ASHP Policy Position 2118
SUPPLY CHAIN RESILIENCE DURING DISASTERS AND PUBLIC HEALTH EMERGENCIES
Status: Current
To support building an enhanced and resilient hospital and health-system supply chain that is lean and economical during normal operations yet nimble enough to support patient care needs during large surges in demand for pharmaceuticals and medical supplies; further,
To advocate for ongoing federal evaluation of a national hazard vulnerability assessment to determine how pandemics and disasters present risks to healthcare and public health critical infrastructure; further,
To advocate for the development of critical pharmaceutical and medical supply requirement listings based on a national hazard vulnerability assessment to guide the composition of government and distributor-managed emergency stockpiles; further,
To urge Congress and state legislatures to direct medical supply and pharmaceutical distributors to manage both “private sector-owned” medical materiel (just-in-time for normal operations) and government-owned/distributor-managed emergency stockpiles (just-in-case for emergencies) that can flow into the private sector supply chain when release of government-owned materiel during public health emergencies, disasters, or contingencies is authorized.
To advocate for ongoing federal evaluation of a national hazard vulnerability assessment to determine how pandemics and disasters present risks to healthcare and public health critical infrastructure; further,
To advocate for the development of critical pharmaceutical and medical supply requirement listings based on a national hazard vulnerability assessment to guide the composition of government and distributor-managed emergency stockpiles; further,
To urge Congress and state legislatures to direct medical supply and pharmaceutical distributors to manage both “private sector-owned” medical materiel (just-in-time for normal operations) and government-owned/distributor-managed emergency stockpiles (just-in-case for emergencies) that can flow into the private sector supply chain when release of government-owned materiel during public health emergencies, disasters, or contingencies is authorized.
Rationale
Hospitals and health systems experience supply chain challenges for patient care during routine operations, and these challenges can be exacerbated by public health emergencies and disasters. Aspects of the novel coronavirus disease 2019 (COVID-19) pandemic that have required nimbleness in thinking and action are the transformation of organizational governance and the need for speed in decision-making. The COVID-19 pandemic has dramatically changed inventory management and supply chain practices.
Many pre-existing factors contributed to the supply chain crises triggered by COVID-19, including but not limited to overextended supply lines, lean manufacturing, and outsourcing, which have been especially unfavorable for hospitals and health systems running just-in-time (JIT) inventory replenishment. Designed to use capital more efficiently, JIT replenishment relies on highly accurate demand forecasting and tight coordination with suppliers. When there is a sudden increase in demand, from a larger number of buyers trying to purchase the same products at the same time or from the typical number of buyers trying to make larger purchases, the thin supply chains that support JIT inventories can’t respond quickly enough, creating long-term backorders at the local, regional, and national levels. An alternative just-in-case (JIC) inventory strategy would maintain extensive inventories to reduce backorder risks in the face of supply and demand uncertainties, but at the cost of forcing organizations to tie up capital in inventory.
During the COVID-19 pandemic, hospital and health-system governance structures had to quickly pivot to accommodate shifts in unexpected operational, clinical, and financial challenges. Organizations quickly embraced the “new normal” of supply chain management conundrums (e.g., shortages of personal protective equipment and critical drug, minimizing drug waste), controversial drug therapy considerations for pharmacy and therapeutics committees, and provisioning planning for alternate care sites (e.g., field hospitals). To prepare the healthcare system to endure the stresses on critical infrastructure caused by future public health emergencies or disasters, a shift toward a hybrid supply chain model needs serious consideration, to reap the benefits of both models and build resiliency into supply chains. Such a system would use information from a national hazard vulnerability assessment to guide the composition of emergency stockpiles of critical pharmaceuticals and medical supplies and require private-sector distributors of those products to manage the supply chains for those stockpiles when they are released during public health emergencies or disasters in addition to their normal operations.