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No one needs to tell physicians that there’s a supply chain problem—they witness the evidence every day. Once predicted as a temporary glitch due to the rapid onset of the COVID-19 pandemic, today’s troubled supply pipeline has settled in for the long haul.
The problem is more complex than it might first appear, mainly because in the supply process, so much can go wrong, said Gene Brown, MD, an otolaryngologist with Charleston ENT & Allergy in Charleston, S.C., with 30 providers across the state. “The supply chain challenges every aspect of product delivery,” he explained. “Manufacturers are having a hard time with raw material supplies. Manufacturing labor is challenged due to the pandemic. Machines and equipment break down and there are problems with labor for repair—along with the supply of parts to enable that repair.”
To keep their practices thriving in the face of ongoing supply chain interruptions, physicians are finding ways to anticipate challenges and implement strategies to reduce the impact of shortages and delays.
How It Began
The first COVID-19–era supply problem involved personal protective equipment (PPE). With global demand skyrocketing and an inadequate national stockpile to draw from, healthcare providers found themselves ill equipped to serve on the front lines against a disease about which little was understood. Get Us PPE, a grassroots nonprofit organization founded by emergency physicians early in the epidemic, reported that from March to October 2020 alone, it delivered more than 3 million PPE units to frontline workers, filling only 12% of requests for the supplies.
“We had a tremendous limitation on N95/KN95 masks and that was at a time when we were most fearful of the disease process,” recalled William Blythe, MD, an otolaryngologist at East Alabama Ear, Nose and Throat, PC, in Auburn/Opelika, Ala. “We ordered whatever we could find and had back-orders on all critical supplies. In late 2020 and throughout 2021, we utilized ‘Project N95’ [the national clearinghouse for PPE and, now, COVID-19 tests] to obtain what we could.”
“Initially, we purchased what we could get, wherever we could get it,” said Marc Dubin, MD, an otolaryngologist in private practice in Baltimore County, Md., and part of The Centers for Advanced ENT Care, LLC, with 60 providers throughout Maryland, Virginia, and Washington, D.C. “We got what we could, where we could: Amazon and Sam’s for gloves, hardware stores online for eyewear. Unfortunately, due to the unclear shipping times, we had to overorder and deal with the wastage.”
As supply shortage issues gradually improved or resolved, new ones emerged. “Early on it was impossible for everyone to get masks, gowns, and eyewear; this progressed to gloves and cleaning supplies,” said Dr. Dubin. “Everyone was attempting to get large quantities of items that they rarely, if ever, stocked previously. Truthfully, prior to March 13, 2020, I do not remember the last time I wore an N95.”
Oto-Specific Supply Challenges
Although the PPE supply crisis gradually subsided (thanks in part to domestic manufacturers; see below), disrupted supply chain problems persisted as the longer-term effects of the pandemic set in. Random shortages and shipment delays of medical care essentials left physicians, including otolaryngologists, with alarming gaps on their supply shelves.
“Initially, we were also met with dramatic decreases in patient volume, so we were able to make do,” said Dr. Dubin. Soon, however, supply shortages sent otolaryngology practices scrambling and strategizing to maintain acceptable quantities of key items.
Douglas Backous, MD, a private practice otolaryngologist and neurotologist in Edmonds, Wa., reported difficulty obtaining suction canisters, tubing, drapes, medications, and general clinical and ambulatory surgical center supplies. Dr. Dubin describes a period when the practice couldn’t get 1% lidocaine with 1:100,000 of epinephrine, and “rapid PCR tests that were available to ship in early January are now shipping in May,” he said. “I attribute it to demand, with an element of hoarding.”
Otolaryngologists have become acutely aware of which items tend to run out fastest. Dr. Backous placed soft goods, such as tubing, drapes, and drugs in that category. Dr. Blythe concurred, adding tongue blades and disinfecting spray to the list. Dr. Dubin noted that his office uses a significant amount of oxymetazaline, 4% lidocaine, and 4% tetracaine, and Dr. Brown extended the list to include needles, syringes, and ear speculums.
Working with multiple suppliers and supply sources appears to be standard practice for otolaryngologists. Even Dr. Blythe, who runs a small private practice, doesn’t rely solely on his regular supplier. In addition to Project N95, he has at times reached out to healthcare services company Cardinal Health, the local hospital, and other surgical centers for supplies. “We also used Amazon, Ebay, Sam’s Club, and Costco when things were critical,” he noted.
Dr. Dubin’s office typically uses one supplier but maintains accounts at multiple suppliers as a backup and has at times turned to major online retailers and big box stores. “We have also, over the past two years, used third-party resellers and independent contractors,” he said. “Fortunately, we’re a large account, so we’re kept at the front of the line for many of the items we need.” He firmly believes that no practice should depend on any one supplier, and that “you do what you must to keep the door open and maintain quality patient care.”
