Do we finally have a tipping point for a better healthcare supply chain?

By John Strong

This past Sunday afternoon, I was sheltering at home due to COVID-19 after walking our dogs about as far as either they or I could go and turned on the TV. ESPN8 was replaying the 2006 Johnsonville Brat Eating World Championship from Sheboygan, Wisconsin. It was an MLE (Major League Eating) event, with an $8,000 cash prize for the winner with Sonja “the Black Widow” Thomas trying to best her previous record of eating 35 brats in just 10 minutes.

How does protection of the U. S. food production system mirror healthcare’s current requirements?
All this sports action and the daily briefing from the White House missing any details about what products were available in the healthcare manufacturing supply chain and where they were located reminded me that the federal government had put in place two important pieces of legislation to protect America’s food supply some years ago.

The first is the Bioterrorism Act of 2002 which required processed food manufacturers to show the entire movement history of their products. That history needs to include where the ingredients have been, where they are at the current time and where they are consigned for delivery. The Act gives the Food and Drug Administration the authority to recall food if they have evidence that it poses serious health threats to humans and animals.1

The second is the Food Safety and Modernization Act of 2011, enacted after the September 11 terrorist attacks on the U. S. This Act applies to everyone in the food supply chain, from farmers to large manufacturers, and it mandates that all facilities in the food supply chain have a proper food safety system that includes traceability of all products.

Why can I find a can of Spam, but not N95 respirator masks?
The Bioterrorism Act and the FSMA Act have been used – and are instructive to healthcare. In May of 2018, the Hormel Company recalled more than 220,000 pounds of their Spam meat product because they found metal contamination from batches produced in February. As a result, no consumers were seriously harmed. Only the recalled batches came back, and the cost was lower than a general recall would have been.

Despite more than 50 years of trying, the healthcare industry has never been able to accomplish this feat, even though the barcodes and technology already exist for this purpose. For example, GS1 has already set standards for healthcare products2. For years both manufacturers of healthcare products and healthcare providers have pointed to each other and said “you need to go first” with the adoption of these standards. As a result, there has been a stalemate of epic proportions for tracking many commoditized healthcare items where absolutely nothing has happened. (Think N95 masks, disposable gowns, and gloves.)

Advantages and disadvantages of a medical product tracking system
Now that we are coping with supply shortages of key medical products due to the COVID-19 health crisis, the advantages cited by both those advocating for the use of these barcodes, and those in the food supply chain seem almost prophetic.

  • Access and manage inventory more effectively across various storage locations3. Many folks are flying blind, and just know they need more product to get them through the next few weeks.
  • Make products more available when needed and avoid and mitigate out-of-stock scenarios by identifying an alternative source. FEMA is moving their stockpiled goods to so-called “hot spots” around the country. Wouldn’t it be nice for large healthcare systems to have the same capability?
  • Undertake more effective hospital inventory planning projections. While impossible to project the demand for something like the COVID-19 crisis, this is a key feature that can help ‘balance’ the healthcare supply chain and avoid factors such as the “Bullwhip Effect”4.
  • Real time location(s) of products. Nice to have – right now.
  • Proper documentation of products. This will put the so-called grey market at rest and ensure that products will perform as specified and not endanger providers on the front lines of healthcare.
  • Response preparedness. The healthcare supply chain is still largely reactive, and more needs to be considered to help it become more proactive during events like COVID-19.
  • Transparency and honesty. Been approached by folks with high cost supplies? One of my contacts reported more than 50 calls from folks hawking hard to find medical products.
  • Ease of corrective action. Having more information about the location and types of medical supplies will allow healthcare providers without federal intervention to allocate their supplies in a more efficient fashion, and share with others, if necessary.

Lessons from food traceability indicate that there are some significant downsides but not overpowering ones – either for healthcare providers or healthcare product manufacturers. Yes, there is a higher maintenance cost than simply doing nothing5 and it does involve more government regulation. It also requires staff to manage the process and more difficult data analysis. Facilities must pay a $500 annual registration fee to the FDA … which in the scope of this health crisis seems like a modest amount.

The United States is blessed to have the most innovative and productive development capacity for new medical devices and pharmaceuticals of anyone around the globe. At the same time, we still haven’t engaged the technology necessary to make the healthcare supply chain far more transparent and useful in times of crisis. This pandemic should be a reminder to everyone working along the supply chain that we can and need to do better before the next pandemic.

Let’s use this lesson to better prepare the healthcare supply chain for the next pandemic. Even professional eaters prepare by stretching their stomachs for weeks. Unfortunately, though, the “Black Widow” was upended in her bid to eat more than 35 brats in the 2006 World Championship by Takeru Kobayashi, who was able to consume 58 sausages in just 10 minutes. That’s roughly 10 pounds.

2 See
4 The bullwhip effect on the supply chain occurs when changes in consumer demand causes the companies in a supply chain to order more goods to meet the new demand. The bullwhip effect usually flows up the supply chain, starting with the retailer, wholesaler, distributor, manufacturer and then the raw materials supplier. This effect can be observed through most supply chains across several industries; it occurs because the demand for goods is based on demand forecasts from companies, rather than actual consumer demand. (

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