How Can Hospitals Deal With Supply Shortages As Demand Increases?

Acute shortages of items such as masks, ventilators, intensive care unit (ICU) capacity, and staff, as everyone is painfully aware, are hampering the valiant efforts of health care workers around the world to combat the pandemic.

The correct supply-chain methods and management procedures are needed now more than ever to optimize finite resources, alleviate shortages, and quickly grow capacity. While effective management will never be able to replace dedicated and skilled medical practitioners, better supply chain management is critical to ensuring that these experts have the resources they need to accomplish their jobs.

This essay, which is based on best practices in supply chain and operations management, can assist struggling hospitals and other care providers in increasing their chances of receiving such resources. It is founded on a core reality: addressing shortages and supply restrictions necessitates a multifaceted approach that addresses both the demand and supply sides of the issue.

Demand Management

A pandemic creates a massive demand shock for health-care systems that are already overburdened. While social distancing measures, travel limitations, and shelter-in-place orders can help to reduce demand, they are only one element of the answer. The way patients enter and progress through the various nodes of the health-care delivery system must still be managed.
Managing flow entails proactively changing how, when, and where patients (both infected and uninfected) receive care among various nodes. Hospitals have been compelled to reconfigure patient flow in real time during the Covid-19 outbreak, contending with concerns such as: Which care can be relocated from a hospital to an alternative setting (including the home)? Which operations can be safely postponed for which patients? What policies will we implement to decide how long patients (including those with and without Covid-19) must stay in the hospital or use an ICU?

Health-care executives should adhere to two principles to assist relieve system congestion:

1. Recognize the interdependencies of systems and their unintended consequences.

Health-care systems are made up of multiple interconnected places of care, with demands that are not independent of one another. Demand for baby birth rooms, for example, fuels demand for postpartum and neonatal care. Changes in one area of the system can have unforeseen implications due to system interdependencies.

For example, Diwas Singh KC and Christian Terwiesch discovered that as ICUs achieved full capacity use, clinicians responded by reducing patient stay lengths. This “early” discharge method did actually open capacity in the near term, but it had an unforeseen consequence: it raised the “bounce-back” (re-admission) rate to the ICU, hence increasing ICU demand (and effectively reducing peak ICU capacity). The study’s overall message is to avoid accidentally exacerbating a terrible capacity situation by directing patients away from specific locations of care. Many hospitals are pursuing a policy of postponing large swathes of regular care, which could result in similar false economies if some patients require more intense care later as a result of the deferral.

The takeaway here is to properly stratify patients based on their risk of delay in order to manage not only their current health but also their future demand for the most scarce health resources. In the case of the Covid-19 epidemic, for example, we should be very cautious about deferring care since it increases the likelihood that a patient may require ICU or ventilator capacity a few weeks later. We should not exacerbate the acute shortages of ICU space and ventilators caused by Covid-19-related demand by making bad decisions about how to manage patients who aren’t infected with Covid-19.

Considering accessible resources, bottlenecks, and capabilities outside of one’s own walls is also part of taking a system approach. When a hospital is under duress, it is natural for them to concentrate their efforts on the facility’s resources (like beds and medical staff). However, they risk overlooking the challenges encountered by community and home health care providers, whose personnel and infrastructure are already stretched. Yes, transferring non-critical patients to home care helps free up hospital capacity for the critically ill while also lowering the risk of infection. However, to monitor and coordinate such care, this strategy must be accompanied by the necessary infrastructure and technology (e.g., mobile care units and telemedicine capabilities). If it isn’t, it’s possible that more home-bound patients will require hospitalization or intensive care later than would otherwise be the case.

2. Predict demand in the short future.

When demand is soaring and systems are overburdened, forecasting demand a week or two ahead of time may appear pointless. After all, what difference does it make whether a system is 25 percent or 50 percent overutilized? Both appear to be doomed. When systems are overburdened, however, tiny fluctuations in caseloads from week to week can have a significant influence on a hospital’s resource consumption. While no forecast is flawless, having some insight into short-term future demand allows hospitals and other care facilities to arrange patient flows ahead of time (e.g., pursue preemptive diversionary strategies).

There is now enough data from around the world on Covid-19 infection rates and their impact on care providers for local providers to make rough but useful short-term forecasts, taking into account population density, social distancing policies, daily testing rates that can be achieved, test processing time, and so on.

