Assessing, evaluating provider, supplier performance amid crises

Healthcare providers and product/service suppliers may react differently in the face of a crisis or disaster that impacts supply and demand — particularly the absence of the former and the abundance of the latter.

But maybe that shouldn’t be the case.

Nevertheless, Healthcare Purchasing News asked a handful of supply chain executives to rank the preparation efforts of providers and suppliers based on their perceived ability to adequately meet demand for IV and pharma solutions, on a scale of 1 to 5 with 1 being the least prepared and 5 being the most prepared. Here’s how they scored providers and suppliers and their reasoning.

Provider preparedness

Vincent Jackson, Vice President, Pharmacy Services Group, HealthTrust

3 — Providers are coming to terms with an evolving market for generics and solutions, which may not be solely governed by a race to the bottom from a pricing perspective. This change however, needs to be evaluated in tandem with the constant pricing pressures that are facing providers on a daily basis. The next few years are going to be interesting in seeing the push and pull in how these markets mature in light of the increased scrutiny.

Stephanne Hale, Director, Clinical Solutions, Vizient 

I recently interviewed several Vizient members to gain their insight on this very topic. Without exception, everyone I spoke with reported having managed an IV drug and/or solution product shortage within the previous three years. And all reported having a conservation strategy in place. While it was great to hear they were utilizing a conservation strategy, they also shared a wide range of variables that impact how an organization must adapt to any given shortage. Given that feedback, it isn’t easy to offer a generalized ranking of provider preparedness.

Some of the variables that commonly impact preparedness include the size and type of provider/facility, their experience with drug and solution shortages, resources to address the issue, and whether or not there is a conservation strategy in place. More importantly, if there is a conservation strategy, is it a sustainable one? More often than not, the tendency is to implement an intervention, such as a conservation strategy, for an issue based on a perceived or actual product shortage. However, once the shortage appears to have ended, allocations have been lifted and the supply chain appears to have course corrected, the tendency is to revert to customary practices and procedures. This approach often cancels out some or all of the process improvement gains that may have been realized during a shortage.

Ash Chawla, R.Ph., Chairman and CEO, PDM Healthcare  

3 — Protocols establishment, adherence and training, preparedness

Thomas Lubotsky, former Chief Supply Chain Officer at a leading Midwestern integrated delivery network and senior healthcare supply chain industry observer 

3 — I would rank no more than a 3 among providers today to meet demand for IV and pharma Solutions. While providers have become creative in their deployment methods of delivering these products inside their hospitals, there is simply too much vulnerability should one of the three manufacturers have severe supply delivery issues in the market.  

Mike Moloney, Group Vice President of Integrated Pharmacy, Premier 

5 (to both providers and suppliers) — We believe providers are as prepared as they can be, and so are suppliers. Meeting demand for IV and pharma solutions will come down to the health of the market, the FDA and lawmakers to create more competition — and how suppliers and providers can help is by influencing positive change with the relevant agencies. For example, manufacturers of critical medications should be required to report where such medications are manufactured so the FDA can appropriately mitigate to account for the potential impact of natural disasters, facility shutdowns and other situations. We recommend providers work with suppliers to develop a list of critical medications that are needed for patient care in case of an emergency, natural disaster or other urgent situation.

Supplier preparedness

Beth Grimsley, Portfolio Executive, Medical Sourcing Operations, Vizient

I.V. suppliers did heed the lessons of Hurricane Maria and implemented [several] strategies — investing in U.S. production, optimizing supply chain operations, creating manufacturing redundancies, implementing an importation strategy and developing e-services/technology. Those efforts have become part of the standard operating procedures now, so that is definitely an improvement in preparedness. However, I agree with my clinical colleague Stephanne Hale in that the gains are often lost once the crisis is over.

JACKSON: 3 — The events of the past few years have been eye opening for all parties. Important steps are now addressing some of the issues but a holistic approach will require years of retooling and re-evaluation. The commitment to maintain adequate supplies for patients is clearly evident from suppliers. Now, they must execute on that promise.

CHAWLA: 1 — Manufacturer issues: Product manufacturing capacity and product delivery; Wholesalers stocking issues: Carrying one supplier only that may be on their source programs.

LUBOTSKY: I would rank suppliers no more than a 2 to meet demand for IV and pharma solutions when an unplanned event occurs and disrupts their supply delivery capability. Lack of a transparent culture, demand-based signaling and preparedness planning among both providers and suppliers are the key reasons these rankngs are so low. Consistent demands by both providers and suppliers to get each other to the table to address these core issues will be necessary to improve the performance among not only IV and pharma solutions but also other critical drug shortages. Perhaps national GPOs can play a more prominent role to address these shortage issues and appropriate solutions.

Leigh Nickens, Director of Marketing, Fluid Therapy and Injectable Drugs, B. Braun Medical Inc.

Preparedness varies from organization to organization, so it would not be fair to assign a number to either group. For suppliers, improvement requires prioritizing a commitment to a vital product, such as IV fluids. Suppliers must do more than just understand how important such solutions are for providers; they also must be willing to invest in them because it’s the right thing for patient care. At the center of B. Braun’s corporate philosophy, for instance, is a dedication to helping change healthcare for the better. We know IV solutions are essential to good healthcare. That’s what drives our long-term commitment to alleviating future shortages.