Healthcare supply chain needs a re-think, observers say
November 1, 2022
Product shortages and disruptions during the COVID pandemic have highlighted the dire need for Canada’s healthcare system to collaborate more effectively when it comes to procurement and the supply chain. What’s required is a task force consisting of private-sector suppliers, hospitals and other providers, and governments to share information and smooth the flow of shipments when supply disruptions occur.
Moreover, healthcare providers need to invest much more in informatics and data analytics to be able to track supplies across provinces and to predict the availability of products on a local and worldwide scale.
These were two of the key recommendations of high-level healthcare executives at a recent conference on the state of the supply chain in healthcare, given by Supply Chain Management Association Ontario (SCMAO) in September.
“Data is key, but it will only be useful if we can share the data as a country,” said Kendra Frey, VP of Materials Management at HealthPro Canada. “If healthcare providers only work with their own suppliers, we’ll be spinning our wheels.”
Frey said a committee or task force made up of stakeholders across the board is needed to coordinate demand and supply throughout the healthcare system.
And to do this effectively, data sharing and trust will be needed among the players. “We know it’s not going to work without sharing the information that we have.” She said that by collaborating with each other, healthcare providers and product suppliers can demonstrate what’s available and when shortages occur, they can discuss what substitutions can be made.
She noted that at the start of the pandemic, a task force of this kind was organized for the drug industry by Health Canada, with great success. This could serve as a model for the healthcare-product supply chain, she said. Everything from diagnostic imaging to personal protective equipment (PPE) would be included.
Frey asserted that national planning of this sort would help with stockpiles, too, so that shortages would be reduced the next time a pandemic occurs.
However, she said that governments and the public should be ready and willing to accept that there will be waste – products expire over time and new stock must be purchased and stockpiled.
Greg Chow, VP of Finance at Women’s College Hospital, in Toronto, observed that shortages and disruptions in the healthcare system are far from over. He said hospitals continue to operate at over-capacity and are severely rattled when they can’t get the products they need.
(At Women’s College) “we’re running at a level where there isn’t any excess capacity,” he said. “It’s going to be difficult to address a further spike in demand.”
He noted the hospital has already been adversely affected by recent shortages of contrast media for diagnostic imaging exams and by difficulties in obtaining epidural catheters and tubing for pain management.
What would happen, he asked, if the hospital needed to flex up to 120 percent of capacity? It might face shortages in other areas, as well.
Scott MacNair, EVP of Business Operations at the Provincial Health Services Authority in British Columbia, noted that the hospital supply chain in BC is much more centralized than in other provinces like Ontario. Nevertheless, BC has been experiencing its share of problems.
MacNair said that before the pandemic, “we’d deal with 100 (supply chain) disruptions a month. In the last 18 months, that’s climbed to 250 a month.”
What really needs upgrading in BC is the informatics infrastructure, he said, as the lack of good computer software is impeding the collection, analysis and sharing of data.
Some parts of the supply chain system in BC are still working on Excel spreadsheets, he said. “We shouldn’t be doing that,” he asserted. “We’re very archaic.”
He observed that Alberta has invested in analytics “and has done a fabulous job on tracking and tracing inventory.”
Mark Walton, SVP with Ontario Health, agreed that “we have poor supply-chain data,” especially in areas like DI and surgery that are flashpoints for the public.
Moreover, he said that additional pressure on the system is coming. “There’s latent illness (in the public) that’s out there and hasn’t yet been diagnosed. We expect to see a huge bolus coming.”
This will put tremendous strain on healthcare providers and may also use up the available supplies of medical products.
Walton said Ontario hospitals have already been running at 110 percent to 120 percent of their surgical volumes. Awareness of supply chain issues has grown enormously during the pandemic, he said, with a greater sensitivity to international issues.
“We’ve become acutely aware of our vulnerabilities. We’ve come to see that a change in China will have an impact on Canada.”
“We have to gain a better understanding of who our external suppliers are,” he said.
Walton agreed with his colleagues on the panel that the healthcare system suffers from a shortage of data about supply chain issues, and that more work should be put into building the relationships and resources needed to obtain and analyze critical information.
“We really don’t have baseline data, and there’s no single source of truth,” he said. “Finding the data can be a challenge in itself.”
Walton said the capacity for hospitals to collaborate with each other was proven during the early days of the pandemic, when they shared information and transferred patients to each other’s facilities – even out of province.
Sharing data among private-sector suppliers, and with hospitals and governments, may be more difficult, he said, as private companies have little incentive to do this and may fear they have much to lose. “They’re reluctant to share information about their volumes and prices,” said Walton.
That and more may need to be done, however, to avert another supply chain crisis if and when another pandemic strikes.
“We need to make sure this isn’t another SARS that comes and goes, where we don’t learn anything from it,” said Walton.
The panellists agreed that shortages also extend to human resources, and that a centralized task force could help alleviate these scarcities.
Greg Chow, of Women’s College Hospital, said that when it comes to human resources, “there’s cannibalization going on,” explaining that to fill gaps, providers are often poaching nurses and other staff members from each other – leaving new gaps in the system.
“If we all collaborated, we could (jointly, and more powerfully) create asks for government and policy makers,” said Chow. He said the system needs more education programs and the fast-tracking of foreign credentials to fill HR vacancies – a nagging problem in the healthcare sector.
Session moderator Angela Ma, Health Partner with PwC Canada, noted that hospital supply chains, traditionally have been crafted to run as “lean” as possible. However, when a crisis like a pandemic occurs, they’re unable to accommodate the surge in demand for medical products. How could they be made more effective, she asked.
Chow answered that there must be a re-thinking of this approach. To plan for the future, governments and policy makers must realize that “challenges will cost”, he said.
“We’ll need to have ‘risk premium’ to invest in ourselves,” said Chow.