The new normal is that most everything is or will be on a manufacture back-order at some time. —Gene Brown, MD
Inventory and Cash Flow
Managing a medical supply inventory requires strategic thinking at the best of times, but today’s unpredictable supply chain has raised the challenge to a new level. “The new normal,” said Dr. Brown, “is that most everything is or will be on a manufacture back-order at some time.”
The most effective way to navigate this rocky terrain depends greatly on the size of the practice and its cash flow. As part of a large group that includes a chief financial officer and an inventory management specialist, Dr. Brown has a broad support network to manage supply needs. “We manage inventory for our 30 doctors, have an ambulatory surgery center, and we run a group purchasing organization that represents another 250 doctors who are members in a clinically integrated network called OASIS,” he explained. “As a large practice, we lean on materials management to purchase enough to meet the expected volume.”
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This expansive network enables the group practice to overstock supplies where needed, which Dr. Brown acknowledges also puts a strain on the supply chain. “We can no longer run a ‘just in time’ inventory,” he said. “We have to get supplies as they become available.”
A less expansive practice might require a different strategy. “Supplies are fairly streamlined here,” said Dr. Backous. “Most items are used very frequently and there would be utility in keeping additional stock, but storage space is at a premium. We do order items earlier when there’s a known shortage.” Dr. Blythe’s staff has increased its par level for all critical supplies. “I don’t want to suggest that we’re ‘hoarding,’ but that might be a fair characterization,” he said.
To guard against future catastrophic shortages caused by overstocking, distributors have had to put some practices on monthly or weekly allocation programs for certain items, which means they’re limited to a predetermined amount based on past usage. “We have to purchase the amount that we’re allocated for fear that we might lose allocation,” Dr. Brown explained. “If we need more of an item than is on allocation, we have to find substitute products, which can be costly.” Similarly, Dr. Dubin’s practice has had to increase inventory from two weeks’ worth to four to six weeks’ worth.
New inventory minimums translate to greater cash outgo, so minimizing waste is paramount. “In private practice we try not to waste anything ever,” said Dr. Blythe, “but that has become even more important during the supply chain struggles.” Otolaryngologists cited drugs used in surgery, injectables, and sutures as frequently prone to waste. Dr. Dubin said his office was going through sterilizing wipes so quickly that “we had to switch to a cleaning solution concentrate.”
With a normal supply chain, a two-week supply is reasonable, and I look forward to when that time comes again. —Marc Dubin, MD
To complicate matters, supply prices have risen, dramatically at times. “A box of gloves that cost us $8 before COVID now costs $30,” reported Dr. Brown. “Having to stock excessive amounts has led to overhead challenges within our practice, and during COVID we have also struggled with patient volume challenges. The combination of lower revenue and higher overhead partially tells the story of how COVID has challenged private practices.” He cautions colleagues about dealing with new companies, as “the supply shortage has brought out the schemers to prey on everyone.”
Ultimately, otolaryngologists can’t treat patients without having the necessary supplies, and that’s the bottom line, reminded Dr. Dubin. “I would rather pay more in the short term than lose a patient because they had to go somewhere else to get their ear tube put in,” he pointed out. “Meanwhile, we aren’t buying anything we aren’t going to use at some point, and if supply issues normalize, I’ll save money at the back end. With a normal supply chain, a two-week supply is reasonable, and I look forward to when that time comes again.”
Linda Kossoff is a freelance medical writer based in Woodland Hills, Calif.
Are Domestic Producers the Solution?
Among the many revelations brought about by the COVID-19 pandemic is the healthcare system’s problematic reliance on the global supply chain in times of crisis. As the early personal protective equipment (PPE) shortage vividly demonstrated, dependence on overseas manufacturers in the face of global demand can lead to disastrous results.
In an article published in Harvard Business Review in February 2021, Douglas Hannah, PhD, assistant professor of strategy and innovation at the Questrom School of Business at Boston University, cites the thousands of domestic suppliers who were able to manufacture and distribute critical supplies to healthcare providers across the country in the early weeks and months of the pandemic as the potential solution.
Dr. Hannah outlines specific steps that will enable the U.S. to safely and systematically employ domestic resources and bolster the current healthcare supply infrastructure to avoid a repeat of 2020. These steps include specific ways to document and vet equipment designs to ensure quality and to identify alternative suppliers before they’re needed. He suggests that, even if this alternative system is never used, it will serve as “an insurance policy” against the fragility of the current global supply chain.