“Everybody is worrying” about medical-gear supply, Premier CEO DeVore says
The American health care industry is facing a shortage of protective medical gear as the coronavirus rapidly spreads across the country, Susan DeVore, CEO of Premier Inc., said on a Bloomberg podcast this week. Charlotte-based Premier provides purchasing, supply and other services to 4,000 hospitals and 175,000 non-acute care providers. According to DeVore, there’s essentially a two-week inventory of protective attire, masks and gowns.
“What we’re seeing is everybody is worrying about the current supply. The demand is three or four times what normal demand would be,” DeVore said. “Because we have a fragmented system, what we’re hearing is federal, state governments and private health care systems [are] really trying to figure out how to work together so as not to hoard supplies and to be able to get the supplies where they’re needed.”
More than 90% of Premier’s health care systems are concerned about the current supply, demand, and their ability to protect their workers while caring for the sick, especially given the virus’ ability to spread, she says.
Coupling a continued spread with America’s dependence on China and Southeast Asia for many products creates the perfect storm, DeVore says. “We’ll have increased demand for these products and we’ll have limited supply of the products because they’re coming from places that have shut down that exportation.”
“So we as a U.S. health care industry have to figure out how to optimize the use of the supplies we have. We’ve got to follow the [Center for Diseases Control] guidelines to conserve it,” DeVore says. “And we’ve got to figure out how we’re going to get from what is a normal 25 million masks used a year to a supply of 500 million. So that is the magnitude of the challenge that we have.”
The growing outbreak will also lead to long-term challenges for the pharmacy supply chain, nursing homes and non-acute care providers, she says. But the short-term issues are focused on equipment to protect health care workers from coronavirus.
“We’re trying to slow or suppress the the spread of this. And at the same time, Premier is trying to unite all of these health care providers and work with the federal and state governments to to really try to ensure we have adequate supply of the products that are needed.”
But it’s not just hospitals that are short on protective gear. An additional Premier survey published March 16 found 87% of responding senior living facilities aren’t receiving necessary quantities of protective equipment they ordered, leaving the supply lacking. Nearly 30% reported they have no masks on hand at all, and about 43% of senior living facilities don’t have consistent ordering histories for protective gear, leaving them without channels for purchasing supplies.
Reacting to the stark results, Premier is urging the government to utilize President Trump’s executive order to expand domestic production and the company will assist facilities having difficulty obtaining supplies.
Premier shares have increased about 10% since the beginning of the month, compared with a nearly 20% drop in the S&P 500 Index in that period.