The days of scrambling to secure toilet paper or antiseptic wipes are over. But the pandemic is continuing to wreak havoc on the supply chains for lots of other goods.
Animal lovers are reporting pet food is in short supply. Restaurants are warning customers their favorite meals may not be on the menu. Then there’s the shortage of semiconductor chips, which has raised the price and curbed the availability of everything from cars and computers to appliances and medical devices.
Waiting a few months for a new car is a hassle. But waiting for a piece of medical equipment can be life-threatening. Our leaders must therefore make bolstering the medical supply chain a bigger priority.
They can start by ensuring the companies that provide and service medical equipment are paid enough to compete for the scarce chips and raw materials that they — and their patients — need.
Many of these companies care for homebound patients who rely on things like motorized wheelchairs, ventilators, and home oxygen. More than 63 million of these patients are covered by Medicare.
Pre-pandemic, Medicare’s payment rates to home medical equipment providers were barely sufficient to keep them in business. In the last decade, some 35 percent of providers closed or stopped serving Medicare beneficiaries.
The pandemic has exacerbated the challenges they face. Due to the global supply chain strain, providers are waiting months to receive parts to repair things like power wheelchairs. Prices for some parts have shot up 30 percent since early 2020 due to limited supply.
Over the same time frame, the cost of steel for wheelchairs and hospital beds has jumped over 60 percent, while the cost of polycarbonate plastics, used for oxygen tubing, nebulizers, canisters, oxygen and PAP masks, has increased by 100 percent.
Shipping container costs are partly to blame for these dramatic spikes. Since the pandemic began, the cost of these containers has risen over 1,200 percent.
Then there’s the chip shortage, which has disrupted the production of everything from blood pressure monitors to remote-control hospital beds. So providers are often unable to get the goods they need to replace outdated equipment for existing patients — or care for new ones.
And there are plenty of people who would like to be new homecare patients. Demand has exploded in the last 18 months, as patients are reluctant to enter skilled nursing facilities or hospitals where they could be exposed to COVID-19. Many of these patients are medically vulnerable and face a much greater risk of death from the virus.
When the price of inputs rises in other industries, companies typically pass the increase on to consumers. But home medical equipment providers are constrained by pre-determined Medicare pricing that doesn’t account for today’s costs.
That leaves them to either stop taking on new patients or absorb the cost increases they’re facing — perhaps by curbing their workforces, shrinking their geographic service area, limiting the selection of products to meet individual’s needs, reducing complementary but essential services, and more.
All of those options diminish patient outcomes and access.
Congress and the administration must take action to ensure homecare remains viable and accessible for those who need it, now and into the future.
That will require addressing the chip shortage. Homecare is a technology business these days. Without ready access to the chips that power advanced medical devices, homecare providers won’t be able to meet patient demand.
To his credit, President Joe Biden is taking action to shore up America’s supply lines. He’s created task forces to identify bottlenecks and bring semiconductor chip manufacturing back to the United States.
In the meantime, Congress and the Centers for Medicare and Medicaid Services must make sure home medical equipment providers have the resources to compete for scarce technological inputs. That means raising payment rates.
Medical device manufacturers should not be losing bidding wars over scarce electronic components to non-healthcare providers, just because the latter have the ability to raise prices.
Scientists and engineers have created life-saving devices to treat patients at home for conditions ranging from chronic obstructive pulmonary disease to neurological diseases affecting mobility to diabetes. These devices save the healthcare system billions of dollars a year.
It doesn’t make financial sense to starve home medical equipment providers of funds. To survive, they must be paid an amount commensurate with their rising expenses.
Millions of patients depend on home-based care. Millions more would like to when their time comes. We must make sure homecare providers do not end up being casualties of the pandemic — and the supply chain challenges it has created.