Health Care: A Supply Chain That’s Breaking All the Rules

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supply chain in health care

Photo credit: Depositphotos

By Jo Kline, J.D.

Most health care consumers weren’t familiar with the term “supply chain economics” until very recently. Now it has a name, and the nexus between grocery shelves emptied of toilet paper and offshore cargo ships filled with holiday gifts is recognizable. Meanwhile, an element of the U.S. economy more essential to our well-being than any consumer good is showing symptoms of its own supply/demand crisis, destined to reach far beyond COVID-19’s aftermath. It is the first wave of a wholly predictable perfect storm of health care.

Health care’s supply chain management is limited to the movement of goods, such as medical devices, surgical tools and drugs. However, health care is still subject to the rules of supply and demand, with a few twists: end-user prices can’t fluctuate with demand due to existing payer contracts, and the “raw material” of health care services has legs. Health care’s key resource can retire, transfer, choose higher paying alternatives and change careers. 

In fact, the number of health care workers is down 460,000 since February 2020, an estimated 30 percent of prepandemic employees are no longer in health care and nearly a third have considered leaving. The current worker shortages aren’t the first among nurses and direct care workers, but patient care proceeded with little visible disruption in the past. This time, stories of delayed surgeries, patients stranded in emergency departments and long wait times for specialists are making their way into mainstream media. It’s obvious the past 20 months have led many to adjust their career paths, but these shortages are more than simply a lingering symptom of COVID-19.

This is not just about the darn Boomers, although no one should feign surprise when an Elder Boom arrives 70 years after a Baby Boom. Yes, the number of those aged 65 and older will increase 17 million by 2030, and every fifth person you come across will be a senior, but that is only one element of this storm. We also have a growing prevalence of chronic illness in every age group. Nearly half of all adults have two or more chronic conditions, Millennials are not as healthy as Gen Xers were, and 25 percent of children are now chronically ill. More health care frequent fliers. All that rising utilization explains why the Bureau of Labor Statistics projects 2.6 million additional health care jobs by 2030. Finally, we cannot ignore that health care professionals are aging as well. One-third to one-half of today’s workers will reach retirement over the next eight to ten years—not counting early departures prompted by burnout.

Consequently, researchers project shortfalls of 121,000 physicians and 510,000 nurses by 2030, and prognoses for direct care workers are similarly dire. Consider that these forecasts don’t pretend to address present unmet needs in physical, mental health and dental care. Also not factored in is the ultimate impact of COVID-19, as illustrated by a 2021 study showing 58% of physicians think they’ll switch to a nonclinical career within three years. We can only hope that’s their pandemic stress talking. 

As just two examples of how policy makers are prepping for this storm, in December 2020, Congress finally lifted a 24-year freeze on CMS-funded residencies, approving a mere 1,000 additional positions over a five-year period. And the National Health Care Workforce Commission mandated since 2010 to collect data and do what’s needed to meet future workforce demands has yet to hold its first meeting. 

To avert a crisis of access and patient safety in the coming years, it will take rapid systemic changes and innovative efforts throughout every segment of health care:  

  • Health care consumers and their direct care professionals can make the most of available resources by partnering in applying the tools of health literacy. We know informed and shared decision making and effective chronic disease management save time, money and lives.
  • The issues of retention and recruitment can both be tackled by stakeholders taking provider burnout seriously. We need changes now to boost staffing, make telehealth coverage permanent, design provider-friendly EHRs, adopt standard patient identifiers to reduce errors and pressure policy makers to support care team-centered reimbursement models.
  • Dependency ratios are going up and caregiver support ratios are coming down. Communities and micro-communities will be called on to take an active role in providing health care and personal aid to foster independence and reduce skilled care needs. That might take the form of community subsidized recruitment, congregate meals, caregiving, patient advocacy, telehealth support or hospice. But they’ll need actionable guidance and financial backing from their public health leaders.
  • Policy makers, lawmakers and bureaucrats are in a unique position to gather data invaluable in making functional and reliable projections; support stakeholders and communities in making health care accessible; recruit and retain an adequate workforce; and make EHRs interoperable, secure and accurate—with input from frontline users. Now is the time for them to lead or get out of the way.

Despite the inevitable demographic realities we face, a mission of equitable and safe health care can still be realized if all players acknowledge and plan for what’s inevitably on its way. Without question, that’s a full agenda, but the alternative is unacceptable. 

Jo Kline is an attorney and a tireless advocate for patients and innovations that improve health care access and safety. She is also a Baby Boomer. Her most recent book is Patient or Pawn?: Epic fails in health care, the approaching perfect storm and strategies for self-preservation. You can follow Jo’s insights on the approaching perfect storm of health care at www.JoKline.net.