Innovative Companies Mend Coronavirus-Disrupted Supply Chain for Rural Hospitals

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By Jon Pruitt   

Since the coronavirus pandemic reached the country’s shores and rapidly spread inward, the nation’s smaller hospitals have struggled with a global supply chain strained by a once-in-a-century public health crisis. 

But, thankfully, American ingenuity has been hard at work. Both large and small companies have found innovative ways to help rural hospitals faced with dwindling personal protection equipment (PPE) desperately needed to treat patients infected with the virus and other acute illnesses.

Companies stepped in just in time to assist smaller hospitals struggling with the pandemic.  They have played a pivotal role in providing hospitals with surgical gowns, face masks and other PPE that have been in achingly short supply amid surging demand for these products in the U.S. and elsewhere. 

COVID-19 Outbreak Overwhelms PPE Supply

 Prior to the outbreak, these hospitals had ample supplies of PPE acquired through supply chain providers like Plano, Texas-based CHC Supply Trust, which has been working around-the-clock supplying PPEs for its nationwide network of rural and community hospitals. CHC Supply Trust partners with HealthTrust, a leading national GPO, to grant hospitals of all sizes access to preferred pricing on clinician-recommended products and services.

But as the virus spread globally, demand for medical products outpaced supply and triggered a rush for increasingly scarce supplies.   

The stressed supply chain is largely blamed on the U.S. sourcing much of its manufacturing of healthcare products to foreign countries like China, which for years has produced a large portion of the PPE, medical devices and pharmaceutical drugs for the U.S.  

   Amid the pandemic, starting in late 2019, Chinese factories halted or sharply curtailed production of these goods in order to comply with a government-ordered shutdown, resulting in the collapse of a global supply chain that was already in fragile condition.  According to an Institute for Supply Management report on the COVID-19 outbreak released in March, Chinese manufacturers were operating at 50 percent capacity with less than half of normal staffing.

 Despite the Chinese government eventually lifting lockdown restrictions, the supply chain was still hampered by production lines running way behind schedule, as well as long delays in shipping supplies overseas, among other obstacles.    

PPE intermediaries exploiting the health crisis also contributed to the shortage by hoarding supplies and selling them significantly above market value to the highest bidders. That made it quite difficult, if not impossible, for suppliers of smaller hospitals to compete in the bidding process to pay grossly inflated prices for PPEs – one of hospitals’ largest cost categories. Those sky-high PPE prices would certainly have wreaked havoc on community hospital budgets.

Even if they had the financial resources, many hospitals couldn’t get their hands on PPEs because they were sold before their suppliers had an opportunity to bid for them. 

The supply crunch also has been exacerbated by suppliers wary of purchasing PPEs from unfamiliar or unscrupulous sources demanding advance payments –up to 100 percent in some cases– as well as higher volumes of PPEs sent to areas hit hardest by the virus. 

Those challenges have been especially difficult and frustrating for smaller hospitals, leaving them scrambling to find other channels for critical patient care supplies.  Fortunately, a number of them have found solutions because of innovative companies working in partnership with group purchasing organizations, such as CHC Supply Trust. 

A Chocolate Maker Rescues PPE-Depleted Hospitals  

To help smaller hospitals receive badly needed PPEs, a growing number of companies have converted their manufacturing process to produce PPEs. One of those was the Sweet Shop & Waymaker Face Shields Company in Mt. Pleasant, Texas. The chocolate-maker shifted operations to produce medical face shields for healthcare workers. 

The firm is the country’s largest maker of handmade chocolates and supplies thousands of retailers nationwide. After company leadership learned of the PPE shortage, they quickly converted its assembly line to make plastic face shields, in order to avert the impact of a significant business loss and to help hospitals in their frantic search for PPE.    

With a pressing need for PPE, Titus Regional Medical Center, a 170-plus bed hospital, turned to CHC Supply Trust for help. Through the CHC Supply Trust team’s innovative sourcing for its members, the hospital was able to purchase about 10,000 Sweet Shop & Waymaker face shields deemed the quality they are accustomed to receiving through traditional channels.

 The factory’s owner also flew his plane to pick up surgical and respirator masks from a Wisconsin company for Titus Regional Medical Center.  And unlike other PPE providers demanding upfront payments, the company gave the hospital 30 days to pay for shields.  

The company, which dedicated about a quarter of its 80,000-square-foot facility for producing face shields, presold nearly 300,000 face shields within only a few days to hospitals across the country clamoring for protective equipment.  The factory can produce up to 40,000 shields daily. 

Other companies that displayed inventiveness and generosity during the pandemic included: 

  • A Fairfield, Texas, distillery produced hand sanitizers for a small Midwestern hospital.   
  • Ford Motor Co. donated more than one million face shields to hospitals in designated virus hot zones, and it may soon provide hospitals with reusable isolation gowns made from automobile airbags.      
  • Staples, which only sold its hand sanitizers, face masks and other health products to healthcare providers, sent N95 respirator masks to a Beaumont, Texas, hospital and hand germicidal wipes to another hospital in Franklin, La.

Taking Steps to Prepare For Future Supply Shortages 

The virus-induced supply shortage signaled a wake-up call for the healthcare community. We learned very quickly what can happen when disease as relentless as COVID-19 swiftly spreads through communities.  While the virus has peaked in many U.S. cities and towns, hard-hit rural and community hospitals are now bracing for short- and long-term impact. In the near term, escalating supply prices are squeezing already tight operating margins, and longer-term, hospitals must prepare for possible future outbreaks of a similar magnitude.

To help avoid future supply woes, CHC Supply Trust and its network of hospitals are in the midst of planning various strategies aimed at avoiding further supply-chain disruptions. They include increasing on-site supply inventory, purchasing more reusable gowns, expanding their vendor network to find more domestic sources for supplies, and taking other precautionary measures. The HealthTrust GPO also has been regularly assessing hospitals’ supply needs to prioritize supply needs and stay ahead of other potential shortages.  

The coronavirus pandemic has severely tested the strength and endurance of the nation’s healthcare system to a point that no one thought was possible. The outbreak’s impact on the system’s supply chain exacted a heavy toll on hospitals in rural and remote areas. But it’s safe to say that the virus’s impact on the hospitals, their staff, and their patients was noticeably lessened due to the out-of-the-box thinking, generosity and sheer perseverance of companies and individuals boldly rising to the occasion in this unprecedented health crisis.        

Jon Pruitt is a Senior Vice President at CHC Supply Trust.

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