Supply chain woes trigger shortages of critical medical devices
Eying the offshore traffic jams at ports and supply chain problems, California hospitals report delays and shortages in medical supplies. Some patients are forced to reuse medical tubes.
When Henry Genung was four months old, doctors cut a hole in his windpipe and inserted a tube to help him breathe. Born with a rare genetic mutation that blocked his upper airway, Henry, who is now 18 months old, will need the tube for several more years.
For three months, Henry hasn’t had a new rubber tracheostomy tube even though doctors recommend that they be replaced weekly to reduce the risk of infection. Instead, Henry’s parents have resorted to soaking his used tubes in hydrogen peroxide and boiling them for five minutes. Their medical supplier and doctor’s office told them they don’t know how soon new supplies will be available.
“It’s an ongoing saga of delayed shipments,” said Myah Genung, Henry’s mother, who lives in Los Angeles with her husband Dillon and son.
With upwards of 80 container ships languishing off the coast of Southern California, patients and medical suppliers are worried that stories like Genung’s will become increasingly common.
The logjam at the ports of Los Angeles and Long Beach — which handle 40% of all waterbound imports to the U.S. — has triggered shortages of everything from computer chips to paper products to kitchen appliances, and drawn the attention of President Joe Biden. But, while many people are worrying about delayed Christmas gifts, many Californians are grappling with shortages of lifesaving medical supplies.
California hospitals say medical supplies are more difficult to acquire now or are taking much longer to be delivered. Although the Hospital Association of Southern California says no one has reported any acute shortages yet, administrators are concerned about the delayed shipments that are anchored off the coast.
Experts say the shortages and inflation will drive health care costs up, increasing insurance premiums. In addition, some medical device suppliers are considering cutting off sales to patients on Medi-Cal, the state’s insurance for low-income people, as they look for ways to reduce costs.
Where are the medical supplies?
Port gridlock is the latest chapter in a long saga of medical supply chain disruptions during the pandemic. Demand for personal protective equipment and respirators skyrocketed globally at the same time that overseas manufacturers temporarily closed to reduce the spread of COVID-19 among workers.
Last winter, hospitals desperate for bed space were sending less-severe COVID-19 patients home on supplemental oxygen. “We couldn’t keep oxygen concentrators on the wall, couldn’t keep them in inventory,” said Terry Racciato, who owns a durable medical equipment supply company in San Diego. “The shipping backlog prevented them from getting into the country, much less getting to patients that need them.”
Now, specialized equipment like walkers, canes, wheelchairs, crutches, syringes, needles, catheters, surgical gloves, feeding tubes and suction canisters are increasingly hard to come by.
In September, the FDA announced nationwide shortages of ventilators. Specimen collection tubes also have been in short supply since the summer.
Compounding the issue, hospitals, which are admitting above-average numbers of patients who delayed care during the pandemic, are trying to stay ahead of any potential winter COVID-19 surge.
“With increased patient volume and supply logistic issues, we are concerned with the constraints placed on supply availability,” said Amy Ritzel, a spokesperson for Prime Healthcare, which operates hospitals throughout the state.
Prime Healthcare has been able to shift supplies as needed between its hospitals, but has joined other health systems and the California Chamber of Commerce in requesting help from Gov. Gavin Newsom and the Legislature to speed up movement of medical goods.
“We have a number of hospitals and health care suppliers saying ‘Hey we’ve got products sitting out there.’ So they’re pretty concerned about that issue in particular,” said Leah Silverthorn, policy advocate for CalChamber, which sent the letter to Newsom and the Legislature.
Increased purchasing of all consumer goods coupled with labor shortages, outdated port infrastructure, and prior disruptions to shipping and manufacturing early in the pandemic have culminated in the offshore traffic jam.
While the two ports have reduced the backlog of idling containers by 26% in the past three weeks by threatening steep fines, more than 40,000 containers have sat at the terminals for at least nine days. Before the pandemic, the average wait was less than four days, according to port operations reports in Los Angeles and Long Beach. Some ships have been anchored off the coast for more than 30 days while they await a spot to dock.
“There’s some concern about a winter surge of COVID and having access to those containers,” Silverthorn said.
CalChamber is working with its nearly 1,000 health care members to track down the container numbers for delayed shipments and identify the ships.
“It’s kind of a bottleneck of data right now,” Silverthorn said. “The data lies with each link of the shipping supply chain, and so trying to aggregate it in a convenient way is challenging.”
Currently, no one knows how many containers may be carrying medical supplies or the quantity of goods waiting offshore. Experts say the lack of data is a systemic problem in the supply chain that makes it nearly impossible to prioritize critical health care devices. No information system connects the manufacturers, shipping companies, port terminal operators, suppliers and buyers.
“This is already 2021, but shipping companies cannot give an accurate hour-by-hour estimation about when goods will arrive or where they are,” said Tinglong Dai, a professor of operations management and business analytics at Johns Hopkins University who specializes in health care operations.
Dai has spent the 20 months of the pandemic advocating for supply chain transparency, particularly when it comes to medical supplies.
“What they are producing is very important to public health,” he said, “and public health authorities have no idea exactly how much inventory we’re going to have if and when similar crises will arise in the future.”
In response to the letter to Newsom and an earlier executive order, GO-Biz, the governor’s Office of Business and Economic Development, and other state agencies have been working to identify sites that can be used to store empty, abandoned and slow-moving containers that are exacerbating the backlog, said GO-Biz spokesperson Heather Purcell.
