CHARLOTTE, N.C. — Premier Inc. (NASDAQ: PINC), a leading healthcare improvement company, is coordinating across the industry to help solve the supply chain challenges presented by COVID-19. Success will rely on strong partnership between providers, group purchasing organizations, distributors, manufacturers and the government.
“The challenges we face today are unlike anything we’ve confronted before as an industry,” says Premier CEO Susan D. DeVore. “To protect our healthcare workers and advance patient care, we need to move beyond allotting product based on historical volumes and ordering patterns – we need supplies to go where the cases are. And that requires strong coordination for supplies and commitments from domestic manufacturers.”
During COVID-19, Premier is helping align stakeholders around data-driven strategies to manage shortages and enable improvements in the supply chain.
Strategy #1: Accelerate access to products in shortage by creating an expedited contracting process within our group purchasing organization (GPO).
- Premier’s GPO established an expedited sourcing process to add additional suppliers to product categories experiencing shortages. The accelerated sourcing process incorporates products in categories that are under protective allocation, expected to move into allocation or currently in shortage, with the goal of rapidly increasing access to needed supplies.
Next Steps: Members will continue to evaluate and award contracts based on categories that will be most beneficial during the COVID-19 response to ensure increased access to shortage products at fair prices.
Strategy #2: Ramp up manufacturing.
- As Asia and Europe expand their export bans, the U.S. needs to jumpstart American manufacturing. Premier is identifying and reaching out to domestic manufacturers to expand production capacity, particularly for ventilators, critical drugs and other personal protective equipment (PPE) products.
- Recognizing the need to balance America’s reliance on international manufacturing and sourcing, Premier’s direct sourcing subsidiary, S2S Global, has been increasing the production of masks, gloves and other PPE from multiple countries and regions to lower risk and increase redundancy. Recently, S2S executed forward buys for certain categories of PPE to make supplies available to providers.
Next Steps: The industry is in talks with multiple U.S. manufacturers in ancillary lines of business about converting production from consumer products to healthcare products. More manufacturers are likely to join the efforts if they have assurance that they won’t be left with losses associated with excess inventory if buying shifts back to traditional suppliers once the COVID-19 crisis abates. The government, by providing pricing assurance, can incent manufacturers to increase production and remove impediments to international trade.
Strategy #3: Align supply chain stakeholders – group purchasing organizations, distributors, manufacturers and the federal government – to boost production and allocate the stock by greatest need.
- The country needs unprecedented industry-wide collaboration in the healthcare supply chain to get medical/surgical and drug supplies to the right place at the right time. To assist, Premier organized a coalition of the major supply chain organizations to respond to COVID-19 - The Private Sector COVID-19 Supply Chain Coalition.
- The Coalition is working with the Administration on strategies to gather data, preserve inventory, increase available supplies, allocate based on needs and bring new suppliers to market.
- Premier also helped form The Exchange at Resilinc, in partnership with Resilinc and Stanford Medicine, where hospitals and frontline healthcare providers experiencing supply shortages can submit requests for specific items and be matched with peer organizations that can supply those items.
Next Steps: Premier is committed to forming additional innovative partnerships across the industry in order to support fast action that helps our nation address the national emergency posed by COVID-19. In particular, we are prioritizing efforts to free up urgently needed supplies, particularly for providers with confirmed COVID-19 cases, and expedite open orders for supplies with distributors.
Strategy #4: Learn how much supply providers have and help them conserve it.
- In conjunction with the Food and Drug Administration (FDA), the Centers for Disease Control and Prevention (CDC) and the Department of Health and Human Services (HHS), Premier has conducted surveys to assess providers’ levels of supplies, including N95 respirator masks, gowns and hand sanitizer.
- According to the latest surveys of hospitals and senior living facilities, 97 percent of hospitals have implemented at least one conservation protocol. However, hospitals and non-acute providers alike are burning through N95 respirators, surgical masks, isolation gowns and face shields at a faster rate than they can be replaced.
- These insights have helped the Administration and private sector understand demand and surge needs and create solutions, and have helped shape the supply chain guidance provided across the industry.
Next Steps: Supply chain organizations are working together to understand hospital product use rates when treating COVID-19 patients, inventory on hand and capacity to care for more COVID-19 patients. Based on these learnings, supply chain organizations can continue to advocate for conservation measures to be implemented by those with and without COVID-19 patients. Conservation of PPE must be a top national priority to protect against shortages, and all providers are urged to follow CDC-recommended conservation protocols for PPE and be judicious in their use of supplies.
Strategy #5: Track drugs that are at risk of shortage and proactively protect them.
- The Premier pharmacy team created a list of critical products that are necessary to run a hospital and treat patients with COVID-19. We are partnering with manufacturers to assure and protect the supply of critical drugs needed through the duration of the crisis and beyond, including antivirals and antibiotics.
- This same team is tracking all sources of active pharmaceutical ingredients and assessing how suppliers are positioned to fulfill providers’ needs, given that many countries are either stopping exports or facing production problems. We are also monitoring demand spikes for targeted drugs that we deem critical to continuing acute care operations.
Next Steps: Because purchasing data provides a strong early indicator of how hospitals are prioritizing drugs in their efforts to treat COVID-19, it serves as an early warning system of drugs that may be at risk for shortage. As this occurs, Premier is working with manufacturers to increase production and putting high-demand drugs into reliable distributions programs.
Strategy #6: Impart careful purchasing habits that counteract panic-buying and protect providers from counterfeit supplies.
- The gray market is quickly amassing around counterfeit goods as the supply of PPE and other products became strained.
- In sharing specific examples of gray market offers, including bids to buy supplies at a 50X markup, we provided concrete guidance on how health systems should respond and appropriately vet products to ensure worker and patient safety.
Next Steps: Three of out five health systems have received gray market offers. Guidance exists to help the industry separate legitimate and illegitimate offers, and this guidance will continue to be refined. In addition, all offers collected by members will be turned over to law enforcement for investigation.
Strategy #7: Enable the industry, providers and clinicians with real-time, actionable information.
- The online Disaster Preparedness Response Community is available for real-time supply chain updates. The latest clinical information and resources for healthcare providers in its Premier Safety Institute.
- Premier also created and deployed a package of free COVID-19 alerts through its clinical surveillance technology, TheraDoc, to help providers more quickly detect and respond to patients who are potentially exposed.
- In addition, clinicians have been tapping Premier’s remote surveillance program that leverages our infection prevention team and TheraDoc technology to offer additional help to taxed providers.
Next Steps: Subject-matter experts continue to share the latest information with media to broaden the public understanding, and make themselves available to provide updates and respond to industry stakeholders’ questions via weekly calls.