Managing purchasing during and after COVID-19

Pandemic-induced supply chain snarls have impacted hospitals as much if not more than many sectors. HBI talked to Community Hospital of the Monterey Peninsula’s Jeff Bautista about procurement strategies that institution has used to reduce disruptions.

The pandemic has had a widespread impact on supply chain operations throughout the healthcare industry. For example, in April 2020, the GPO Premier surveyed its members and reported “active cases of COVID-19 create surge demand of 17X the typical burn rate for N95 respirators, 8.6X for face shields, 6X for swabs, 5X for isolation gowns, and 3.3X for surgical masks” (click here). As of July 20, 2020, the American Society of Health-System Pharmacists reported that there were more than 200 drug shortages in the country (click here).

Considering these significant impacts of COVID-19 on supply chain functions, HBI spoke to Jeff Bautista, the assistant director of supply chain services at the Community Hospital of the Monterey Peninsula, a 288-bed hospital in California. While CHOMP has seen fewer than 100 COVID-19 cases, it has been impacted by supply disruption. Bautista told HBI about procurement strategies that organizations can adopt during and after COVID-19, such as reevaluating their purchase decisions by building up essential inventory for daily needs, vetting nontraditional vendors for quality PPE and other medical supplies, and using analytics to track and manage inventory levels.


Building inventory

To cope with natural disasters and pandemics, CHOMP had been keeping an emergency inventory—some PPE and primary supplies that did not have expiration dates—even before COVID-19. The emergency inventory was stored in its warehouse and rotated out every year. When COVID-19 was declared a pandemic, the supply chain verified how much emergency stock was on hand to supplement supplies like PPE in case of a shortage. CHOMP conducted a timeline study within each department to track and manage daily PPE levels and source alternatives when needed. The organization also instituted a C-suite level task force to evaluate the ongoing pandemic and make top-down management decisions regarding CHOMP’s COVID-19 management.

“The task force was formed to make sure our hospital was the safest it could be and that we were totally supplied for however long the pandemic will last,” Bautista said. “We wanted to have a continuous flow of supplies and staff that would be available not only to our hospital, but to our community.”

In April 2020, the Centers for Disease Control and Prevention released guidelines and strategies on navigating potential PPE shortages and conserving PPE for organizations dealing with surge capacity (click here for more information). Current CDC guidance allows for respirator extended use and reuse. Under extended use, clinicians are permitted to wear a single respirator for repeated patient contact without removal between encounters. Respirator reuse allows for a single respirator to be used several separate times, with removal in between, before being discarded. Further guidance suggests expired masks can be preserved for fit testing or training purposes, during which clinicians would not be exposed to dangerous pathogens. All methods allow for N95 stock conservation (click here for more information). By following the CDC recommendations, CHOMP could keep the respirators on for longer periods of time and was able to build an inventory of N95 masks for daily usage.


Effective vendor management

Due to COVID-19 and related back orders, the number of nontraditional vendors offering PPE and other medical supplies have been increasing. To obtain quality products from nontraditional vendors, hospitals should be able to recognize scam offers and adopt effective measures to vet the vendors. In April 2020, Premier surveyed its members and found that 60% of providers received fraudulent offers for PPE and medical supplies (click here). To identify counterfeit PPE goods and medical supplies, hospitals can ask for samples before making the final payment, or rely on their GPOs to investigate new vendors to ensure that products meet OSHA or NIOSH standards.

Some strategies in vetting new vendors include validating supplies through a provider’s internal infection and clinical team members, as well as federal agencies. To prevent fraudulent purchases, CHOMP established measures to sanction its nontraditional vendors by requiring them to submit FDA approvals. To verify product quality, the supply chain also requests product samples from new vendors to be reviewed by infection and clinical management teams.


“The one thing that I tried to avoid is to purchase products from multiple vendors,” Bautista said. “We carefully identified and sanctioned our key vendors that could make commitments after validation and supply our product requirement.”


Using analytics for inventory reporting

Tracking and reporting inventory needs is critical for hospitals to keep their supply chain operations in check. CHOMP has reinforced its enterprise system, Lawson, in order to build an inventory performance category and evaluate product availability numbers. Timely updates on product usage and availability can help organizations manage inventory needs and reduce supply disruptions. CHOMP uses Lawson to record all the products that are being purchased, inventory delivered, and vendor information. The organization utilizes Lawson to break down every category of product usage to the report level, so that supply chain leaders can plan for supply impacts and devise alternative sourcing options.

“Even after COVID-19, I anticipate that these analytics will offer more insights on what we need to do to intensify our efforts for any future healthcare scare like this”, Bautista said.

Additionally, hospitals can use analytics to revamp their inventory models. In a pandemic like COVID-19, which impacted the global supply chain, a just-in-time inventory model has the potential to set back health systems’ inventories for a considerable period of time. Using analytics, supply chain leaders can create daily inventory reports and stock up essential medical supplies to meet demand.

Interested in learning more about this topic? Contact the team at Clarivate Healthcare Business Insights today.