“This will free up crowded dock space to move integral medical supplies. Additionally, GO-Biz is directly in coordination with a terminal operator to speed up the movement of medical supplies,” Purcell said.
However, Purcell said the state has no way to identify medical supplies other than consulting with individual buyers. Even then, the contents of specific containers are frequently unknown.
Shortages and delays
Cedars Sinai in Los Angeles has experienced supply chain problems acquiring catheters, syringes and blood collection tubes, communications director Duke Helfand said. However, the hospital has been able to rely on pre-existing reserves and alternate suppliers to avoid any impact on patients.
Similarly, Community Medical Centers in the Central Valley have experienced periodic shortages of computers, suction canisters and masks during the pandemic, according to Lucky Malhi, vice president of supply chain management. His team has worked round-the-clock to secure supplies through alternate distributors.
But patients requiring supplies for home use, like the Genungs’ son Henry, typically don’t have the option to find alternate suppliers, so they have felt the scarcity much more sharply.
Myah Genung said she has turned to Facebook groups where parents of “trach babies” share extra supplies. She has snagged humidifying filters for Henry’s breathing tube through social media, but more often than not, there are more people seeking supplies than there are extras.
“We’re just having to make do the best we can,” she said.
More than 100,000 tracheostomy procedures are performed annually across the country. Racchiato, whose supply company, SpecialCare, primarily distributes directly to patients, said replacement tubes are one of the most difficult things to acquire right now.
“There are people who are trying to sterilize (the tubes) themselves and reuse them. They’re risking serious infection because new supplies aren’t available,” Racciato said.
Most tracheostomy tubes are only supposed to be used once, said Dr. Maggie Kuhn, associate professor of otolaryngology at UC Davis Health. Reusing the tubes can cause serious problems, including increased risk of infection and device malfunctioning.
“We have observed complications from this practice which can be life-threatening, including mucous plugging and airway trauma,” Kuhn said.
Other devices like oxygen concentrators face months-long delays compared to typical delivery times of one to two weeks.
Complicating matters, one of the largest manufacturers of continuous positive airway pressure, or CPAP, machines recalled millions of devices in June and is reserving its inventory for patients that need replacement machines. As a result, Racciato said she has at least 1,000 patients diagnosed with sleep apnea who have been on a waiting list without treatment for five months.
Prices increase while access decreases
Inflationary pressure on the medical supply market also has some suppliers concerned about how long they can stay in business. Scarcity of raw materials and logistical challenges along with the port backlogs have steeply driven up the cost of manufacturing and shipping, creating a volatile market.
“(Shipping) containers have gone from $2,000 for rental to anywhere from $15,000 to $20,000 for the same container,” said Steve Yaeger, a Los Angeles based medical supplier who specializes in respiratory equipment.
Since the beginning of the pandemic, Yaeger said his overhead has increased 25%.
“When you see the cost of goods go up like that, all of a sudden you’re figuring out, ‘OK are we even going to make any money this year?’”
Experts say inflation among medical supplies will result in higher health care costs for patients as hospitals and other providers struggle to maintain adequate profit margins.
William Padula, a senior fellow at the USC Schaeffer Center for Health Policy & Economics, said the “supply chain disaster” will result in hospitals negotiating for higher reimbursement rates with insurers and patients paying higher premiums.
“The natural consequence on the consumer side is…premiums will go up,” Padula said.
Already, the Centers for Medicare and Medicaid Services announced the highest premium increase in the program’s history for Medicare Part B and higher deductibles for other aspects of the program, in part due to increased utilization in the past year.
“In their statement, Medicare blamed the increase of premiums on COVID and the cost of that new drug for Alzheimers, which is expected to take off, but COVID is very broad. It really is about the supply chain,” Padula said.
Although it’s too soon to tell how much premiums will increase across the board, historically commercial insurers have followed Medicare’s lead.
“That gives a lot of commercial payers a pass to increase by a similar amount at a minimum,” Padula said.
The resultant cost hikes have also forced small and mid-sized suppliers to rethink which patients they can afford to serve, potentially leading to decreased access for those with Medi-Cal or Medicare, which have fixed reimbursement rates.
California has temporarily increased these reimbursement rates for the duration of the COVID-19 public health emergency, which is set to expire at the end of March. Beyond that, providers aren’t sure how long they can hold on.
Ron Biasca, a medical supplier based in Eureka, said increased costs are forcing his company to reassess what services it provides to Medicare and Medi-Cal patients.
“We are evaluating all entitlements right now to look at what we’re making money on. We are going to have to make some hard decisions and just not accept the insurance payment,” Biasca said.
Roughly one-third of all Californians rely on Medi-Cal for health care and frequently face long wait times and difficulty finding doctors and other providers who will accept their insurance. And the out-of-pocket costs are inaccessible even for people with private health insurance.
Genung said she has tried to purchase the tracheostomy tubes her son needs online but they cost between $300 to $600 each. “You would be spending thousands and thousands of dollars a month just to purchase it yourself,” she said.
Reusing the tubes fills her with worry. Henry’s condition requires him to be immunosuppressed, and reusing tubes increases the risk of infection or breakage as the equipment wears down.
“It’s not foolproof because you’re not in a sterile environment. You’re at home, you’re in your kitchen, doing your best to make it work,” Genung said.
A week ago, Henry was admitted to Children’s Hospital Los Angeles with pneumonia. Doctors told his parents there’s no way of knowing if the infection was caused by the reuse of tubes.
The only small silver lining is that the hospital gave Genung two new tracheostomy tubes, enough to get Henry through another month.