Perspectives on Various Issues of Interest

COVID-19 and the Healthcare Supply Chain

The COVID-19 situation resulted in a sudden and unprecedented peak in global demand. This led to inventory shortages and capacity constraints. Healthcare organizations experienced congestion and resorted to demand substitution. The supply chain for pharmaceuticals and medical devices were impacted by disruptions. Pharmaceutical manufacturing companies get their supplies from more than 2000 active pharmaceutical ingredient suppliers as well as from other suppliers. Several of these inbound supplies were constrained during the pandemic. Close to 6,800 branded, generic, and biologic pharmaceutical manufacturers supply to traditional and specialty distributors who account for about 92% of sales. Distributors supply to retail and non-retail pharmacies amounting to more than 180,000 in numbers. The link from pharmaceutical manufacturers to distributors and retail pharmacies also experienced disruptions resulting in shortage of several medicines. The globally dispersed medical devices supply chain is very complex involving several to-and-fro cross border movement of supplies.

 

 

In 2019 the global annual demand of ventilators was 77,000 new ventilators. However, 2020 saw an unprecedented increase in the demand for ventilators. 5000-7000 ventilators were required per week in April and May of 2020. Some ventilator manufacturers boosted their production by 30-50% but, by themselves, could’t deliver the 500 or 1000% growth in production required. Top ventilator manufacturers in this tightly regulated market include Becton Dickinson, (Vyaire Medical), Philips, Hamilton Medical, Fisher & PaykelHealthcare, Dräger, Medtronic, GE Heathcare, Gelinge, Mindray, Löwenstein, and Hill-Rom. About 700 parts go into making a typical ventilator and these ventilators cost about $25,000 to $50,000 each. Some innovative inter-industry tie-ups (e.g. GM and Ventec Life Systems; Ford and GE Healthcare) helped in alleviating some of the pain. Under Defense Production Act, an order was issued to help U.S. ventilator manufacturers by removing "obstacles" to their accessing parts and materials needed to ramp up production of the breathing devices in response to the coronavirus crisis.

The root causes of disruption within the healthcare supply chain are a result of the global dispersion of supply base, supply chain complexity, lack of visibility and delayed response. To address the situation it is important to manage capacity (including labor), understand lead-times for suppliers, and be aware of the interdependencies (e.g. interdependence between testing capability and hospital capacity). Cross-industry collaborations by involving industry partners in automotive, consumer goods and cosmetics was helpful, but more of such collaboration will be needed to address the future needs. Developing new products and finding substitutes is critical to effectively manage the 'bottleneck' supply market. The process of creating private-public partnerships should be streamlined so that quick response to disruptions can be achieved. COVID-19 had taught an important lesson of developing responsive/adaptable supply chains, assessing current allocation/coordination approaches in response to the pandemic, and considering possible supply chain structural and/or regulatory changes.

 

United Nations World Food Programme wins Nobel Peace Prize for efforts to combat hunger

 

The Impact of Chain Organization Size on Efficiency and Quality of Affiliated Dialysis Facilities

In a recently published article we find that the size of chain organizations has a nonlinear effect on performance of dialysis facilities. Medium-sized chain organizations have lower efficiency and higher quality than smaller and larger chain organizations. 

The results call attention to being cognizant of the advantages and disadvantages of their growing size. Our study indicates that as chain organizations grow from a small size to an intermediate size, their efficiency drops and quality improves. We find that the efficiency bottoms out when chain organizations grow to have about 882 dialysis facilities whereas quality reaches its peak when the number of dialysis facilities in a chain organization reaches to about 796. After reaching these inflection points associated with efficiency and quality, facilities within the chain organizations become more efficient, but their quality levels suffer. This presents implications for decision makers to carefully think about the underlying mechanisms. The initial drop in efficiency as chain organization size increases may reflect the investments facilities affiliated with medium-sized chain organizations make when adding dialysis stations and personnel to address the demand growth. We conjecture that facilities affiliated with medium-sized chain organizations do not fully utilize their stations, thereby bringing down the efficiency. Their quality however increases, since staff in these medium-sized chain organizations has more time to give to each patient.

