With the pandemic waning, one might think that the strain on the health care supply chain would be dwindling as well. However, with no federal funding relief in sight and hospitals still experiencing a higher volume of patient needs than pre-pandemic, little has been done to create long-term stability in the health care supply chain in Texas and across the U.S.
Many hospitals have been struggling to stay on their feet over the last two years without a moment to rest. From the onset of the pandemic in 2020 to the Delta variant in 2021 and, most recently, the Omicron variant in 2022, there hasn’t been time for hospitals to pause, reflect, optimize and strategize a path forward.
“Texas hospitals have been in a constant state of alert since the pandemic started,” said Carrie Kroll, vice president of advocacy, public policy and political strategy for the Texas Hospital Association (THA). “There hasn’t been a great opportunity to sit down and talk as an industry about how we can do better. Hospitals are certainly doing that on an individual basis, but they haven’t had the freedom to do it as thoroughly and thoughtfully as they would like.”
Pamela Bryant, senior vice president of supply chain at Parkland Health in Dallas, affirmed this, stating, “We’ve been full steam ahead for almost two and a half years.”
From masks and other personal protective equipment (PPE) to saline, needles, IV bags and other medical necessities, Texas hospitals have been working diligently since the pandemic started to ensure essential supplies are in stock when they are needed most.
“The health care supply chain is a complex model,” said Bryant. “The problem is that in the health system, for example, when I don’t have a particular stent, it’s most likely the only stent that would work. There’s not another brand to go to. There’s not another viable product sitting on my shelf to grab.”
Keeping an accurate, up-to-date and plentiful inventory at every hospital or health system facility can be a complicated task. When you add two plus years of overwhelmed hospitals, burnt-out staff and a never-ending need for supplies on top of an already complex system, the strain on the supply chain begins to show.
An Abrupt End in Funding
At the beginning of the pandemic, hospitals received federal funding, and support for hospital supplies was abundant. Since 2020, the Provider Relief Fund has given $130 billion to health care providers across the country, with about $9 billion of that going toward Texas hospitals, physician practices and other health care facilities. Hospitals also received funding from other sources such as the American Rescue Plan Act (ARPA).
Provider Relief Fund distributions only covered expenses and lost revenues through March 31, 2021. Hospitals across the country endured the Delta variant in summer 2021 and the Omicron variant in winter 2022 without additional relief to help support hospital staffing, facility costs, essential supplies and more. Then, in spring 2022, federal payments for COVID-19 care for uncovered patients were abruptly discontinued. Texas providers had received about $3 billion in federal reimbursement for COVID-19 testing, treatment, and vaccination of the uninsured. Now, hospitals can no longer access these payments.
“It feels like the congressional tide is definitely turning,” said Anna Stelter, senior director, policy analysis at THA. “We are not seeing an appetite for additional relief to be made available to providers so what is left of those appropriated funds is starting to dry up.”
In a recent letter to Congress, the American Hospital Association (AHA) wrote:
“The Provider Relief Fund (PRF), which was established to help health care providers mitigate their COVID-19 losses, has been exhausted. No relief was provided for expenses related to the Delta or Omicron variant surges, despite 49% of COVID-19 admissions occurring during these two surges resulting in steep increases in cases, hospitalizations and deaths. In addition, $17 billion of the PRF resources were diverted to other uses, leaving many hospitals without the resources needed to face the ongoing and overwhelming COVID-19-related financial and operational challenges.”
Because of ongoing COVID-19 cases, hospitals are continuously trying to meet the increased patient demands while now essentially operating on a pre-pandemic budget. They are, in other words, attempting to operate in a post-pandemic world on a pre-pandemic budget.
According to a recent Kaufman Hall report from AHA, hospitals incurred an estimated $54 billion in losses nationwide over 2021, driven by COVID-19 and its impact on hospitals. Additionally, COVID-19 funding was cut from Congress’ $1.5 trillion spending bill to fund the federal government until October.
THA, in collaboration with organizations like the Texas Department of State Health Services (DSHS), has been working to help Texas hospitals to get the supplies they need, while also advocating for state and federal funding to ensure patient access and quality care are not jeopardized.
“For rural hospitals, this funding made the difference between doors open and doors closed,” explained Stelter. “When we have a big funding pool drop out of the mix, our rural hospitals will feel this first and probably the hardest.”
Meeting the needs of smaller, more rural hospitals can also be trickier logistically as supplies and resources might not be as readily available or close by.
“When it’s an industry-wide issue, it makes it a lot easier for the state to assist and figure out how to get their hands on the product if they can, and pinpoint how to distribute it,” said Kroll. “It’s a little harder when it’s one or two smaller hospitals.”
“Through the pandemic, my colleagues and I learned that relationships are important. We all have the same goal to take care of patients. We can work collaboratively to make sure that we have the right product at the right place at the right time.”PAMELA BRYANT, SENIOR VICE PRESIDENT OF SUPPLY CHAIN AT PARKLAND HEALTH IN DALLAS
Making it Work
Despite funding and supply chain challenges, Parkland Health is making it work.
Parkland Health was recently named on Global Healthcare Exchange’s (GHX) Best 50 North American Healthcare Providers for Supply Chain Excellence list. It is one of three Texas hospitals named to the list. Over the past few years, the health system has received a number of other accolades for their supply chain excellence.
Hospitals recognized on the GHX list are honored for their work in improving operational performance while driving down costs through supply chain automation.
“We’ve worked a lot on cleaning our data and made our system of data an important part of our process,” said Bryant. “That is probably the biggest reason that we’ve been recognized…because we’ve worked very hard to make our data accurate, which allows us to process an accurate order, which allows us to then get our product in timely and have it available at the right time and place for our clinicians to use.”
Bryant explained that the biggest challenge Parkland faced during the pandemic was acquiring products as their normal sources were hindered due to rippling supply chain issues. In addition to their data processes, Bryant attributes Parkland’s operations success to diversifying its vendors.
“We had to work with other suppliers and develop some additional relationships with local suppliers,” she said. “By diversifying your vendors, you’re able to improve your ability to take care of your organization, get products quicker, and grow your community.”
Parkland found that creating diversity among their supplier base was beneficial to a hospital’s ability to get the products they need. Bryant advocated for this approach explaining that it helped her team be more agile and move a little quicker to meet patient demand without any missed steps.
Finding a Sustainable Approach
Like Parkland, many hospitals across the state have been doing what they can to make it work and meet immediate needs as best they can. But how can we achieve long-term supply chain stability?
After two years of the pandemic, we’ve gained a better understanding of how COVID-19 altered hospital operations and, more importantly, how we can adjust and optimize moving forward.
“I think as an industry we could benefit from hospitals and individuals within those hospitals to have a larger conversation and talk through what worked, what didn’t and go through a SWOT (strength, weakness, opportunity and threat) analysis,” said Kroll.
“When the supply chain gets a clog in it, it causes you to do a lot of rework, moving different pieces around. Then, when you get stable, the question is, did that move make sense? Was it a temporary state? Do I need to move it back?” said Bryant. “Being able to walk through some of those things I think is still taking time. We still need time to be able to step back a second and we haven’t really had that time to step back.”
The industry continues to advocate for additional funding to provide hospitals with some relief as they work through long-term strategic plans. THA continues to work with DSHS and other organizations to ensure Texas hospitals get the supplies and connect to the resources they need to ensure quality care across the state.