Robert M. Orfaly, MD, MBA, FAAOS
Published 12/18/2024
|
Robert M. Orfaly, MD, MBA, FAAOS
Nearly 5 years since our introduction to a novel coronavirus that changed the world forever, many corners of the country, including mine, are still grappling with workforce shortages that limit access to the OR for us and our patients. Adding insult to injury, restrictions recently tightened considerably due to a different and much more mundane-sounding shortage: saline. What can be done to protect the supply of drugs and equipment critical for providing patient care?
On Sept. 29, Hurricane Helene plowed through the Southeast and caused significant damage to many homes and businesses. Among them was Baxter’s North Cove manufacturing facility. Baxter is the largest producer of IV fluids in the United States, and 60 percent of its production, or 1.5 million bags per year, is manufactured at the North Cove plant. Even prior to the hurricane, the FDA considered several IV fluid products to be in shortage. The immediate aftermath of the natural disaster was that every nonemergent surgical case or treatment requiring IV fluids was canceled in many medical facilities, with careful monitoring of supplies and adjustments of schedules 2 months later.
Once upon a time, I would have considered this to be the healthcare equivalent of a hundred-year-flood, never to be seen again in our lifetimes. Of course, back in 2017, the supply of IV bags was acutely affected when Hurricane Maria cut power and damaged three Baxter plants in Puerto Rico. The COVID-19 pandemic introduced the world to the fact that China accounted for 50 percent of global production of facemasks. The extreme surge in utilization, combined with decreased production and distribution as a result of shutdowns and widespread illness, led to the depletion of strategic reserves within months and a worldwide shortage. Roughly 1 year later, a cargo ship ran aground, blocking passage through the Suez Canal. Fortunately, the ship was refloated in less than 1 week, but access to personal protective equipment, vaccines, and other critical medical supplies was at risk due to that single interruption.
Supply-chain disruptions and shortages now seem almost commonplace. The American Medical Association has gone so far as to declare drug shortages to be a public health and national security threat. The first steps in improving the resilience of our healthcare supply chain against these shortages are probably to acknowledge the lack of easy answers and to avoid laser-focused finger pointing at one player. It also involves recognition of the inevitable trade-offs between competing interests, such as maintenance of stockpiles of critical products and cost efficiencies of a “just-in-time” supply chain.
As patients and insurance companies demand greater cost efficiencies in healthcare, margins tighten for everyone—from the individual physician to the multinational pharmaceutical company. Suppliers benefit from new products under patent protection with generally greater margins. However, such products are becoming increasingly complex, with extensive regulatory requirements specific to each geographical area and market. Manufacturing investments and quality controls can be challenging to maintain. These prerequisites can amplify the trend toward globalization, in which many products we rely on are shipped from plants very far from our facilities.
Consolidation through mergers and acquisitions seen across the corporate world can have unintended consequences to distribution channels. For more established products such as sterile saline, margins can be harder to maintain, and we have seen shortages of several important classes of medical supplies due, in part, to lack of interest from manufacturers in producing these products. The business decision to concentrate manufacturing in a small number of geographic locations can be driven by the commodity nature of the product in most circumstances, until a natural disaster or other major disruption puts the product’s critical nature on full display. Some manufacturers are considering bypassing distributors entirely in favor of direct shipping or distribution. This arrangement can raise the importance of allocation terms in contracts with each supplier, so facilities know what to expect when production challenges occur.
It is clear from even this brief discussion that few orthopaedic surgeons will be in positions to directly influence the resilience of their medical facility supply chains. However, the impact of disruptions on our patients and practices demands that we pay attention to these issues and participate in discussions whenever possible.
At Oregon Health and Science University, Jamie Harrell, MBA, CHFP, director of business operations and finance for perioperative services, works with his team on a number of processes to protect our ability to provide optimal patient care in the face of supply-chain disruptions. Taking a new approach to value analysis may mean moving away from single sourcing for commodity items to drive the best price available at present. A new focus on achieving the best average price—including when supply chains could be at risk—may mean that contracting with more than one vendor is entertained.
As surgeons, this need for resilience in the face of shortages can sometimes lead to being flexible with substitutions to our preferred products. Although inventory contraction and “just-in-time” production have become the rules in most corporate supply-chain management, the impact of recent service disruptions has illustrated the obvious ways in which providing healthcare is different than delivering automobiles to a showroom. We will need creative solutions to maintain efficiency at the same time as we protect critical operations from the next mass disruption. Larger health systems may be exploring development of their own distribution companies. Smaller groups need to think creatively about partnerships with other facilities or companies that can provide more supply-chain protection. Partnering with local suppliers can be an economic boost to the region and also lead to closer business relationships and protected allocations when shortages occur.
The government can also play an important role in protecting healthcare from supply shortages. The FDA has been called upon to improve its approval processes for vendors to ensure timely access to essential supplies. It can also improve forecasting of risk and act more expeditiously to proactively approve alternative vendors or methods of dealing with critical shortages.
Finally, we can all assist our healthcare systems in conserving resources. In response to the IV fluid shortages, clinicians quickly transitioned care plans to make greater use of oral hydration or distilled water when sterile water was not required. I now order a saline lock rather than reflexively ordering IV fluids for shorter cases in healthy patients. I do not see any reason to go back to old, more expensive habits even when normal supplies of fluids are restored.
It is likely that we will need the full spectrum of high-tech container-shipment tracking, business analytics, and simple reconsideration of everyday medical practices to improve resilience and maintain our ability to care for our patients. Like any form of emergency planning, discussions and creation of robust contingency plans are needed prior to the next major shortage, while supplies are mundane commodities of our everyday business. This proactive strategy will hopefully mitigate the harm to patients and practices from the next unexpected supply-chain disruption.
Robert M. Orfaly, MD, MBA, FAAOS, is a professor in the Department of Orthopaedics and Rehabilitation at Oregon Health and Science University. He is also the editor-in-chief of AAOS Now and chair of the AAOS Now Editorial Board.