Fixing America’s Healthcare Supply Chain

The buildup to World War II illustrated the negative effect that huge wartime demand for medical supplies, equipment, and pharmaceuticals had on public and private healthcare systems in the United States. After the war, the Defense Logistics Agency (DLA) began building and pre-positioning federally owned medical materiel in storage depots domestically and materiel management centers in the European and Pacific theaters of operations. Collectively, these inventories were named war reserve materiel (WRM) and consisted of billions of dollars of medical materiel. The WRM was designed to provide wartime start-up supplies until medical materiel manufacturers could ramp up production to levels capable of supporting both wartime and civilian healthcare needs simultaneously. The medical WRM was also used to provide medical support to contingencies and humanitarian assistance missions both at home and abroad.

In order to maintain medical supplies within shelf-life parameters, armed forces healthcare facilities were required to use WRM supplies to the maximum extent possible in order to conserve the DLA’s investment in inventory and maintain its supplies and equipment ready for deployment worldwide. When the 1991 Gulf War broke out, pre-positioned medical materiel in Europe and at U.S. depots supplied the initial start-up inventories for medical facilities set up in the Middle East. The WRM system worked as advertised, relieving much pressure on the healthcare supply chain. However, almost immediately after the Gulf War, American politicians decided to draw down WRM inventories both at home and overseas. It was part of what was called a peace dividend.

Lessons From COVID

Seven actions would ensure a supply chain just-in-time inventory model for normal times and a just-in-case model for future disasters and other emergencies.

The current pandemic laid bare the shortsighted approach to medical materiel management. The just-in-time supply chain broke down, and there were no “just-in-case” inventories to sustain healthcare services. This left healthcare providers without much needed personal protective equipment and many of the supplies and equipment needed for pandemic care and everyday patient services.

One idea being recommended for decades is a medical materiel management system that functions like the Strategic Petroleum Reserve for petroleum products. Using this model, the government would purchase and own reserve inventories of medical materiel, ready to supply any mission the government directs during emergencies.

Urgent Action Plan

The following actions would re-establish the healthcare supply chain just-in-time inventory model:

  1. The federal government should direct the DLA to institute a federal Disaster Reserve Materiel (DRM) program. This program should be large enough to supply and sustain the U.S. healthcare and public health systems for 90 days during future disasters, or until medical manufacturing can ramp-up to meet the new demand for product.
  2. Re-institute the DLA’s Directorate of Medical Materiel as the executive agent for DRM oversight. However, instead of returning to the former depot system, use major U.S. healthcare distribution companies to manage DRM in storage.
  3. Reinvigorate the National Disaster Medical System (NDMS) and establish disaster reserve materiel supply lines between DLA, prime vendors, and NDMS partner hospitals, and eventually connect other healthcare entities on a voluntary basis.
  4. Select one prime vendor for each DRM class of supply (medical/surgical, pharmaceutical/biologics, and medical equipment) to manage the government-owned DRM and to conduct quality control functions and to maintain all medical materiel within shelf-life parameters.
  5. Demonstrate the DRM system’s capability and capacity to rapidly move DRM materiel to U.S. healthcare organizations using existing distribution networks during NDMS exercises or actual disasters.
  6. Discourage healthcare organizations from building their own inventories in order to enable DRM prime vendors to develop highly accurate inventory demand models that closely correlate with actual materiel usage.
  7. Restore the pre-COVID healthcare supply chain in a manner that uses a “just-in-time” inventory model for everyday health services and very deep and resilient DRM inventories for use in future large-scale disasters … and, yes, even a future pandemic.

By instituting a federal DRM system, the U.S. healthcare supply chain will be both economical during normal times and resilient enough to expand to meet any future disaster requirements for medical materiel.

James M. Rush Sr.

James M. Rush Sr. has over 45 years of healthcare administration and community emergency management experience in the U.S. armed forces, the U.S. public-health community, and the nation’s civilian healthcare industry. He served as the Region III project officer for the National Bioterrorism Hospital Preparedness Program, and the CDC’s National Pharmaceutical Stockpile, always dedicated to assisting healthcare and public health organizations prepare for “all hazards” events and incidents. He is author of, among other published works, the “Disaster Preparedness Manual for Healthcare Materials Management Professionals,” and a self-published book “Unprepared.”



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