The new program allows Premier, Ballad Health and other health systems to invest in “innovative” business models, Ballad said, including partnering with manufacturers that can help fulfill demands for medical supplies at risk of shortage.
The system said initial areas of focus will include domestic suppliers of personal protective equipment and “geographically diverse” manufacturers of medical commodities experiencing a shortage because of the novel coronavirus (COVID-19) epidemic.
“Twice this year alone, Ballad Health has been impacted by the unreliability of the supply chain from China,” Ballad Health Chairman and CEO Alan Levine said in the release. “An interruption in our services took place in January due to a Chinese manufacturer not demonstrating compliance with (U.S. Food and Drug Administration) standards, thus rendering those sterile gowns unreliable and unusable. And then during the rise of COVID-19, the world has seen the impact of this overreliance on the current supply chain.
“Ballad Health is joining leading national health systems to use our purchasing power to break this cycle and fund American and other reliable alternatives. Not only does this create more diversity in the supply chain, but it also helps our workforce retain the supplies they need to stay safe, healthy and able to provide quality care for the patients that count on us.”
“One of the major lessons of the COVID-19 pandemic is that the current U.S. supply chain overleverages foreign markets for many vital medical products, which can inhibit our ability to manage through a pandemic or another natural disaster,” Premier President Michael Alkire said in the release. “Premier has been sounding this alarm for years, and we have taken steps to insist that manufacturers have contingency plans in place, as well as a diverse supply chains for medical products.
“Despite this, it’s clear we must do more, which is why we created this program to find creative and meaningful ways to rebuild U.S. manufacturing and create healthy markets for commodity goods.”
Ballad said medical products important for the daily operations of health systems are largely sourced overseas, adding that about 80% of all PPE supplies are sourced from Southeast Asia.
“While we clearly understand that we need global diversity and domestic sources for supplies, the United States has historically been a high-cost region for manufacturing,” Alkire said. “This program aims to alleviate some of this tension, supporting domestic or other manufacturers with capital and long-term contracts that will allow them to offer competitive price points.
“It’s truly a win-win strategy — where we get a broader array of quality products at a fair price, all while rebuilding domestic manufacturing and insulating ourselves from risk and disruption.”