As chain organizations grow in size, it is likely that they see an increase in demand due to cross referrals among facilities within the chain. This increase in demand eventually provides the needed efficiency gains through economies of scale, but the associated deterioration in the quality of care raises concerns. It is possible that the approaches large chain organizations take to increase staff capacity, which differ from those taken by medium-sized chain organizations, could contribute towards deterioration in quality. Larger chain organizations tend to employ fewer registered nurses and licensed practical nurses as a percentage of their staff than medium-sized organizations. To offset the cost associated with staffing, large chain affiliated facilities employ higher levels of patient care technicians as compared to medium-sized chain organizations, which can lower their quality levels. As chain organizations grow, decision makers should appropriately manage the staffing patterns so as to avoid erosion of quality with a corresponding increase in efficiency.

To address both efficiency and quality performance, chain organizations should be strategic and develop appropriate coordination capabilities so that affiliated facilities can improve their quality while retaining efficiency gains through economies of scale. Technological innovations may make it easier to spread tacit knowledge pertaining to quality-oriented best practices. Opportunities for enabling interactions among people involved with clinical care, as well as nonclinical support services, can enhance learning and improve the quality of care. To facilitate quality improvement efforts, chain organizations can oversee the establishment of cross-disciplinary teams comprised of members from the affiliated dialysis facilities as well as the area manager from the chain organization. Organization-wide policies and procedures, including standards for clinical processes and quality improvement activities, should be widely communicated with affiliated dialysis facilities. Performance goals and objectives for dialysis facilities should be established and appropriate reporting structure of quality improvement initiatives and performance should be put in place. Chain organizations should provide feedback to affiliated facilities and, when needed, offer training and cross learning opportunities to the affiliated dialysis facilities.

For facilities within the chain organization, the results present implications for awareness of the influence of the contextual environment that chain organizations create. An independent facility has a better understanding and awareness of its resources and practices than facilities within chain organizations. Our results show that as these independent facilities join others to form a small- to medium-sized chain organization, they are able to improve quality but their efficiency suffers. The efficiency suffers, as these facilities have to coordinate efforts toward pooling their resources. As the size of chain organizations crosses a certain threshold level, the affiliated facilities gain economies of scale and increased demand, such that their efficiencies improve. However, they also witness growing heterogeneity and have difficulty managing the associated ambiguities, which have detrimental effects on their quality performance. An awareness of the changes in the environmental context and adoption of proactive adaptation measures, such as information exchange site visits to other affiliated facilities and training of staff members, can help manage efficiency and quality. Our results may be useful in other service settings beyond healthcare that have multiunit organizational forms, in that becoming part of a network, such as joining a chain organization, can have a positive or negative effect on efficiency and quality, depending on the size of the network.

Source: Dreyfus, D., Nair, A. and Talluri, S., 2020. The Impact of Chain Organization Size on Efficiency and Quality of Affiliated Facilities—Implications for Multi‐Unit Organizational Forms. Production and Operations Management, 29(7), 1605-1623

 

Condensing the time-line of developing vaccine - Some scenarios

Here are some key points from an interesting opinion piece published in the New York Times.

Assuming we already know Corona virus, vaccine is expected to be ready by May 2036 if no strategies for shortening the time-line is taken:

If we don’t wait for academic research, vaccine can be made available by August 2034:

 

If we rely on work from studying SARS and MERS to shorten preparations before clinical trials and start trials early, vaccine can be made available by January 2034:

If we don’t wait for academic research and start trials early, vaccine can be made available by April 2032:

Neither of these scenarios seem to help the prevailing situation. Hence, there is a need to move at “pandemic-speed” and put all the existing drug discovery work that is underway that relate to Covid-19. There are at least 254 therapies and 95 vaccines related to Covid-19 being explored.

It is important to recognize that less than 10 percent of drugs that enter clinical trials are ever approved by the Food and Drug Administration. The rest are either not effective, don’t perform better than existing drugs or have too many side effects.

