As a physician leading the charge in supply chain transformation, what inspired you to delve into this particular aspect of health care?

No one sets out to go into supply chain. Most of us have supply chain find us, and that was true for me. After being in a full-time general surgery practice for 13 years, I wanted to pivot to an administrative role to have a broader impact on health care. While looking for typical physician leadership roles, I found an unusual position at a large health system seeking a surgeon in supply chain. The role was very new at the time, and I spent six months trying to identify other physicians in similar roles that I could potentially learn from. I found two across the whole country. Once I figured out what the job was about, it really resonated with me.

You talk about health care embracing a culture of variability. What do you mean and why is this so prevalent?

As a surgeon, one of the things that really bothered me was how inefficient surgeries were, not just from the operational aspect of it in terms of time management but also the products we were using. Supplies would often be opened on the back table during surgery and then thrown away without a single drop of blood on them. I was always told it would cost more to reprocess and repurpose than to just buy it new. Half of the waste baskets were full of products we never touched. One study found $1,000 in waste for each surgery. That was shocking to me. Other physicians seemed to have no knowledge of this, and it wasn’t consistent. Some surgeons wasted a few hundred dollars and others several thousand. There remains so much potential to make health care more efficient and cost-effective.

How do we break past this mindset of waste and variability?

At Advantus, we conducted an analysis of this. The supplies used during most surgeries – and particularly what gets implanted into a patient – are selected by the doctor. That makes sense on a certain level, but how they make those decisions is not always based on best practices, evidence or data. It’s mostly based on their own individual preferences, maybe who their favorite vendor rep is or what they are used to using because they haven’t had any exposure to anything else. Hospital administrators contribute to this because they want to keep their doctors happy. Vendors take advantage of this by going to the doctor’s offices or hanging out at the surgery centers to create relational ties. The reality is that variability adds to cost, but the impacts on care delivery are even more important to note. If you have to teach your operating room staff ten different ways to do something, there is more room for error which increases the chance of an unfavorable outcome for patients. Indeed, medical errors is the third highest cause of death in the US, and I believe unnecessary variability in care delivery contributes to this.

Fortunately, physicians are competitive. At one hospital, we chose cost-per-case as a metric. We measured the cost of the mesh that 25 surgeons used in hernia repairs for six months. We just showed the results to the physicians and didn’t say anything about them needing to make a change. The next six months, we saw a dramatic drop in the overall cost of mesh being used because everybody wanted to be the least expensive one. They didn’t want to be known as the most expensive surgeon. That allowed us to have a conversation about having one or two mesh vendors instead of five. This had nothing to do with quality because all of the products are equivalent. That’s true for most products out there.

You’ve emphasized the shift toward value-based group purchasing organizations (GPOs). Could you explain how these differ from traditional GPOs in addressing not just pricing but also clinical considerations?

The idea of a value-based GPO portfolio is new and innovative. The model for most traditional GPOs is to aggregate the buying power of individual hospitals so they can get better pricing from the vendors. That will work initially, but if you start inviting all of the vendors and suppliers, the advantages break down because there is no exclusivity. We are taking a better approach by creating a leveraged portfolio that is vetted from a clinical and value perspective.

Our CEO Dan Hurry has compared us to a Costco model. Walmart would have 20 different brands of cereal, and it takes a lot of time for the buyer to sort through those. We want to be more like Costco with maybe four brands, which is an incentive to the supplier because they face less competition. The customer gets a discounted price, and the store is guaranteed to sell in a larger quantity to a group of customers that have intentionally chosen to be a member of Costco. The customer wants someone else to make the choices for them from a limited number of products that they know have been vetted for quality. In similar fashion, Advantus is not going to contract with every vendor out there. We want to have strategic partnerships with specific suppliers who will agree to pricing that will be best in class for vetted products, and we want to help health systems that are ready to adopt a truly patient-centered, value-based care model.

With the health care industry contributing significantly to environmental pollution, how much responsibility falls on supply chain to make a difference?

We have a lot of work to do in terms of how we impact the environment in terms of waste and our use of energy. About 10% of carbon emissions created in this country come from health care, of which 80% is related to supply chain. There is a lot of opportunity there where we can improve the health of not just our patients but of the planet through how we partner with our suppliers, manufacturers and distributors. Supply chain has other social responsibilities, such as addressing local social determinants of health, forced labor and human trafficking, diversity and inclusion, health outcomes inequities, and global fair trade.

What’s the top way that supply chain could impact the health of patients?

