[Johannes]

Hi everyone!

The (temporarily) contained crisis has shown how ill-prepared many countries were for supply bottlenecks – for example, with protective masks or medical equipment.

What experiences have you had? Do you have suggestions as to what the main areas of concern should be?

[Ismail Umit]

The pandemic has thrown into sharp focus the shortcomings of public-private healthcare procurement systems.This crisis presents an opportunity to learn and to reshape these systems in time for the next emergency.The COVID-19 crisis has highlighted the case for improving the governance of procurement of critical supplies such as ventilators and personal protective equipment (PPE). Over the course of this emergency, in which global supply chains have been disrupted – initially by the Chinese lockdown and subsequently by a surge in demand from all affected countries – authorities at all institutional levels and private healthcare providers have competed with each other to maintain their supplies of healthcare services.In many nations, even long before the pandemic, public healthcare budgets were under stress – and this has pushed public and private healthcare providers to find ways to balance growing demand against existing resources. The procurement of medical devices, technology and pharmaceutical products, the prices of which have been increasing above the level of general inflation for years, has been a principle focus of such policies, together with the general shift from hospital acute care towards outpatient services that are better able to address non-transmittable and chronic diseases.

1. Lack of preparation. Despite the existence of pandemic plans at the national and regional levels, the system was not prepared to face the surge in demand. Commoditized products such as PPE, that are widely available in normal times, proved to be bottlenecks. Common procurement management practice would recommend stockpiling in this case. However, as the US example shows, even strategic reserves are not an answer because of the problems of allocating materials between competing demands and the sheer cost of maintaining such a system over time. Contractual remedies also proved to be illusory, as many multinational firms found it impossible to fulfil their obligations in the presence of an international supply shock. 

2. Lack of coordination. The lack of coordination between national and regional levels has placed stress on procurement, production and delivery systems. Government authorities, private companies, donors and local hospitals were all trying to place orders at the same time. In this context, the actual level of need for medical supplies was not clear.

3. Procurement centralization was structured as a top-down cost-cutting initiative, thus hampering public-private collaboration. 

[Maria]

Interesting points! 

You mentioned that countries were insufficiently prepared (despite the existence of pandemic plans) – but of course, the situation in a global epidemic is different from the regular case. However, the question remains whether we have learned from this – it seems quite possible that a second wave will follow. 

Do you have the feeling that this has already been thought about, or is now being thought about in terms of stockpiles?

[Sandra]

Dear Maria,

I think it should have been plain to European countries that critical health supplies cannot be left to other countries, especially after what we have experienced. I hope that this learning will indeed serve at least to prepare us to reduce our external dependence on critical supplies to face a second wave or future pandemics to come.

Best regards,

Sandra Rueda, MD