The Daily - Why the U.S. Is Running Out of Medical Supplies

Episode Date: March 31, 2020

States and cities across the United States are reporting dangerous shortages of the vital medical supplies needed to contain the coronavirus. Why is the world’s biggest economy suffering such a scramble to find lifesaving equipment?Guest: Sarah Kliff, an investigative reporter covering health care for The New York Times. For more information on today’s episode, visit nytimes.com/thedaily. Background reading: The scarcity of ventilators has become an emergency, forcing doctors to make life-or-death decisions. The collapse of a government effort to produce an emergency stockpile reveals much about the challenges now being faced in fighting the pandemic.This map of the United States shows gaps in the existing health care infrastructure — and which areas may face a shortage of hospital beds as the virus spreads.

From The New York Times, I'm Michael Barbaro. This is The Daily. Today, states and cities across the U.S. are reporting dangerous shortages of vital supplies needed to contain the pandemic. Sarah Cliff on what's behind those shortages. It's Tuesday, March 31st. Well, it's Friday. What feels like has been an endless week. I know so many New Yorkers have really felt this week. It's been very, very difficult. Last Friday in New York City, Mayor Bill de Blasio gave a news conference. And he essentially came out and said that the city is running out of medical supplies.

We're getting through this week. It's tough. We have what we need for next week, but it will definitely be a very hard week. But after next Sunday, April 5th, is when I get very, very worried about everything we're going to need. The people power we're going to need, the equipment, the supplies, obviously the ventilators. That they only have about a week left of the things they really need. But I want to put down that marker right now. And I've put down that marker to the White House, that that is a decisive moment for the city of New York. We need to make sure that we can get to that day ready to face the week after that and the week after that as well. And right now, we're not there.

And this is what we're hearing from mayors, from governors all across the country. Everybody's looking for ventilators. Everybody's looking for PPE. Everybody's looking for medical staffing. Everybody's looking for beds. And so that's what makes this particularly hard. There aren't enough supplies to treat the coronavirus outbreak. There's not enough ventilators. We need thousands of ventilators in Michigan. There is not enough N95 masks. We've got nurses who are wearing the same mask from the minute they show up for their long shift to the end of that shift. There aren't enough masks. There aren't enough hospital beds. There

aren't enough ventilators. The list is long, and hospitals are getting worried about running out. Sarah, how can that be? How is it that the U.S. is running solo and in many cases actually running out of so many essential components of a response to this pandemic? Well, for each component, there's actually a unique backstory. There's a clear reason why we don't have enough and why it is hard to get more. it is hard to get more. Well, let's go through each one of the three that you mentioned, starting with what would seem to me like the easiest problem to solve, which is masks. So what explains the shortage there? The masks were one of the first things to come into shortage. It was one of the first places where we started realizing we might not have enough supplies for our health care workers. And to understand the shortage of masks, you probably want to go back 20 or 30 years. Back then, a lot of the masks that were being used in hospitals were made in the United States.

That really shifted about 15 years ago or so. You saw mask manufacturers, like other manufacturers, moving their operations offshore where they could manufacture masks cheaper. A lot of them went to China. And if you think about it, you could manufacture it abroad. You didn't need a ton of specialized equipment, and then you could ship it right back to the United States. and then you could ship it right back to the United States. Orders are generally pretty predictable. At the time, it seemed like a prudent business decision for mask manufacturers to move their business to places where labor was cheaper. And so why is there now a shortage if this was a rational outsourcing decision with predictable deliveries from China to the U.S. that would allow us to create a stockpile. The system made sense when you understood the health care needs, when you knew a certain number of people tended to get the flu. So here's how many surgical masks you would need in a

country. It really falls apart when you have a pandemic like coronavirus, which has spiked the amount of health care supplies we need. And all of a sudden, we're in this situation where the surgical masks we want are half a world away. A lot of the transport that we rely on has been shut down. And other countries where the masks are being made are saying, we need these masks, too. This is particularly true in China, which had a coronavirus outbreak before us and in certain cases has been holding on to its masks, not allowing manufacturers to export them abroad. So it made sense at the time, but it was not a supply chain built for the pandemic we're in right now. So how solvable is this problem, given what you've laid out?

It is solvable, but it takes time and it takes some kind of unusual measures. So one of the things you do see happening is factories being turned over to mask manufacturing. And companies are trying to do that. If you look at Honeywell, for example, they have a factory that makes glasses and goggles. Usually they're going to turn that over to making masks, but they say it's going to take about a month to make the transition. They're going to have to hire 500 workers. You can't just flip a switch in these factories that have been used from something else.

