Supply Chain Survival

The Baxter plant disruption revealed critical vulnerabilities in product delivery that facilities must be ready to face.

It’s been approximately two months since Hurricane Helene crippled the facility that makes 60% of the IV fluids used in U.S. healthcare facilities.

The storm surge and flooding from the hurricane that hit Baxter International’s North Cove facility in Marion, N.C., on Sept. 28 shows how a single event can expose just how fragile the medical supply chain on which surgical facilities across the country rely can be.

Canceled cases, rationed resources

In the weeks that followed Baxter’s plant closure, some cases were canceled as facilities scrambled to maintain their inventories by rationing what they had and sharing resources when they could. Two temporary bridges were built at the plant, which allowed Baxter to ship out hundreds of truckloads of what it had manufactured before the hurricane. Baxter has resumed production of the two IV lines used in most healthcare facilities.

This emergency could have been worse. A strike by port workers on the East and Gulf coasts began a week after the hurricane, but it lasted only two days. Healthcare facilities are using this crisis to look ahead and examine how they can better prepare for similar events that cause future supply chain disruptions. In addition to the guidance offered by organizations such as ECRI, the Association of Healthcare Value Analysis Professionals and the Association of periOperative Registered Nurses (AORN), Baxter shared a clinical resources page that includes webinars and videos about how to manage resources and use them as efficiently as possible.

“While we currently expect that all lines will be restarted by the end of the year, we do not yet have a timeline for when we expect North Cove production to be fully restored to pre-hurricane levels,” says Baxter’s most recent weekly update. “We are grateful for the ongoing partnership and efforts of our customers as we navigate this complex and challenging situation to prioritize patient care.”

Weathering the storm

DESPERATE MEASURES Two temporary bridges were built at the hurricane-hit plant, which allowed Baxter to ship out hundreds of truckloads of what it had manufactured before the storm.  |  Baxter International’s Facebook page

While some facilities were forced to temporarily shut down and cancel elective surgeries due to the Baxter disruption, others fared quite well, all things considered.

ASC development and management firm Compass Surgical Partners, based in Raleigh, N.C., was prepared for the IV fluid shortage and weathered the storm. “We have not had to cancel cases due to this event, and we kept healthy stock levels,” says David Lutters, CST, supply chain manager for Compass, regarding IV fluids at its partner centers. “Luckily, in our situation, nothing was difficult to get.”

That’s because Compass has a primary distribution agreement with Cardinal Health, which recently opened a distribution center in Greenville, S.C., and is itself the primary distributor of IV fluids for Baxter competitor B. Braun. Mr. Lutters says that partnership safeguarded Compass’ allocation of the products, which then allowed it to aggregate those allocations to its centers across its platform. “While B. Braun wasn’t directly affected by this crisis, they acted as a partner in the market to move product to primary Baxter facilities where possible,” he adds.

Mr. Lutters suggests working with vendors and distributors that have national footprints, or that aren’t almost entirely situated in one geographic area but instead are diversified across multiple locations. Doing so can help your center avoid catastrophic shortages like Baxter customers experienced during this event, he says.

When it comes to assuring enough supplies are on hand to get through temporarily acute shortages, Mr. Lutters suggests independent centers not go it alone, but instead to connect with a group purchasing organization (GPO) or a group of other centers that will coordinate and share resources with each other when necessary.

Compass and each of its partner centers do something like this internally. They use a weekly allocation log generated by Cardinal to monitor allocation levels in relation to current purchases. “What remains at the end of the week is put into a pool, and then that pool helps to facilitate orders for some of our other sister centers,” says Mr. Lutters.

Another worthwhile endeavor during shortages is to use them as an opportunity to reset your necessary supply levels and reduce waste. Compass centers, for example, worked to reduce unnecessary use of IV fluids to head off supply shortages — a practice that might stick.

“We were able to minimize waste through more precise administration,” says Mr. Lutters. “There’s a fair amount of waste in health care, and by raising that awareness our providers become more cognitive of that. Now they can try to maintain that conservation effort. The big thing now is, if you can operate this way, keep it that way. That will only help to lighten up the supply chain should we ever encounter something like this again.”

