Relief package won’t help with shortages
The billions of tax dollars headed for hospitals and states as part of the $2.2 trillion coronavirus response bill won’t fix the problem facing doctors and nurses: a critical shortage of protective gowns, gloves and masks.
The problem isn’t a lack of money, experts say. It’s that there’s not enough of those supplies available to buy. What’s more, the crisis has revealed a fragmented procurement system now descending into chaos just as demand soars, The Associated Press has found.
Hospitals, state governments and the Federal Emergency Management Agency are left bidding against each other and driving up prices.
For more than a week, governors have pushed back against administration assurances that supplies are available now, bitterly complaining to President Donald Trump that there’s no coordination.
“It’s pretty much every state for itself,” said Virginia’s secretary of finance, Aubrey Layne, who is deeply involved with his state’s effort to buy medical supplies.
Masks that were priced at $2.50 a week ago are now being quoted as high as $9, he said, and suppliers make clear that there are “plenty of people out here” looking to buy, even at the high prices.
“There is a lot of opportunism going on,” Layne said.
Even if someone took some of this money and built the equipment to make masks, gowns and gloves, it would not solve the problem because none of the materials are made in the United States. That includes latex and rubber, largely from Southeast Asia, as well as textiles used in surgical gowns that can repel fluids but are easily disposable.
“The suppliers that provide the raw materials needed to make such items have to increase their capacity in order to deliver more materials to manufacturers, which could take time and may not be feasible if the suppliers are located in other parts of the world that are currently crippled by the coronavirus,” said Kaitlin Wowak, an assistant professor at University of Notre Dame business school who specializes in analytics and operations.
“The coronavirus is spreading at an unbelievable rate so you can only expect the demand for personal protective equipment and other medical supplies to follow the same trajectory, which is scary given that there is already a massive shortage of such items at hospitals,” said Wowak.
Doctors and nurses in hot spots like New York and New Orleans are caring for feverish, wheezing COVID-19 patients without adequate masks, gloves or gowns.
Can the $100 billion carved out for hospitals in the stimulus package solve that?
“It is not about throwing money at this problem,” said Lisa Ellram, a professor of supply chain management at Miami University of Ohio.
Just like consumers who today wander past empty shelves in the toilet paper aisle, state governments and hospitals are finding their suppliers’ warehouses are bare.
The AP reported last week that imports of critical medical supplies were plummeting due to factory closures in China, where manufacturers had been required to sell all or part of their goods internally rather than export to other countries.
Now that bottleneck has tightened as the pandemic sweeps through the world, shuttering potential backup factories from one country to the next. Many manufacturers have been ordered to shut down or limit production throughout Southeast Asia and Latin America, including in India and Mexico. In Malaysia, where 75 percent of the world’s medical gloves are made, AP found factories were shut down and only allowed to reopen with half staff, who are now locked in hostels at their workplaces.
Shipments of medical gloves are down 23% so far this month compared with 2019, and medical gown imports are down 64% for the same period, according to trade data compiled by Panjiva and ImportGenius, services that track imports and exports.