding future public health crises.

An American College of Healthcare Executives’ annual survey of top issues confronting hospitals in 2021 cited the following top 3 challenges among the 310 CEOs who were surveyed:

  • Personnel shortages (e.g., registered nurses, technicians, physicians, etc.)
  • Financial challenges (e.g., increasing costs for staff and supplies, etc.)
  • Patient safety and quality (e.g.. engaging physicians in improving the culture of quality/safety)

Throughout the pandemic, health care delivery systems faced major issues with their supply chains, from a scarcity of N95 and surgical masks, exam gloves, isolation gowns and ventilators at the start of the pandemic to a shortage of durable medical equipment, beds, exam tables and other exam room items that now have extended lead times.

Weighing heavily on the minds of hospital CEOs is the impact these issues are having on each of the top 3 challenges they’ve identified for 2022:

  • Personnel shortages – Severe shortages of personal protective equipment (PPE) forced health care workers to reuse gowns, gloves and N95 masks several times, even though this equipment was designed for single use. The toll of having to reuse equipment that was less than clean during a global pandemic added an additional layer of stress and anxiety to what were already stressful jobs, and contributed to employee burnout and the subsequent departure of experienced health care workers during the pandemic.
  • Financial challenges – In the years leading up to the pandemic, the trend toward leaner, just-in-time inventories provided hospitals and health care facilities with enough supplies on hand to meet their immediate needs and an effective way to manage their supply chain costs, through lower carrying cost and the reduction or elimination of waste from obsolete or expired stock. Additionally, the pandemic-induced increase in global demand for PPE and other medical supplies created an imbalance in the supply chain and drove up the price of raw materials and the cost of finished goods. These additional costs, along with the additional costs incurred to acquire these supplies, cascaded to health care providers and added to existing margin pressures during the pandemic.
  • Patient safety and quality – Global supply chain disruptions resulting from COVID-related manufacturing disruptions in overseas countries, the backlog of cargo ships waiting to be unloaded on the West Coast and the nationwide shortage of truck drivers lengthened the normal time to source some supplies by as much as three times the normal delivery interval and put an enormous strain on the health care system, threatening to adversely impact patient care, safety and quality.

Hospitals and health systems are experiencing a shift in operations as the health care sector moves toward a more resilient post-pandemic posture. In this example cited by the American Hospital Association, hospitals and health care facilities are doubling their on-hand quantities of isolation gowns and exam gloves, and have increased their supply of N95 respirator masks by ten-fold, bringing the average supply on hand up from the pre-pandemic 23-day supply to 200 days.  Just-in-time and lean inventory management strategies are being reevaluated to better predict and prepare for daily operations and demand surges. And, finally, health systems are partnering with third-party logistics providers to outsource elements of their distribution, warehousing and last-mile delivery services in an effort to mitigate supply chain risk and disruption in the event of a future public health crisis.

CEOs of companies in the health care sector will undoubtedly consider and apply the lessons of the past two years as they look to transform their hospitals and health care facilities into more resilient health care delivery systems capable of withstanding future public health crises.

Contact Angela Minturn at Interstate Moving | Relocation | Logistics on 703.226.3221 or at Angela.Minturn@invan.com to find out how Interstate’s supply chain management solutions can make your health care delivery system more resilient. Or visit our website at www.MoveInterstate.com/Healthcare.

Duane Bailey is senior director of marketing and business development at Interstate Moving / Relocation / Logistics and Angela Minturn is business development manager, healthcare and logistics, at Interstate Moving / Relocation / Logistics.

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