A continuous scramble for supplies evolved quickly

Hospital suppliers typically purchase inventory through established buying groups, and the ebb and flow of business is predictable. Then came COVID-19. A sudden need to procure large amounts of PPE to supply hospitals, health departments, clinics, long-term care facilities, and everything in-between was thrust upon the nation. A continuous scramble for supplies evolved quickly – with the traditional routes often found to be lacking.

When PPE came on the market, it was often gone within minutes or hours. Some organizations hired staff to do nothing but scour the internet looking for opportunities to purchase.

Cutting the Red Tape

Hospitals usually have specific vendor requirements and purchasing processes.A department usually needs to acquire a purchase order, which may involve various levels of administrative approval. After that, the hospital must have all the vendor information, including business and tax documents and insurance.THEN an order may be placed, with specific instructions for delivery, invoicing, and payment.Hospitals then process invoices and usually pay within 30 to 45 days. This description is actually a simplified version.

When PPE came on the market, it was often gone within minutes or hours. Some organizations hired staff to do nothing but scour the internet looking for opportunities to purchase. Successful purchasers often had to pay inflated prices, and quickly – with no vetting of vendors and no prior authorization. The organizational model of purchasing did not fare well in a bidding war.

Purchasers often had to pay inflated prices, and quickly – with no vetting of vendors and no prior authorization.

Connecting the Dots

How could we make business purchasing for PPE more like what an individual does when a need arises? Could there be an eBay for PPE? While not as big as eBay, or Amazon, many PPE procurement networks have popped up over the past months of the pandemic. One example is the state of Michigan, and another popular platform is driven by a non-for-profit. These platforms basically perform a matching service between needed supplies and suppliers. Added benefits include vendor vetting, reviews, and reports of fraudulent activity, and multiple payment methods.

PPE procurement network benefits include vendor vetting, reviews, and reports of fraudulent activity, and multiple payment methods.

Consolidation

While these different procurement networks have tremendously improved PPE buying, there is still room to consolidate and standardize practices. Federal programs suffered from the same issues as individual purchasers.

Hospitals and other organizations may still need to check several different platforms continuously to procure what is needed. Vendors that have PPE will often try to find the places where they can sell at the highest prices, or that have the least competition. The developments over the past few months with COVID-19 have indicated a need for a one-stop shop for PPE.

A third-party platform could perform the important tasks of vetting vendors, mediating payments, and handling logistics and customer service issues.

Important innovations for procurement are on the horizon

A third-party platform could perform the important tasks of vetting vendors, mediating payments, and handling logistics and customer service issues. Quantities available could be updated as orders are processed, allowing small and large buyers the same opportunities. Organizations can set up payment methods in advance, allowing their typical business processes to remain intact without delaying purchases. The marketplace supply and demand can determine pricing ups and downs organically.

Pieces of the ideal solution for this important problem are in practice already – and rapidly improving. As COVID-19 wears on, the challenges of buying and selling PPE and getting it to the front lines of healthcare are improving. If disparate platforms and groups can come together for a more cohesive system, then further improvements can possibly be made. Important innovations for procurement are on the horizon, and hopefully the frustration and barriers to finding PPE will be a thing of the past.