Typically, vaccine development process takes a decade or longer.

Since the virus that causes Covid-19, are roughly 80 percent identical to the ones causing SARS, and given that both use so-called spike proteins to grab onto a specific receptor found on cells in human lungs, there has been some head start with regards to research. 

Here are some additional options to shorten the timeline (even earlier than April 2032):

By going with ‘pandemic speed’ time-line and starting subsequent steps before previous phases are completed, vaccine can be made available by July 2030:

By moving more swiftly to Phase 3 trials by combining phases, vaccine can be made available by January 2030:

If the decision is made to go with emergency provisioning, i.e. vaccinating front-line and essential workers early, vaccine can be made available by December 2030:

If the three above-mentioned strategies are adopted (i.e. moving at 'pandemic-speed’ timeline, pushing to large-scale testing sooner, and using emergency provisions), vaccine can be made available to front-line and essential workers by February 2028 and to everyone else by June 2029.

Along with the above mentioned steps, if we take a bet on a successful mRNA vaccine, this experimental technology may be faster to produce than traditional vaccines and the vaccine can be made available by February 2028.

 

Unfortunately, none of these scenarios can make the vaccine available in 12 to 18 months time horizon.

The risks and difficulties of fast-tracking vaccine research are huge ranging from the fact that poorly researched vaccines can actually makes it easier to catch the virus, or makes the disease worse after someone’s infected. Researchers also can’t easily infect vaccinated participants with the coronavirus to see how the body behaves. They normally wait until some volunteers contract the virus naturally. That means dosing people in regions hit hardest by the virus, like New York, or vaccinating family members of an infected person to see if they get the virus next. If the pandemic subsides, this step could be slowed.

As can be seen the longest time in the fastest scenario illustrated above is taken by supply chain activities such as building factories and manufacturing. If factories can be built now and manufacture can begin early, anticipating that factories will be useful for a future vaccine and that the product will clear regulatory hurdles, the timeline can be brought down from June 2029 (without taking a bet on the mRNA vaccine) to October 2023:

Finally if we can start building factories now and can bet on mRNA vaccine, vaccine can be made available by June 2022:

Finally fast tracking federal approval from one year to six months can further bring down the time and make the vaccine available by December 2021:

Source: Thompson, S.A. 2020. How Long Will a Vaccine Really Take? New York Times, April 30, 2020

Dependence on quarantined areas and strategies for managing sourcing risk

In a recent Harvard Business Review article, Tom Linton and Bindiya Vakil present the following information about the dependence on quarantines areas.

The authors present the following approach to manage sourcing risk:

Source: Linton, T., Vakil, B. 2020. Coronavirus Is Proving We Need More Resilient Supply Chains. Harvard Business Review, 5 March 2020.

 

Impact of Coronavirus on Healthcare Supply Chain

China manufactures the bulk of personal protective equipment used by healthcare providers in the United States. Other countries supplies these equipments are also hit hard by the coronavirus. Healthcare organizations in the United States typically buy more than 2 million N95 masks each month. The shortage of available capacity for production due to factory closures can result in a month long delay in the delivery of N95 marks that are used to protect against the spread of airborne illness. These masks differ from the standard surgical masks as they effectiveness depends on they proper fit and use. Healthcare workers are expected to be trained in the Occupational Safety and Health Administration’s protocols for their use. 

In the U.S. only two companies, 3M and Prestige Ameritech, manufacture the full line of N95 respirators. Historically the production of these masks within the U.S. has been insufficient to cover domestic demand. While the two companies are ramping up the production, it is expected to take up to a month to catch up with the demand surge.

On February 26 the U.S. Health and Human Services (HHS) secretary Alex Azar reported to the House Appropriation Committee  that U.S. has a stockpile of 12 million N95 masks. However, HHS estimated that we will need 300 million masks to cover an emergency and the combined production capacity in the U.S. and Mexico is only 65 million.

To address this gap between demand and supply, measures such a limiting the use of these masks by only healthcare staff who are directly involved in patient care is needed.

