The COVID-19 pandemic has sparked some drastic healthcare evolution almost overnight. The fast and overwhelming embrace of a previously resisted technical innovation like telemedicine is a case in point.
Before the crisis, the administrative space in healthcare was more apt to undergo systems innovation vs. clinical innovation. This was largely because it wasn’t hamstrung by the underpinning complexity of clinical research, so administration improvement seemed more suitable for low-risk, high-reward experimentation and rapid evolution.
Yet the current crisis has shown that what seems like state-of-the-art improvement is not always sustainable on its own. Supply chain management is a prime example, and one that Health2047 ecosystem partner and 793-bed health system Lafayette General Health (LGH) in Louisiana saw stressed as the pandemic unfolded.
Supply chain issues are impacting multiple industries due to COVID-19 and the resulting economic turmoil. Yet, it represents a particularly problematic situation in healthcare, one that extends beyond margin impact. If the new Air Jordan release from Nike delays a few months, people are not at risk of illness or death; if a system insufficient personal protective equipment (PPE) availability due to fragility in its supply chain, essential workforce personnel can be exposed to grave consequences on a daily basis.
The healthcare administration innovations of the last two decades have tilted toward cost-savings breakthroughs borrowed from streamlining measures observed in other industries. GPOs centralized and globalized purchasing to increase profitability. This returned enormous efficiencies, but the developing view coming out of the coronavirus crisis suggests that—while still fiscally attractive—100% reliance on such long and lean supply chains can prove highly problematic and dangerous. By the way, 100% reliance on any supply chain is something many other companies have been reviewing both pre- and post-pandemic, as exemplified in Apple and it’s management of Chinese supply chain risks.
When LGH’s “modernized” supply chain suddenly disappeared, problem solving efforts on the ground involved teaming with local industry for masks (rice bag manufacturers), hand sanitizer (oil refineries), and other unlikely collaborators to build a robust secondary supply chain. LGH performed some impressive feats of overnight adaptive evolution to meet their needs in crisis; they’re innovative. Their new state of operations will have more resilience than before and ultimately save lives.
This imperative to build greater resiliency into healthcare supply across the board so that no system gets “fooled twice” on this issue is more clear now than ever. There are some learnings to be had from LGH in establishing a robust localized arm of healthcare infrastructure between the companies in its community. (Such efforts are doubly beneficial for the region they serve, as some of these new partners would have seen their businesses contract or even dry up otherwise.)
The bottom line is—given their unique needs—healthcare systems cannot operate in the future on a non-redundant supply chain. LGH uncovered untapped opportunities to adapt and enhance its resiliency, even mid-crisis, to ensure better resourcing. That said, it would have been better if they’d been able to focus 100% of their attention on delivering patient care.
Planning for and establishing supply chain resilience should be a board room priority for all healthcare systems. Further, system leadership on questions on future innovations beyond supply chain (for example, collaboration) will be critical to ensuring a vibrant and quality system for all Americans in all locations.
— Jack Stockert is Managing Director at Health2047.
