In Short Supply
Season 1: Episode 10
February 19, 2020
Photo by Leslie Walker
Shortages of basic medical supplies have become a familiar pattern for hospitals around the U.S. What causes them? And how can we prevent them?
Listen to the full episode below, read the transcript or scroll down for more information.
The Basics: Medical Device and Supplies Shortages
According to the Food and Drug Administration, a medical device shortage is “a period of time for which the demand or projected demand for a medical device within the U.S. will exceed the supply or projected supply for that device.” While medical devices range from low-tech supplies like gloves and gowns to sophisticated equipment like defibrillators and pacemakers, our reporting focuses on the former.
Device shortages, along with drug shortages, occur regularly. They can lead to patient care delays, patient harm and increased costs and uncertainties for providers. However, while manufacturers of “medically important prescription drugs” are required to tell the FDA if there’s an issue with their production, no such requirements exist for devices, making data collection and preventive planning difficult.
Experts say that while health care leaders — hospital executives, the Department of Health and Human Services, the FDA — are aware of the situation, interest from the public often doesn’t last beyond a particular crisis, making necessary policy changes difficult.
Why Do Shortages Happen?
Experts say the medical device supply chain currently values efficiency over resiliency, making disruptions more difficult to weather. For example, manufacturers might choose to concentrate their production in just a few plants rather than spread it out among many, or they might place their plants in locations that are cheaper — such as Puerto Rico, China and India — but more vulnerable to natural disasters and other disruptions.
On the buyer side, hospitals attempt to keep their costs low by relying on “just in time” ordering, which leaves them with fewer supplies in reserve to fall back on in the event of a shortage. Responses to shortages such as hoarding, panic ordering and substituting can ultimately exacerbate the shortage and have negative consequences for others in the supply chain including causing additional shortages.
Market Concentration in Basic Medical Supplies
Tradeoffs enlisted Matt Grennan, an Assistant Professor of Health Care Management at the University of Pennsylvania’s Wharton School, to analyze the level of concentration found in some of the most common medical supply categories. Grennan selected 18 of the lower-tech items from a list of the top 100 devices purchased by hospitals over the last 10 years, and then analyzed hospital purchasing data to assess the number of manufacturers supplying at least 75% of each of those markets.
Grennan notes that although he found high levels of concentration in most supply categories, understanding its role in causing or exacerbating shortages requires further study.
How Can Shortages Be Mitigated or Prevented?
Experts say the most important thing is to increase the amount of information available about the medical device supply chain. Adam Saltman, who handles shortages for the FDA’s Center for Devices and Radiological Health (CDRH), says the agency is pushing for legislation that would create a mandatory reporting framework for medical device manufacturers, much like the one that already exists for drugs, which would would give the FDA and other researchers a more complete picture of the supply chain and help them be more proactive and preventive.
Other potential solutions that some experts say could make the supply chain more resilient and are worthy of study include:
- Subsidies: The federal government could pay manufacturers to maintain consistent production of certain critical supplies, similar to how farmers of certain crops are subsidized.
- Stockpiles: The federal government could expand the supplies included in its Strategic National Stockpile and use it more frequently rather than only in major disasters. Stockpiles could also be created on local or regional levels.
- Regulatory reforms: The government could make it easier for new manufacturers, especially those located overseas, to supply these markets.
Recent Medical Device Shortages:
“As demand spikes for medical equipment, this Texas manufacturer is caught in coronavirus’s supply chain panic,” Lena H. Sun and Rachel Siegel, The Washington Post, 2020
“Surgeries are being postponed because of a surgical gown shortage,” Leah Asmelash and Leslie Holland, CNN, 2020
“Colorectal Surgeons Scramble in Wake Of Stapler Recall,” Christina Frangou, General Surgery News, 2019
FDA Medical Device Databases:
Medical Product Shortages During Disasters: Opportunities to Predict, Prevent, and Respond – A Workshop, National Academies, 2018
Guests: Eric Haas, MD, Chief of Colorectal Surgery, Houston Methodist
Matt Grennan, PhD, Assistant Professor of Health Care Management, Wharton School at the University of Pennsylvania
Ozlem Ergun, PhD, Professor of Mechanical and Industrial Engineering, Northeastern University
Original music composed by Ty Citerman; additional music by Blue Dot Sessions, Unheard Music Concept, Moby, Kevin McLeod and Bacon
Additional thanks to:
Dr. Patricia Sylla, David Pitman, Antonio Banrey, Paul Biddinger, Pablo Gorenstein, David Gillan, Corey Doss, Abigail Caudle, Elizabeth Ninan, Tom Derrick, Terry Loftus, Dan Hanfling, Nicolette Louissaint, Matt Walker, Marta Wosinska, Erin Fox, Erica Shenoy, Bob Town, Evan Walker, Eamon O’Kelly, the Tradeoffs Advisory Board…
…and our stellar staff!