Lessons in disaster and demand planning

Sept. 28, 2020

In last month’s issue of Standard Practices, we explored the growing interest (if not imperative) for demand planning in the healthcare supply chain. Given the importance of standards in this pursuit, we will periodically explore this topic through interviews with key industry leaders. This month, I had the opportunity to speak with Donna Van Vlerah, Senior Vice President of the Support Division for Parkview Health in Indiana about her organization’s work in this area, especially around disaster planning.

A retired United States Marine Corps logistician, Van Vlerah takes a very deliberate approach, incorporating key process improvement methodologies such as DMAIC, which stands for Define, Measure, Analyze, Improve and Control. In the context of emergency or disaster planning, defining the problem included an assessment of potential vulnerabilities faced by the healthcare system and its respective facilities. Such vulnerabilities – both imminent (e.g. a snowstorm or tornado) and visible (e.g., a pandemic) – are prioritized based on their probability and severity (measured by the magnitude minus the ability to mitigate).

Imminent threats are considered much more probable, but their magnitude is usually limited to a specific geographic area and with a shorter duration compared to a pandemic, which can last a couple of years. Most regulatory requirements are geared to the former. For example, The Joint Commission requires hospitals to keep a 96-hour supply of products required to combat their highest threats. Clearly 96 hours is not enough of a safety stock to combat pandemics, which usually last a couple of years. But even if a health system were to build out a year’s supply, it would not have been enough based on prior utilization levels.

Van Vlerah explains: “Our N95 usage was much lower prior to COVID-19, with the respirators used mostly in patient isolation rooms. With the surge, the need was much higher. Demand planning played a significant role in Parkview Health’s preparedness and response to the COVID-19 situation.”

Solving for a problem of this magnitude, Van Vlerah requires foundational capabilities that can also be applied to crises of less scale and even to demand planning in general. Below are some of Van Vlerah’s recommendations for those who wish to shore up their capacity to respond to emergencies.

Create supply lists by disaster type

While both Ebola and COVID-19 require personal protective equipment (PPE), the types of PPE required differed based on the way the disease is spread. In the same way, there are differences in the supplies needed to support a response to a tornado compared to a pandemic. The good news is, numerous organizations, from the World Health Organization to the Occupational Safety and Health Administration, create such essential lists that health systems can use as a starting point. Van Vlerah recommends bringing the relevant experts to the table to customize the lists for your organization. For example, to address COVID-19, Parkview enlisted the help of respiratory disease and infection control specialists.

Standardize on commodities/identify substitutes in advance

While standardization is always a good idea in order to reduce both variation and costs, it is even more critical for emergency preparedness. By standardizing on products and identifying acceptable substitutes in advance, hospitals can help avoid some of the concerns expressed by clinicians when forced to use alternative products in the wake of shortages. Ideally those substitutions, if not by brand, then by relevant attributes, can make it easier to source and less stressful for clinicians. Health systems should also develop reference lists with alternative vendors or supplies identified if traditional channels dry up.

Establish emergency access and usage protocols

Preplanning around protocols for how products are accessed and used can also help minimize waste during times of critical shortage. As Van Vlerah explains it, if N95 respirators were used during the pandemic like they are in normal times, e.g., donned and doffed and tossed each time a clinician enters a patient room, the health system would have run out very quickly.

Critical supplies also need to be stored centrally versus potentially hoarded at every facility, with pre-determined quantities that can be accessed in an emergency. Additional quantities can be requested to meet extraordinary circumstances, but require additional authorization steps.

Van Vlerah warns that centralizing stock can drive down inventory turns. She recommends prioritizing products with longer or no expiration dates.

Plan centrally/implement locally

Parkview Health does its demand planning and emergency preparedness at a system level, but it makes both the plans and visibility to critical inventory levels accessible by each facility at the local level. That way, individual hospitals can respond directly to Joint Commission requests for information on their compliance with emergency preparedness requirements. Individual facilities should also have a say in the development of the disaster response plans.

Hardwire emergency stocking practices and par levels

Once the critical supplies are identified based on the type of threat, Van Vlerah advises establishing appropriate stocking practices, including location (e.g., centrally or locally managed) and PAR levels based on actual usage or anticipated surge demand. At Parkview Health, these emergency protocols are hardwired into the system, enabling the emergency protocols to be activated in a matter of hours.

Plan based on the unique characteristics of supplies

Regardless of whether you are demand planning for a disaster or for the normal course of business, Van Vlerah emphasizes the need to understand the unique characteristics of different supplies.

  • What are your anticipated usage levels (normal and surge)?
  • How critical are the products and for what use(s)?
  • How difficult are they to acquire?
  • Are there suitable alternatives (vendors or products)?
  • What are the vendor’s lead times, fill rates?

Van Vlerah believes Parkview Health’s investment in a central distribution center (DC) has been a foundational capability to support many of the practices outlined above. But a DC is not feasible for all organizations. In such cases, hospitals and healthcare systems can partner with peers or distributors to share in the acquisition, management and allocation of critical resources in the event of an emergency. But just like so many other things, those partnerships and that planning need to occur now, long before the next disaster rolls into town.

About the Author

Karen Conway | CEO, Value Works

Karen Conway applies her knowledge of supply chain operations and systems thinking to align data and processes to improve health outcomes and the performance of organizations upon which an effective healthcare system depends.  After retiring in 2024 from GHX, where she served as Vice President of Healthcare Value, Conway established ValueWorks to advance the role of supply chain to achieve a value-based healthcare system that optimizes the cost and quality of care, while improving both equity and sustainability in care delivery. Conway is former national chair of AHRMM, the supply chain association for the American Hospital Association, and an honorary member of the Health Care Supplies Association in the UK.