Dive Brief:

• Resilinc, a software company, is launching a cloud-based bartering platform called The Exchange to allow hospitals to procure medical supplies from each other and from donors, while offering another item to trade in return. Along with all hospitals, The Exchange is open to Resilinc Healthcare industry customers, including group purchasing organizations (GPOs) and distributors, and other Resilinc customers interested in donating. Private companies, governmental and nongovernmental organizations can also join to donate, but only healthcare providers will be able to request supplies.
• The system, announced during a Resilinc webinar Tuesday, is the result of a partnership between Resilinc, Stanford Healthcare and Premier, a GPO in the healthcare industry. UPS has joined the effort as a delivery and logistics provider. The Exchange platform will go live mid-April in the U.S., with a global release in May or June, and be free to all hospitals until September, which Resilinc said "is hopefully our window for resolving or ... flattening the curve" of the COVID-19 pandemic.
• Government oversight would ideally be added to the Exchange to ensure the disbursement of inventory is effective, according to Bindiya Vakil, CEO and founder at Resilinc. "We don't want to play God. And we don't want to be the ones deciding who gets what," she said during the webinar. In the meantime, Resilinc’s Healthcare Transparency Initiative (HTI) board of directors will maintain oversight and settle disputes or concerns.

Dive Insight:

The response to the COVID-19 pandemic has squeezed medical supply chains with supplies, particularly of personal protective equipment (PPE) and testing equipment, running short.

"There's no doubt that we've seen unprecedented levels of burden on the supply chain ... There's over 2,600 unique SKUs that are on allocation across the country, which is a statistic that we haven't even gotten to within 10% of [in] the history of Premier," Chaun Powell, group VP of strategic supplier engagement at Premier, said during the webinar.

Healthcare organizations began to increase inventory as early as January, Amanda Chawla, VP of supply chain at Stanford Healthcare, said during the webinar. "Most organizations — not all — live in a just-in-time world, where we keep a limited amount of inventory on site or through our distributors," she said.

When significant supply disruptions hike demand as much as the COVID-19 response has, the challenge is the types of inventory that anyone can procure, she said. "I, at Stanford, may be challenged with a certain product category, and one of my colleagues down the street may be challenged with another product category," Chawla said.

Chawla explained that procurement in healthcare often happens manually: When there’s a need, one must pick up the phone and call around to all area hospitals. But The Exchange will connect hospitals across the U.S., and eventually across the globe.

The Exchange incorporates lessons learned from previous health crises, particularly the Ebola outbreak in 2014, when allocation methodologies involved protecting hospitals’ purchasing history. The problem with that, Powell said, is purchasing history is not indicative of current need. Two hospitals could have a history of ordering 500 masks, but one hospital could have 100 patients while the other has none, he said.

Hospitals on The Exchange will be able to search the platform for items they need. If what one hospital offers doesn’t match what the other needs, a chat function will allow procurement professionals to work out trades to satisfy all parties. Although UPS is a partner, users on The Exchange can utilize any preferred logistics provider to ship inventory to each other.

All users will be vetted and, because the system is based on bartering, there are no cash exchanges. The HTI board is tasked with ensuring that no one uses The Exchange as an e-commerce marketplace, a bidding platform, a dumping ground, a super-hoarding mechanism or a place to price-gouge.

"We, as an industry, need to fundamentally move away from the historical allocation models — it doesn't work. It doesn't present the reality of what we're facing when we're in a situation of a pandemic and epidemic," Chawla said.