In addition to the surgical masks, the capacity shortage is also going to hit pharmaceutical products and medical devices. China produces 100% of the active pharmaceutical ingredients (APIs) for two vital products - penicillin and blood-thinner heparin. Capacity constraints and disruptions in the shipment of these drugs from China will necessitate exploration of alternative options. Food and Drug Administration (FDA) identified 20 drug products that are linked to China through API sourcing or product manufacturing, although these products are currently not in short supply.

From a supply chain management perspective, the disruption caused by coronavirus has resulted in a call for setting an industry-wide higher expectations with suppliers to improve supply disruption notification process, as noted by Chaun Powell, group vice president for strategic supplier engagement with Premier Inc. One could see potential price increases due to the an expanded base for manufacturing critical healthcare products in an effort to limit shortages of medical supplies. Inventory management practices should consider having safety stock in excess of 20% over the peak usage for these critical supplies, asserts Scott Cormier, vice president of emergency management, environment of care and safety for Medxcel. However, Powell notes that the increase in inventory should be gradual so as to avoid putting additional burden on suppliers.

Source: https://www.hfma.org/topics/operations-management/article/the-coronavirus-and-the-supply-chain-what-hospitals-need-to-know.html 

 

 

World Health Organization’s Assessment of Novel Coronavirus

Based on the information that the World Health Organization (WHO) received from the National Health Commission on 11th and 12th January, it was highly suggestive that the outbreak is associated with exposures in one seafood market in Wuhan. 41 confirmed cases were noted and there was one death. China shared the genetic sequence of the novel coronavirus on 12th January, which can help other countries develop diagnostic kits. The cluster was initially reported on 31 December 2019, when the WHO China Country Office was informed. The Chinese authorities identified a new type of coronavirus (novel coronavirus, nCoV), which was isolated on 7 January 2020. Laboratory testing was conducted on all suspected cases identified through active case finding and retrospective review. Other respiratory pathogens such as influenza, avian influenza, adenovirus, Severe Acute Respiratory Syndrome coronavirus (SARS-CoV), Middle East Respiratory Syndrome coronavirus (MERS-CoV) were ruled out as the cause.

The clinical signs and symptoms reported are mainly fever, with a few cases having difficulty in breathing, and chest radiographs showing invasive pneumonic infiltrates in both lungs. National authorities report that patients have been isolated and are receiving treatment in Wuhan medical institutions. According to the preliminary epidemiological investigation, most cases worked at or were handlers and frequent visitors to the Huanan Seafood Wholesale Market. The government reports that there is no clear evidence that the virus passes easily from person to person.

The following public health response measures were taken:

• A total of 763 close contacts including healthcare workers, have been identified and followed up and no additional cases of infection with the novel coronavirus have been identified;
• The Wuhan Municipal Health Commission carried out active case finding, and retrospective investigations of the current cluster of patients have been completed
• The Huanan Seafood Wholesale Market has been temporarily closed to carry out environmental sanitation and disinfection;
• Public risk communication activities have been carried out to improve public awareness and adoption of self-protection measures.

Source: https://www.who.int/csr/don/12-january-2020-novel-coronavirus-china/en/

 

An enlightening and inspiring experience visiting the underprivileged communities in Panama

It was an enlightening and inspiring experience visiting and witnessing success stories of student-led consulting projects in underprivileged communities (villages) in Panama. These projects are facilitated by Global Brigades, an international non-profit that uniquely implements a holistic model to meet a community’s health and economic goals. The projects include establishment of internationally recognized community-owned banks in some of the country’s most under resourced, rural communities, micro-financing ventures created and run by indigenous tribes, helping these ventures succeed by offering hands-on business solutions, and providing healthcare to underprivileged communities.

 

First-Aid, Rapid Response Drone in India

https://t.co/I2QUtW0g8i

— Anand Nair (@Dr_Nair) December 4, 2019

Africa's first drone 'Air Corridor’ - A partnership initiative by UNICEF and Zipline

https://t.co/A2mFRvqmsP

— Anand Nair (@Dr_Nair) December 4, 2019