Last month, the Healthcare Industry Resilience Collaborative (HIRC) held its inaugural HIRC Academy in Carlsbad, Calif. Present were supply chain leaders from large providers (hospitals) and from large suppliers (medtech, pharma, distributors, etc.). Supply chain leaders were there to celebrate the industry’s work to establish standards and certifications for healthcare supply chain resiliency and to discuss — in a forum of passionate (but usually adversarial) buyers and sellers — how we promote resilience in the healthcare supply chain.
HIRC is the foremost organization to promote resilience in the healthcare supply chain. The fact that its leadership has successfully brought together providers and suppliers is impressive, and a testament to the shifting mindset of a healthcare supply chain that is increasingly in the hot seat: We all know we have to get better at healthcare resilience.
HIRC addresses the need for suppliers to map their supply chains and create redundancies, to provide efficient communication about supply chain disruptions, to have a business continuity plan in place, to provide service-level reports addressing backorders and recalls, and more. HIRC works under the assumption that standards in these areas will go a long way toward ensuring service disruptions in healthcare are avoided — or at least ensuring that their impact is minimized and addressed in a timely and effective manner.
Cost savings and resilience must walk hand in hand
Supply chain resilience has been a key concern since the pandemic. More and more often, hospital purchasing professionals are experiencing backorders or limited availability for key devices or pharmaceuticals used to treat patients, and service line leaders are experiencing disruptions in their ability to provide proper patient care.
For years, the primary concern for healthcare facilities has been to drive down costs. This has been achieved to the point where most supply chains are so lean that even small events can threaten supply chain resilience. This is because most (but not all) initiatives that reduce healthcare supply costs also reduce healthcare supply resilience.
Think about the popularity of single-source contracts: Suppliers are often successful in securing lower prices by signing sole-source agreements. But the consequence is that when supply chain disruptions occur, switching to substitute products is complicated. In other cases, suppliers increase prices and introduce new technologies, often with proprietary designs that do not allow switching to other suppliers’ products. Efforts to improve delivery models through staff reductions and cost-efficiency changes have proven to be insufficient to offset these increases.
According to the Symplr State of Healthcare Supply Chain Survey, healthcare supply chain leaders in 2024 indicated that the need to find cost savings was their top challenge. In 2025, this had switched to supply chain disruptions. In 2026, disruptions and cost savings share the top spot as the foremost healthcare supply chain challenge.
Most efficient supply chains are not built to be resilient; they have been built to minimize costs. There is a trade-off between cost reduction and supply chain resilience—a trade-off that shows itself in times of disruption, such as the pandemic, but also in times of war, climate challenges, and raw material challenges. Health systems carry a substantial part of the blame for the fragile nature of the supply chain because they have leaned it out in their search for cost reductions.
Supply chain resilience is broader than the current conversation
The most important lesson I learned at HIRC Academy is that healthcare supply chain resilience is far too important to leave with the supply chain professionals. Healthcare supply chain resilience measures the ability of the healthcare provider (the hospital) to avoid or mitigate disruptions to its supply of medical devices and pharmaceuticals so that the provider can always provide the proper care for its patients. Healthcare supply chain resilience is usually associated with ensuring transparency into the suppliers’ supply chains, instituting business continuity plans, establishing efficient communication practices, creating redundancies (larger, more local inventories, multiple suppliers, etc.), and creating assurance against backorders.
In other words: Healthcare supply chain resilience has largely been defined as a matter of optimizing the logistical, informational, contractual, and fulfillment aspects of the supplier-provider relationship. As a result, healthcare supply chain resilience has been considered to be the domain of the health system’s supply chain office.
However, these are merely a fraction of the elements that determine a healthcare supply chain’s vulnerability. Other elements — elements that the supply chain office typically does not consider, including product design, portfolio management, lifecycle management, marketing practices, and product bundling — even more fundamentally contribute to a vulnerable supply chain. HIRC community members should include the below concepts on their resilience consideration lists as well.