Mr. Lutters advises ASCs to plan ahead, to develop contingency plans and to regularly stock extra supplies of critical items that will enable your facility to weather temporary shocks to the supply chain. “The goal is to have that awareness of what is going on, or what’s coming, and get ahead of it,” he says. “I still think no one could have fully prepared for the magnitude of this event, considering this was just one facility. We need to remain agile in a fragile supply chain.”

Supply chain management, much like health care in general, is a constantly evolving job that never really ends, and one that requires constant attention and monitoring. “People always ask, ‘When does it stop? When do you feel like you’re finally safe?’” says Mr. Lutters. “It’s as if you need a contingency plan for the contingency plan … for the contingency plan. There are so many different scenarios, so it’s hard to mitigate all of them, but each time one of these things comes up, it’s about planning and awareness.”

Ahead of the scramble

Whether it’s a global pandemic, a natural disaster like Hurricane Helene or a port strike, facilities do have ways to prepare for even the worst supply chain disruptions. The key is using the available tools to stay ahead of the scramble, says Tim Browne, vice president of global supply chain solutions for ECRI, an independent nonprofit organization with global headquarters in Plymouth Meeting, Pa.

To that end, ECRI has recently expanded its Supply Chain Report, which identifies the Baxter IV and irrigation solutions that were affected by the North Carolina manufacturing plant closure and offers all equivalent and alternative products from other manufacturers. Among its many benefits, the ECRI report can save facilities impacted by the Baxter disruption precious time — time they often don’t have. “When these types of supply chain disruptions occur, everybody is scrambling to identify alternative products that would fit their organization’s specific needs and backfill alternative products,” says Mr. Browne. “This report ensures they don’t need to do the research just to start that process.”

The ECRI report is designed to help any impacted facility in the healthcare industry gain directional insight into all alternative, functionally equivalent products that are available to see them through supply chain disruptions caused by the temporary Baxter plant closure. “What ECRI developed is our functional equivalents program,” says Mr. Browne. “It immediately tells you what the functionally equivalent alternatives available are based on key performance indicators (KPIs) in that specific product category. For example, if an IV solution was impacted [by the Baxter disruption], the report will tell you all the functionally equivalent alternatives as deemed by ECRI.”

To create the report, Mr. Browne and his team worked side-by-side with industry and internal subject matter experts to compare and contrast products within different categories, identifying which KPIs are essential for facilities to consider, and which attributes are good to know but not necessarily critical when selecting an alternative. The data on these products was loaded into ECRI’s platform, and the KPIs were weighted accordingly.

“There are different weights to some of the key performance indicators, and that signals the KPI that is the most important,” says Mr. Browne.

For instance, if an IV solution includes each of the KPIs listed, then its KPI percentage is 100%, and the product is an exact match or equivalent to an unavailable product. If, however, a product does not include one or more of the indicators, then its KPI percentage could be lower, depending on the weight of the missing KPIs, and the product would be categorized as an alternative.

The ‘Holy Grail’ of preparation

There’s no doubt the ECRI Supply Chain Report is an invaluable tool for facilities desperate to survive the Baxter IV crisis, but ideally facilities should be proactive instead of reactive in their approach to supply chain management.

“We’ve seen a lot of progress since COVID, but organizations should ultimately want to get to a place where they receive the signal that there could be a potential disruption before it occurs,” says Mr. Browne. “The Holy Grail is to get beyond the ask.”

After the chaos of the pandemic and Hurricane Maria in Puerto Rico, many facilities should have learned how to negotiate major disruptions in their supply chain to a certain extent by now, says Mr. Browne. “They should have put processes in place to better navigate these types of situations, utilize relevant data they can load into their ERP and get a line of sight so that as soon as they’re notified there are alternative products, they know where to go,” he says.

As an example, he cites using the ECRI tool for standardization outside of times of crisis to potentially consolidate the number of vendors within a particular product category. “This is a tool that could enable a facility to get directional insight on those opportunities,” says Mr. Browne. “If they’ve got five vendors, they can see that there are functional equivalents within three that would eliminate the need for two of those vendors.”

Anything facilities can do to better prepare for supply chain issues is important, but Mr. Browne points to the comprehensive nature and the transparency inherent in ECRI’s report as two of its more compelling features. “We’re a GPO-agnostic organization,” he says. “We provide visibility into every alternative that we are aware of and have researched in the U.S. — even if we haven’t seen one provider purchase it. If we know that an alternative exists, we’re giving an unfiltered view with respect to categories such as IV solutions.” OSM