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Here's how corporate deals are making PPE shortages even worse

Mohsen Atayi via Fars News Agency, https://creativecommons.org/licenses/by/4.0/deed.en

When hospitals have an insufficient amount of PPE (personal protective equipment), the chances of doctors and nurses being infected with coronavirus increases. Many hospitals in the U.S. have been complaining about PPE shortages, desperately fighting to increase their access to N-95 masks and other equipment that can save the lives of medical workers when they are treating COVID-19 patients. But journalist Diana Falzone, in an article published by Vanity Fair on May 21, reports that some corporate deals are making it harder for hospitals to maintain their PPE supplies.


Falzone opens her article by describing a hospital that, for weeks, has had a shortage of N-95 masks. According to Falzone, an “internal memo was circulated among staff at a California hospital on April 8: ‘all…. clinicians and staff shall be issued one surgical mask to wear at all times while at work. It is important that every clinician and staff member protect this mask and utilize it for at least a week or longer in order to help preserve our precious supply of PPE.’ More than a month later, the memo is still in effect, said a doctor who received it and is treating COVID-19 patients. The PPE situation at that doctor’s hospital has not improved.”

Falzone goes on to explain why that hospital, despite the shortage, has had to turn down offers of PPE donations it desperately needs.

“The California doctor said the hospital system has not accepted donations of PPE,” Falzone notes. “Its hands are tied — the doctor told me that the hospital has an exclusive contract with Medline, the largest privately held manufacturer and distributor of medical supplies in the United States. Even with Medline running short on PPE, the hospital isn’t turning elsewhere for necessary equipment.”

The doctor in the California hospital, obviously interviewed on condition of anonymity, told Vanity Fair, “We sat like fucking sitting ducks. Everything in health care is meant to benefit those who control the system.... It is only about (corporations) and stockholders.”

Falzone reports that that health care industry in the U.S. has become increasingly reliant on group purchasing organizations, and hospitals might agree to purchase equipment from one company exclusively in order to receive a discount.

John Matthew Douglas, founder of the consulting company iPressForward, told Vanity Fair, “The more a GPO member spends with a particular vendor, the greater their savings may be — and the greater too is the administration-fee sum to the GPO. Sole-source contracts, a non-competitive agreement that allows one entity to be the single provider…. also come into play. The theory is that if a hospital or health system (can) control procurement and consolidate vendors…. they are better positioned to obtain the lowest price point on the products and/or services procured for day-to-day operations…. The more you buy, the lower the rate — Costco model on steroids.”

But while hospitals appreciate the discounts with GPOs, Falzone reports, “Problems kick in when supply runs short, or when a supplier that’s been awarded an exclusive contract inflates prices artificially.”

Dr. Marion Mass, a Philadelphia-based doctor, told Vanity Fair, “Imagine if iced tea companies were allowed to pay convenience stores. You’d have one iced tea company who would pony up enough to become the only supplier, and that tea company could charge what they like. The fact that the hospitals are not crying out means there’s something in it for them. You need to be able to see where the money is going, (but) the contracts between GPO and manufacturers and GPO and hospitals are hidden from the public.”

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