Single-use device reliance – More and more devices are designed to be single-use — in some cases replacing devices that have been reusable for decades. While it makes sense that syringes, for example, are single-use, designing and labeling cables used in the electrophysiology lab as single-use is both unnecessary and a threat to the resilience of the supply chain, the cost structure of the lab, and the environmental sustainability of healthcare. In terms of resilience, when single-use devices go on back-order, procedures get cancelled. When reusable or reprocessable devices go on back-order, the supplies are not immediately affected. The healthcare supply chain does not typically favor reusable products and other circular solutions that have a direct impact on resilience.
Re-use prevention – Medtech marketing and sales aggressively push the newest, most expensive devices to hospitals, while doing everything they can to prevent re-use (for example through reprocessing). In some labs, manufacturer reps will remove devices after a procedure and take them with them, threaten to withdraw support from procedures where reprocessed devices are used, or force the labs to buy new (although reprocessed devices are available) through volume contracts. In other cases, “environmental programs” are put in place to recycle devices — thereby preventing re-use, blocking the much larger carbon impact reduction from reprocessing — and creating vulnerabilities for the supply chain.
Shorter product lifecycles – Medtech manufacturers target fast-growing service lines for accelerated innovation and shorter product lifecycles. They do this because every new generation of a device is associated with a price increase; the shorter the lifecycles, the more frequent the price increases (and the higher the profits). However, hospitals that quickly adopt new technologies can expect that supply chain disruptions will have an impact on patient care, as new technologies have fewer substitutes.
Limited compatibility – Suppliers tend to design and launch new products whose use is predicated on compatibility with other devices or assets in that company’s portfolio. The supplier’s new ultrasound catheter might be compatible with only that same supplier’s generator and other devices used in the same procedure. By focusing on limited compatibility rather than an open-platform approach, the supplier reduces choice and supply chain resilience, ensuring a lack of substitutes during times of disruption. Supply chain officers have little power to address these issues, which are essentially baked into the suppliers’ design strategies.
Questionable marketing and sales tactics – Medtech and pharma marketing and sales are notorious for abusing clinician relations. They leverage exclusive training, technical support, access to other products, and lack of transparent pricing to lock in hospital service lines to specific product utilization that limits choice and maximizes supplier profits. (And yes, “consultant” clinicians also represent a means of taking hostages in healthcare.) All these techniques increase supply chain vulnerability, but they are rarely addressed by healthcare supply chain officers, who often find themselves with limited options due to legacy “business as usual” practices.
Product bundling – Finally, product bundling is a common practice in healthcare purchasing:
- “I’ll give you a reduced price on Product A if you commit to purchasing Product B.”
- “I’ll give you this generator for free if you commit to buying X amount of disposable devices from me.”
- “Only if you buy Product A can I sell you Products C and D.”
- “If you want my technical support, you have to use my devices.”
These are all common bundling practices. Although most or all of these are illegal, they are still common in healthcare contracting. While product bundling should be addressed by supply chain officers, they are typically legal or strategic challenges addressed at a different level.
Healthcare supply chain resilience is about the ability to provide proper care for patients when they need it. Supply chain resilience is far too important to leave with the supply chain specialists. Health systems must elevate the resilience issue to the corporate strategy level and involve officers from other functional areas as well. U.S. health systems and HIRC should also broaden their scope to address the entirety of the resilience challenge — not just its symptoms.
Photo: adventtr, Getty Images
Lars Thording, PhD, serves as vice president of marketing and public affairs at Innovative Health LLC. He has a background in academia, consulting, and industry leadership. He has been responsible for the launch of numerous market-disrupting solutions across healthcare, insurance, and technology. Originally from Denmark, Thording has taught at universities in Denmark, Ireland, and the United States. He currently serves as the vice president of marketing and public affairs at Innovative Health, a medical device reprocessing company specializing in electrophysiology and cardiology technology. Lars currently serves on the board of the Association of Medical Device Reprocessors.
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