As we’ll see later, forecasting is also important for controlling supply shortages and bottlenecks.

Managing Supply Chain Issues and Bottlenecks

Demand management must be accompanied by effective measures for regulating the supply of resources required to care for patients, which is no simple undertaking when dealing with a highly contagious disease such as Covid-19. But it’s critical because, as we’ve previously seen, failing to do so can lead to vicious loops.
Tests and personnel are in more demand as a result of the Covid-19 cases. Initially, increased demand for tests resulted in test shortages (and thus testing backlogs). Both performing tests and treating patients necessitates the use of protective equipment. As a result of the increased patient flow, masks and other protective equipment are in short supply.

Staff are prone to infection due to a lack of both testing and protective equipment. Health care practitioners account for 9% of all Covid-19 cases in Italy. In Spain, the percentage is 14%. According to investigations in The New York Times and The Boston Globe, there is currently a high infection incidence among health care employees in the United States. High rates of infection among health-care workers not only exacerbate already-severe staffing shortages, but they also have the potential to drive up demand if infected employees act as a channel for transmission to patients who do not have Covid-19. Breaking these vicious loops is a fundamental problem in dealing with supply shortages. There is no one-size-fits-all solution, but following some of the guidelines below might help.

De-bottlenecking should be done in a systematic manner. This entails not just focusing on existing bottlenecks, but also anticipating and addressing future possible bottlenecks (i.e., forecasting) before they materialize or become acute.

Dealing with acute supply shortages entails determining the source of the shortage and concentrating efforts there to increase or leverage current supply (which we discuss later). Because employees are such an important resource in practically every aspect of health care delivery, ensuring their health should be a top focus. Increasing ventilator production or adding extra ICU beds is only beneficial if there is enough people to run the new equipment and provide care for the patients.

Bottlenecks will move in highly intertwined supply networks. If the availability of cotton swabs limits testing capacity, increasing the availability of testing kits or increasing laboratory capacity to perform tests will be ineffective. Getting ahead of supply shortages necessitates forecasting the next bottleneck in the system, which necessitates thorough knowledge of inventory available throughout the supply chain (not just one’s own inventory), supplier capacity, MHRA approved warehousing UK, demand patterns, and consumption rates.

Supply forecasting, like demand forecasting, is not an exact science. However, supply predictions provide critical insight into the supply chain’s future health and enable companies to predict potential shortages ahead of time, when there is still time to address the problem. It’s normal for health-care institutions to focus on the shortages of ventilators, masks, protective gear, and swabs right now; these shortages must be remedied immediately. Hospital executives should be mindful, however, that future shortages of other commodities and resources are possible. The sooner they are discovered, the more likely they are to be resolved before they become severe.

Resources should be pooled and coordinated among organizations. The amount of inventory necessary to service a given level of demand reduces as the number of places holding inventory shrinks, according to a well-known supply-chain management principle. Because the benefits of pooling uncorrelated demand from different sites, centralization minimizes inventory requirements (that is, while some places might be experiencing higher-than-expected demand and requiring more inventory, this would be balanced out by places experiencing lower-than-expected demand, which require less inventory). This is an area where territorial conduct by governments, hospitals within states, or even sections within a hospital can increase supply shortages dramatically.

Not only is it important to share physical inventory, but it’s also important to share inventory information: what’s accessible, in what quantities, and where it’s located? While good knowledge cannot suddenly eliminate actual material shortages, bad information can certainly exacerbate them. Ambiguity is created by a lack of information, and uncertainty can lead to “just in case” hoarding.

Breaking through departmental borders and optimizing inventory inside a hospital is an absolute must as a first step. During a crisis, however, hospitals should consider going a step further and pooling and controlling inventories (including exchanging information) inside their health-care system and even across health-care systems in the same region. This entails pooling inventory across institutions that may compete for patients during normal business hours. However, attempting to purchase resources ahead of time in order to gain an advantage over competitors exacerbates shortages.

The concept of pooling resources isn’t limited to materials inventory. It should be reserved for equipment that can be moved easily from one hospital to another. It’s possible that staff will be shared across hospitals. In the Netherlands, ICU bed availability is managed nationally, and in other services, such as obstetrics, as many as ten hospitals that are competitors during normal business hours now report their bed availability regionally, allowing beds to be managed as a single resource and allocated through a single call center.

