Due to the sensitivity and critical importance of their work, healthcare facilities are especially vulnerable to disasters of both the manmade and natural varieties.
According to the Office of the Director of National Intelligence, the number of ransomware attack claims worldwide rose 74 percent in 2023 compared with 2022. Specifically, ransomware attacks against the healthcare sector “nearly doubled” over that span, “reaching a total of 389 claimed victims in 2023 compared with 214 in 2022.” In the U.S. specifically, attacks against the healthcare sector were in fact “up by 128 percent.” Cyberattacks lead to any number of issues, including delays in medical procedures, disrupted patient care due to multiweek outages, and “strained acute care provisioning and capacity.”
A major cyberattack on Change Healthcare in late February of 2024 brought these issues into full relief. According to the House Energy & Commerce Committee, Change Healthcare, a subsidiary of UnitedHealth “acts as a clearing house for 15 billion medical claims each year—accounting for nearly 40 percent of all claims.” The cyberattack knocked them completely offline, creating a “backlog of unpaid claims” and resulting in “serious cashflow problems” at doctors’ offices and hospitals. Alarmingly, the Energy & Commerce Committee in the House of Representatives found that UnitedHealth “wasn’t using multifactor authentication…to secure one of their most critical systems,” leading to an estimated one-third of Americans having their “sensitive health information leaked to the dark web.” Andrew Witty, the CEO of UnitedHealth, told the Committee that he paid $22 million in Bitcoin as ransom to the criminals, but the company still cannot guarantee that more information won’t be leaked.
On top of manmade disasters, climate change is increasing the volatility and frequency of major hurricanes in the southeast United States, evinced by hurricanes Helene and Milton. These two storms caused massive disruptions in healthcare in the fall of 2024. One of the most pressing knock-on effects of Hurricane Helene was Baxter’s North Cove facility in North Carolina being taken offline due to severe damage to the site. This led to acute disruptions in the supply chain for IV solutions. The threats to healthcare facilities due to natural disasters are multifarious, and different parts of the country are becoming increasingly susceptible to different types of these disasters that require different mitigation strategies.
Healthcare Purchasing News was able to speak with Katie Korte, vice president of assurance and continuity at Vizient, about preventative measures that are being taken to bolster the strength of the supply chain in the wake of natural disasters like hurricanes Helene and Milton and the looming specter of cybercrime.
What types of disasters (natural or otherwise) strain supply chain most?
The vulnerability of the supply chain was magnified through the pandemic as both consumers and hospitals struggled to access basic goods. These vulnerabilities consistently led to disruptions in the market due to a variety of triggers including natural disasters such as hurricanes, earthquakes, and floods, as well as cyberattacks, geopolitical tensions, labor shortages, and inflation. Each disruption strains the supply chain differently, ranging from reduced manufacturing operations and delayed delivery of products to compromised digital systems needed for real-time supply chain management and coordination.
What preventive steps can be taken in advance of a hurricane or other disaster?
Proactive preparation can distinguish a health system during times of disaster. Key strategies for building resilience to supply disruptions include identifying critical items through proactive cross-referencing, diversifying supplier networks, mapping critical supply chains, and strategically pre-positioning inventory. In events like hurricanes, these measures help health systems minimize disruptions and maintain operations. In addition, healthcare organizations can further strengthen their resiliency strategy by incorporating demand planning with a robust sourcing strategy. This can drive the production of vital, life-saving products by increasing pooled or dedicated inventory. By strategizing essential medications and critical care supplies, health systems can navigate disruptions without compromising patient care.
How do hurricanes (like Helene and Milton) affect supply chain?
Hurricanes have the potential to impact every aspect of the supply chain, causing widespread disruptions. Healthcare organizations, suppliers, and distributors may experience flooding, loss of power, road closures, and interrupted transportation. These disruptions are further exacerbated by labor shortages, operational challenges, and potential damage to products stored in affected facilities. The situation becomes even more critical due to the heightened demand for essential supplies like medications, medical equipment, and fuel for backup generators. For example, Hurricane Helene caused severe destruction in the communities it affected, including catastrophic damage to a major IV fluid manufacturing plant. This event halted production, resulting in a nationwide IV fluid shortage that impacted healthcare organizations for several months.
What technological advancements have there been to strengthen supply chain against the impact of natural disasters?
Technological advancements have significantly enhanced the resilience of supply chains during natural disasters. Healthcare organizations now have access to various tools that utilize predictive analytics and artificial intelligence to anticipate potential disruptions. For instance, some platforms process real-time data related to weather patterns, geopolitical events, supplier reliability, and financial risks. By providing greater supply chain visibility, these technologies support risk management through supplier site mapping, automated disruption monitoring, and tailored mitigation strategies, empowering healthcare organizations to make informed, proactive decisions.
How do man-made events, like cyberattacks, affect supply chain?
Man-made disruptions can have a profound impact on the supply chain, sometimes proving even more severe than natural events. In 2024, a significant cyberattack targeted a major healthcare payment processor, leading to substantial delays in electronic payments and claims processing. Although this might not seem directly linked to the supply chain, it caused delays in patients receiving essential medications. While recent reports show a decrease in cyberattacks on large health systems, the total number of cyber incidents is rising, likely due to organizations adopting stronger protective measures. Despite these advancements, the persistent threat of cyberattacks highlights the critical need for comprehensive cybersecurity strategies within supply chains and healthcare systems.
What lessons have been learned in the wake of hurricanes like Helene and Milton?
The impacts of hurricanes Helene and Milton have highlighted the vital role of proactive supply chain resilience in healthcare. Key takeaways emphasize the importance of strategic partnerships, diversified sourcing, and improved transparency via real-time data monitoring to maintain continuity of care during disruptions. Providers can boost supply chain resilience and support uninterrupted patient care by identifying their critical care supplies and essential medications. Once identified, they can strategize with manufacturers and suppliers through their contracts for increased inventory to help ensure availability during times of disruption.
Matt MacKenzie | Associate Editor
Matt is Associate Editor for Healthcare Purchasing News.
