Procurement 101COVID-19: 5 Procurement Issues Faced in the Healthcare Industry
The global pandemic has forced many industries to turn on their heads, healthcare specifically. Coronavirus (COVID-19) has sent shockwaves through numerous healthcare facilities including hospitals, clinics, longterm care facilities, dental offices, and more. With the influx of patients and the need to pivot and adapt to new environments, the healthcare industry has faced various procurement challenges this year including overspending, funding, and purchasing regulations, to name a few.
Five issues that have been faced by those in the healthcare industry include:
Issue 1: OVER SPENDING
As the effects of the pandemic began to unfold, supply chains of all kinds were put under great pressure. With such uncertainty on when supplies would come in, spend management, and scrambling for supplies became a reality for many.
“With COVID-19 becoming our reality, healthcare providers had to navigate the unfamiliar territories of supply negotiations, sourcing and logistics.
“The challenges: Lack of supplies. When available, they were costly with no price negotiation, and our quantities were capped. With many sales reps temporarily laid off, communication got complicated. We had no knowledge of what was actually available on the market and did not know their pricing. Time was wasted searching for supplies — some suppliers demanded paying upfront for the goods as opposed to invoicing, making our upfront costs higher. Deliveries were delayed, and tracking shipments was difficult. Some were even shipped out wrong. It was a logistical nightmare, with much overspending and panic buying. There was no established system in place.
“With patient care a priority, we found alternate routes: suppliers from abroad, bulk buying where possible. We focused on the essential items, finding multiple suppliers that could ship in a timely manner, and we turned to construction material suppliers for particular items. To keep communication simple, we focused on a maximum of two suppliers per item, and we picked some orders ourselves curbside — it made more sense logistically.
“This crisis has highlighted our supply chain shortcomings and our need for a pandemic proof reliable system.”
Dr. Heba AlDosouky, DDS at Blossom Smiles Dental
Issue 2: PRODUCT SHORTAGES
With the large disruptions across supply chains in response to COVID-19, it is no surprise that healthcare workers have been experiencing a shortage of products.
Albert Ho, Founder of Healthcare Heroes shares his struggles. “PPE such as N95 masks were dwindling, at one point we had only one week of supplies”. To make matters even more complicated, they were also unable to meet with vendors. “Due to policies, vendors were not able to come onsite, this resulted in a rapid shift to video conferencing. Some procurement was delayed.”
As users began migrating to video conferencing, there was also a shortage of peripheral supplies such as laptops, microphones and cameras. Typical delivery times of one week stretched to three months and there was no guarantee of these delivery timelines.
Ho explains his experience in dealing with these challenges:
“Prioritization of needs – In terms of devices, high priority areas were identified. Staff, if able and willing, were encouraged to use personal devices such as laptops, microphones and cameras.
“Rationing of supplies – The hospital began rationing supplies, for example, clinical areas would be allocated up to two masks per shift. If the mask becomes soiled, additional masks could be used. From a procurement perspective, almost all supplies are procured through Shared Services Ontario. I have heard of some hospitals procuring outside of these procurement channels.
“Conservation strategies – Most N95 masks are single-use, but sometimes the masks appeared clean and unsoiled. The hospital began the collecting of these masks, in single plastic bags in hopes that there may be a technological method of reprocessing them in the future for re-use. This strategy has since been stopped.
“Donations of supplies – Hospitals were faced with asking for PPE donations from the community, which has never been done before. In some ways, it brought the community together. But at the same time, it highlighted the unstableness of supply chains when hospitals were faced with dire shortages.”
Albert Ho, Founder of Healthcare Heroes
Issue 3: SHIFTING TO REMOTE CARE
While a large population of employees have begun working from home, the healthcare industry has been no exception. Individuals across the globe have made staying home a priority, creating new methods of receiving healthcare.
“Working in the health industry has been difficult in the past few months because of the pandemic. More patients are relying on us to have remote services as they cannot go outside. But this poses another question of value if they have a more serious problem that we cannot solve remotely. Those with chronic diseases can be managed well as they can have their own self-assessment equipment, but those who do not need this need to rely on a lot of information and diaries to be able to understand the problems they have been having. I hope that more work into remote services for all will be done soon so that we will not encounter this problem again.”
Dr. Giuseppe Aragona, General Practitioner & Family Doctor at Prescription Doctor
Issue 4: SHORTAGE OF FUNDING
Dr. Aragona also shares his struggles with funding over the last several months. As the healthcare industry relies heavily on government funding, it hasn’t been easy to keep up with demand during such hectic times. “Telemedicine has gotten really popular because of people isolating at home due to the coronavirus, so we have had to put more effort into making sure that everyone can be seen at this time. This has put a strain on our staff, as they have had to be around at all times of the day, in order to see all of the patients when they are most available. Going back to funding, with less people using our services, and us having to close the offices, we have struggled to be able to keep up with the demand as well as keep up with the time we need to give to everyone. We hope in time things will get better.”
Dr. Giuseppe Aragona, General Practitioner & Family Doctor at Prescription Doctor
Issue 5: COSTLY LOGISTICS
With the global impact that COVID-19 has had, it has been difficult for those in the healthcare sector to manage their restrictions in terms of logistics. These restrictions have resulted in additional spending.
“The biggest challenge has been logistics. The freight, especially from Asia and Europe, went up by five times in some cases, coupled with the fact that there was a severe shortage of space. On top of that, some countries put restrictions in place for critical items that could not be exported.
“A second issue was payments — almost all the manufacturers wanted cash upfront. We had to pay a premium to have shipments air freighted to improve the supply shortage by going to several manufacturers, again paying a premium price for the products.
“A step we’ve taken to counter this problem is get into the manufacturing of face masks ourselves so that we can further build our local supply chain, ensure a quality product and have seamless supply to our client base.”
Javed Ashai, President of AshconMed
With the complexity of the healthcare industry, procurement teams need to find new ways to adapt and respond to the challenges that they’re facing. Whether struggling with overspending, funding, intensive software or otherwise, implementing the appropriate procurement software can eliminate these obstacles. The proper software such as ours at Tradogram won’t only simplify your procurement process, but it will also help you navigate the shift in the healthcare industry with ease. Many companies in the healthcare sector have selected Tradogram for its ease of use among other advantages. Learn more about how Tradogram’s procurement software can help transform the healthcare sector today!
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