None of this is very challenging from a technical standpoint. A ventilator or ICU nurse from Hospital X would most likely be equally effective in Hospital Y across town. The challenge is persuading hospital executives to modify their minds. There is a time and place for competition and a time and place for collaboration. A pandemic is an excellent opportunity for collaboration.

Real-time innovation and learning To combat a scarcity, you’ll need to go outside the box in terms of technical and organizational solutions. Many hospitals have started creating and producing alternate designs that may be suited for engaging with non-Covid-19 patients in response to the shortage of masks (particularly N95 masks). Repurposing post-anesthesia care units (PACUs) into intensive care units (ICUs) is another example of hospital innovation.

Human assets can be repurposed as well. Generalist nurses in the United Kingdom, for example, are being taught to operate a ventilator under the supervision of a specialist critical care nurse, effectively boosting the number of ventilated patients that each specialized nurse can care for.

Some repurposing issues are more institutional or organizational in nature than technical. Most countries or professional associations, for example, require health care practitioners to be certified in order to do particular responsibilities. Staff shortages can be alleviated by loosening these criteria.

Any type of invention has some level of risk. Are the improvised masks actually safe? Is it true that repurposed PACUs are as successful as traditional ICUs? Is it true that having generalist nurses operate ventilators under the supervision of specialists degrades the quality of care? Hospitals simply do not have time to wait for solid answers to these concerns or to follow the typical route to implementing new policies when they are under extreme pressure (e.g., long clinical trials). Data, collected, analyzed, and shared in real time, is required to provide insights on what is working, what is safe, and what is not.

Hospitals and providers must try novel techniques, but they must also communicate their findings openly so that others may benefit and everyone can make the necessary mid-course modifications. The learning required to identify, implement, and disseminate novel ways can be accelerated with good information and quick feedback loops.

Information-driven decision-making, rapid decision-making, and learning

The Covid-19 issue is putting health-care institutions around the world to the test, both medically and managerially. Dealing with the operational strains brought on by the crisis necessitates coordinated, comprehensive, and methodical measures including both demand and supply factors. To put these plans into action, health-care executives must prioritize knowledge, quick decision-making, and learning.
Everything revolves around information. Every practice we’ve suggested thus far relies on having high-quality, high-speed data. You can’t predict patient flows without detailed information on how many tests have been performed, how many individuals have been infected, where they are, where they’ve been, who they’ve been in contact with, and so on. Without accurate data on current demand and supply in various parts of the system, it is impossible to anticipate the outcome of novel methods to patient flow. Without knowledge on future demand, consumption rates, and current stock levels, it’s impossible to foresee the next bottleneck. Testing capacity and turnaround are important not just for clinical reasons, but also because they provide information that may be used to establish and adapt operating strategies in advance.

Decisions must be made quickly. Government restrictions, bureaucratic rhythms, political maneuvers, management systems, and institutional rules have no bearing on Covid-19’s attack speed. It doesn’t matter whether you have high-quality, timely data if the people in charge of health-care systems are unwilling or unable to act on it swiftly.

The difficulty for health-care executives is to strike a balance between the importance of centralized coordination and information sharing and the necessity for physicians and nursing staff on the front lines to be flexible and responsive. In a fast-moving crisis, hierarchical systems, which are slow in the best of circumstances, are completely ineffective. In a crisis, good leadership focuses on giving front-line workers the resources and decision-making authority they need to fix problems swiftly and learn.

Concentrate on your studies. A crisis, by definition, takes an organization into unknown terrain. Existing playbooks must be rewritten on the spot and under extreme duress. Everything we’ve spoken about so far necessitates coping with questions for which the solutions aren’t completely known or are changing by the day. It is not possible to wait for perfect knowledge.

In these circumstances, execution is a succession of trials and errors. Failures (or “mistakes”) are an unavoidable part of learning new things, not an indication of ineptness. Experiments must be learned from, including what didn’t work, but this can only happen if the organization’s leadership establishes a psychologically safe and transparent environment. The health-care organizations that will fare best against Covid-19 are those that can learn quickly, not those that have all the answers.

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