By Stan Chambers on June 25, 2020 / blog, COVID19, Foundation, NCHA, News Releases, Strategic Partner
As diagnosed COVID-19 cases rise, health care providers continue to face high demand and low supplies of personal protective equipment (PPE), including masks, gowns, and gloves.
The supply chain has been challenging and inefficient, especially for smaller and rural hospitals and post-acute care facilities that may lack the staffing capacity and contacts to locate and vet PPE suppliers. They may also have difficulty affording current pricing levels: N95 masks that typically cost approximately a dollar, now each have been priced as high as $20.
To keep adequate supplies of PPE on hand, individual healthcare providers operating with lean budgets are making fast buying decisions, sometimes bypassing typical vendor vetting processes. This is concerning when inferior-quality products could put the health and safety of patients and staff at risk.
As the pandemic continues with no clear end in sight, healthcare providers need a better way to discover verified sellers that can offer access to quality supplies and equipment at the best possible prices.
Digital Platform Brings Order to PPE Purchasing Chaos
To help overcome some of these challenges, NCHA Strategic Partners (NCHASP) for-profit subsidiary of the North Carolina Healthcare Association, invited its member hospitals, health systems and other types of healthcare providers to submit their supplier information, which resulted in a shared resource list. NCHASP is a trusted resource to many of the state’s health providers for referrals to workable, cost-effective solutions.
Following basic supplier vetting, which included asking for W-9’s, NIOSH certifications, FDA certificates, pricing and product specifications, NCHASP organized group buys through a hub-and-spoke model. But with the healthcare association having more than 130 members, many of which are multi-campus organizations, and other healthcare trade associations’ numerous members, it was unclear who would be financially responsible for items and how they would be distributed.
The first strategic purchase was for masks. The Strategic Partners team worked with a reputable distributor and a member hospital in western NC to assist with the ordering. NCHASP soon realized all the healthcare facilities participating in the collaborative buy had to create accounts with the distributor. The process would be cumbersome given the potential number of healthcare providers participating. The buy was successful, but logistically complex. The question became, “how does NCHASP create simple ordering, payment and distribution components to complement the existing hub-and-spoke model*?”
Enter Robert (Bob) Seligson, executive vice president and chief executive officer of the North Carolina Medical Society. Seligson introduced NCHA Senior Vice President Jody Fleming to the founders of PPE.Exchange, a blockchain-enabled digital marketplace with a user friendly interface. PPE.Exchange offered to serve as a central supply ordering and payment platform as a pilot initiative. They were able to curate high quality PPE and work with NCHASP to place multi-party orders and access bulk pricing.
NCHASP handpicked vetted suppliers for the PPE.Exchange platform. PPE.Exchange verified that the suppliers had enough inventory to handle large orders. Any North Carolina healthcare organization that waned to participate could create an account in the platform and indicate how they wanted to pay for orders.
Russell Decker, Cofounder of PPE.Exchange had this to say, “PPE.Exchange saw an opportunity to bring next generation technology to help front line workers who needed it most. The partnership with NCHA has been outstanding and we are looking forward to continued collaboration.”
Through NCHASP’s coordination, multiple healthcare facilities came together and placed large orders for specific items, including isolation gowns. PPE.Exchange created a single purchase order with multiple shipping locations. NCHASP and PPE.Exchange did not charge participating organizations any fees for their services – a relief for financially pinched care providers.
In addition to health systems and hospitals, participants in the group purchases have included long-term care and assisted living facilities, home health organizations, hospice and palliative care groups, medical and dental practices — anyone who sees patients. Other state healthcare associations have contacted NCHASP regarding how they can replicate the process.
“This has been a very successful pilot, taking pressure off hundreds of North Carolina healthcare providers because we are doing all the supplier research, vetting and collaboration for them and PPE.Exchange provides an easy-to-use digital platform,” Fleming said. “It’s something they don’t have to think about – they can get items they need with just a few clicks.”
Fleming expects the program to continue into 2021 and potentially beyond. To learn more, visit https://www.ncha.org/strategic-partners/
* Hub and spoke model refers to a distribution method in which a centralized “hub” exists. Everything either originates in the hub or is sent to the hub for distribution to consumers. From the hub, goods travel outward to smaller locations owned by the company, called spokes, for further processing and distribution.
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