As global trade uncertainty intensifies, health systems should take steps to minimize the effect of this volatility on their medical equipment inventory. The evolving policies of the United States and its trading partners could strain global supply chains and make acquiring or maintaining medical devices more difficult and more expensive.
While the impact of tariffs is currently the question at the forefront of healthcare executives’ minds, health systems can take proactive steps to protect themselves from supply chain disruptions of all sorts—including material shortages, labor strikes, or public health emergencies. Any of these scenarios could lead health systems to face higher costs and delayed access to supplies and parts, which can impact hospital efficiency and patient care.
To prepare for any challenges that may occur, health systems must work to diversify their supply chain, implement data-driven decision-making, and extend the lifespan of medical devices with proactive maintenance & management. These steps can help health systems mitigate the financial impact of tariffs or supply chain disruptions while ensuring access to high quality care.
Potential price increases and availability of quality parts
While tariff policies are changing frequently by country, category, and rate–device components, including electronics or batteries, and metals used in medical devices are particularly vulnerable.
Avoiding price increases is a top concern for many organizations across industries. As businesses attempt to shift sourcing to avoid tariffs, there is also a risk of part availability issues. In addition, quality concerns could arise when suppliers change materials or manufacturing processes to dodge tariffs.
Proactive strategies for supply chain resilience
Developing and implementing risk-mitigation plans will help health systems best navigate unpredictability. A critical first step is diversifying the supply base. Health systems should ensure they are not dependent on a single supplier but have several sourcing options including a domestic alternative. The most resilient organizations will also leverage scale to manage disruptions and negotiate lower pricing.
These are often challenging goals for individual health systems to achieve. A McKinsey & Co. survey of health system executives found less than less than half had dedicated personnel to engage with frontline staff about the supply chain.
Working with a trusted partner can better protect a health system from supply chain disruptions or price fluctuations. A partner with long-term supplier relationships will be more apt to secure priority access to essential, quality parts and components—making sure health systems have what they need before it runs out. An experienced partner will also be able to utilize its size to negotiate fixed pricing or bulk purchase agreements to help health systems control costs during periods of volatility.
Seeking a partner that offers contracts with fixed and transparent pricing will also create financial predictability for health systems, making it easier to budget and avoid unexpected price hikes.
Data-driven decision making
Having accurate inventory visibility and a deep understanding of device utilization & lifespan can provide health systems with valuable insights into their current and future needs. These insights will allow executives to make data-driven, informed purchasing decisions before a need becomes emergent.
Predictive technologies also allow organizations to prepare for maintenance or replacement needs in advance, ensuring critical supplies and parts are ordered early and reducing the likelihood of shortages or equipment downtime.
Partnering with an organization that has technology to analyze industry utilization data and trends can further empower a health system to stay ahead of potential disruptions. These advanced technologies and analytics give decision-makers a clear understanding of the broader supply landscape and enable them to anticipate and prepare for potential risks before they affect hospital operations.
Extend the lives of existing devices
Prolonging the lifespan of existing devices is essential for strengthening a health system’s resilience against supply chain crises. If a health system manages and maintains its devices properly, they will last longer, reducing the need for repairs or replacements.
Many health systems lack visibility into their inventory, often underestimating what equipment they have. Some organizations don’t have a full understanding of how often their devices are used. Establishing a comprehensive account of a hospital’s inventory and utilization rates is a vital step toward optimizing the value of devices and extending their lifespans.
Predictive work systems and AI-powered technologies can also help clinical engineering teams proactively manage preventive maintenance, address potential issues before they arise, and guard against cyberthreats. These steps can often keep devices safe and functional beyond the OEM-designated end-of-life, which leaves health systems better positioned when supply chain problems occur.
In recent years, the unpredictable nature of trade policy and the widespread disruption of COVID-19 have emphasized the need for strategies that ensure clinicians have what they need to deliver excellent patient care.
Health systems can safeguard their operations and financial stability by diversifying their suppliers, leveraging scale, and using technology & data to forecast trends and demand. By taking a proactive approach and optimizing their inventory, health systems will be able to withstand unforeseen events and price fluctuations. Health systems that implement these measures will be better equipped to maintain continuity of care and financial stability regardless of external pressures.
Editor’s Note: Kelley Jacobsen is senior vice president of supply chain and shared services at TRIMEDX. In this role, she is responsible for strategic sourcing, centralized procurement, digital system & data transformation, service strategy, and execution. In addition, Kelley leads the company’s supply chain strategic direction, optimization of service strategy, as well as business and technical training curriculum and programs for TRIMEDX University™.