I know this is not a very popular topic for physicians, but we should focus on what the patient wants. We as doctors have been trained that our opinions are best for patient care, but that’s not always the only course forward. Above all else, patients want the assurance of quality and reliability. In the airline industry, the individual preferences of the pilots are not prioritized because everything has been standardized toward safety and customer experience. Medicine should follow this model. A patient-centered health care system should be standardized toward best practices, so as a patient you can expect similar, reliable outcomes. That is the key not only to supply chain but to a health care system that keeps its community healthy.

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Whilst the vaccination programmes here in the UK and in the likes of Israel and the US have been successful, a wider rollout will be a much tougher challenge. The problems faced by some European countries in procuring and distributing vaccines have been well publicised, with the vaccination rollout in the developing world almost non-existent. Both have struggled because their supply chains have not been able to cope with the challenges of a rapid pharmaceutical rollout, albeit for different reasons; poor levels of healthcare infrastructure have played a large role in disrupting rollout efforts in African nations, with a variance in regulatory advice and standards hindering a unified EU coordination of the vaccine rollout in Europe. Both European and African nations have also struggled with procurement issues, with too little stock at some points, and too much to effectively manage at others, leading to wasted jabs.

Adaptable healthcare supply chain

So, what can be done to expedite the global rollout of the COVID-19 vaccines? From a supply chain perspective, the answer is actually quite a bit.

Take the practicalities of ensuring people receiving the jab are accurately recorded, so they receive their second dose of the right vaccine at the right time. All vaccine manufacturers have included barcodes on the vaccines, but only at the secondary packaging level. That means the ability to scan the barcode is lost if a box or case of vaccines (which could include 1,000 doses) must be distributed in smaller quantities, say to a rural community. Without the barcode, all documentation, including stock usage, which patient received which vaccine, where and when, and the associated storage conditions, must be recorded manually, which is far more prone to error. Improving packaging and enabling digital inventory management even at the most granular, single jab level, would be a game changer for the rollout of vaccines within remote communities.

There also needs to be an extension of the collaborative spirit behind vaccine development into the supply chain itself. With collaboration comes greater visibility across the supply chain and into the myriad factors that impact supply chain performance. One of the best examples of this is dry ice. Dry ice is critical to the vaccine cold chain, but its production is also dependent upon ethanol production, which produces carbon dioxide, one of the ingredients in dry ice. With people driving less, ethanol production has declined along with the supply of dry ice.  As supply chain professionals know, the supply chain is only as strong, only as resilient as its weakest link.

So, in addition to improving vaccine packaging and extending a collaborative approach to vaccines into the supply chain, what other steps can the healthcare supply chain follow to help meet the challenges of a global vaccine rollout?

Here are five best practices we can determine from lessons learned during the vaccine distribution in the UK, US and Israel:

• Minimise variation whenever possible. Some degree of natural variation will always exist; the key is to minimize variation that we can control, such as who is eligible for the vaccine, how it is distributed and how it is identified and tracked across the supply chain.
• Leverage the tools we have: Most pharmaceuticals and medical devices have an auto-identification carrier (e.g., a barcode) to support electronic vs. manual capture of product information. But barcodes are only of value if you use them.
• Invest in automation: Scanning barcodes on patients and medicines has become the standard operating practice in healthcare. It’s been proven to reduce medical errors while reducing the amount of time spent by clinicians on clerical tasks. It should be how we document the movement and use of all products across the supply chain and in-patient care.
• Create multi-directional visibility: Many of the supply chain challenges during the pandemic were exacerbated by a lack of visibility into inventory and demand. Due to the interdependencies of the supply chain, this visibility needs to extend upstream into raw materials, downstream into forecasted demand at all locations where care is delivered and across to the sources of various supplies and products upon which supply chain operations depend.
• Call on the experts: When meeting critical supply chain challenges, call on the experience and expertise of supply chain professionals working every day in hospitals across the nation. These experts often manage spend that rivals that of major corporations and facilitate the sourcing and delivery of a wide range of products to meet their patient population’s various health needs. They know healthcare, they know how to implement an adaptable supply chain and they know the communities they serve.

Here in the UK, we’ve seen the incredible effects a successful vaccine rollout can have on reducing the severity and mortality of COVID-19. It’s critical now, as the world hopes to open back up following over a year and a half of restrictions, that we replicate the vaccine success across the rest of the world. That starts with an adaptable supply chain that learns lessons from the pandemic and applies this learning to help meet the challenges of supporting a global vaccination programme.

Article by James Minards, UK Country Manager, GHX

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