And I think that's why you see everyone trying anything possible. It's why individuals are sewing masks at home and giving them to their local hospitals. You know, that's how dire the need is that we're really looking at any possible way to make a mask, even if it's not in the traditional factories that typically manufacture them. Okay, so that is masks. Where should we turn next? I think we should talk about hospital beds. Okay. We're facing a pretty dire shortage there, but for entirely different reasons.

So the United States has significantly fewer hospital beds per capita than a lot of our peer countries and a lot of other countries that are fighting coronavirus. And you can really trace that back to a law that passed in 1974. This was about a decade after Medicare and Medicaid had come into existence. And all of a sudden, the government had become a huge payer of health care bills. So they had a significant reason to be concerned about rising health care costs. And one of the things they started noticing was that when you had more hospital beds, they just seemed to get filled. It's like when you add a lane onto a highway,

you think it's going to make the traffic better. It just turns out more cars show up and start using that route. The theory there kind of being that however many beds you have, hospitals, which are businesses, they will find a way to fill them. So policymakers identified that having all these hospital beds was probably driving up costs because hospitals had strong financial incentives to keep those hospital beds full. So in 1974, they passed this law that essentially required hospitals to apply for permission to build beds. So if I wanted to build a 500-bed hospital in New York, I'd have to go to the state and say, here's why I think there aren't enough hospitals in this area and why I should be allowed to build this new hospital. And what is the impact of that law on the number

of beds in our system? It really limited the number of beds. You know, we've shed about a half million hospital beds since 1974. I think that's pretty telling. There's other things driving this. Certain procedures that used to require a few nights in a hospital have gotten faster and safer. So you don't really need that. Medicines have gotten better. So certain things that used to be treated with surgery, you can treat with prescriptions.

But at the core of this, we really have made this decision that we want to limit the number of hospital beds in the United States. And, you know, that might help hold down costs in a normal time. But then we get to a pandemic and all of a sudden it becomes a real constraint on our ability to treat a wave of sick patients. Right. So we created this shortage on purpose and with a reasonable motive that just wasn't anticipating what it would mean in a crisis. Exactly. And, you know, when you think about hospitals,

you have to remember they're businesses. If you have an empty bed in a hospital, that's a bed that's not generating revenue. So hospitals try to operate pretty full. A lot of the ones I've been talking to tend to operate, you know, particularly now in the middle of flu season at like a 95% capacity. That means there isn't a lot of slack in the system to surge up when you have a lot of patients who need care at once.

Because hospitals are already generally so full, they just don't have these empty beds sitting around for patients to use. But now we're seeing that not having slack in our healthcare system, not having empty beds that could be used when the need for healthcare surges, that leaves us really vulnerable in a situation like coronavirus, where you actually really want some slack in the system to treat those extra patients. Okay, so that brings us to what I think is probably one of the scariest and most urgent

problems of this pandemic, which is ventilators. Right. Ventilators are a crucial tool in fighting coronavirus. And the story of why we don't have enough of them, it highlights probably better than anything else, this incredible tension between the business of health care and the ability to respond to a crisis. We'll be right back. So, Sarah, what is the story behind our shortage in ventilators? So in 2006, the federal government creates an entire new division just to prepare medical responses to whatever sort of disasters it can imagine. And in its first year of operation, they started thinking about how to expand the number of ventilators.

They thought that we would need about 70,000 extra machines in a moderate flu pandemic. And one of the things they noticed is that we did have some ventilators in a national stockpile, but they weren't really ideal. They were big, they were expensive, so you couldn't order a lot more of them. They required a lot of training. So they come up with this idea that the federal government should develop a ventilator that is the opposite of all of that. So the U.S. is going to get into the business of making its kind of its own ventilators. Exactly. Well, they're going to outsource it. So they're going to find a private partner who already makes ventilators and asks them to design something to their specifications.

And what they want is a machine that is cheap, that is lightweight, so you can move it around, that doesn't require a lot of training to use. And they set out to find a private company that is willing to build such a ventilator. And a small medical device company in California called Newport Medical raises their hand, and they are really excited about it. They think it'd be really prestigious to work with the government. They want to build this device, and they get the contract. For the first two years, things go pretty well. Newport Medical actually creates three working prototypes, and they ship them out to Washington,

D.C., where officials are excited. You know, they see this thing they wanted to build and they can start envisioning it as part of the national stockpile. So everything really seems to be going as planned until May 2012. That's when it's announced that Newport Medical is being purchased by a much larger medical device company called Covidian. Newport Medical was worth about $100 million. Covidian was worth $26 billion. Wow. Just a magnitude larger company that makes all sorts of devices, whereas Newport Medical, the only thing they did was make ventilators. The government officials

who worked on the contract say they saw kind of an immediate change in how things were going. The larger company didn't seem quite as interested. They requested more money to finish the contract. And at the end of the day, late 2013, early 2014, the contract just falls apart and the ventilator is never built. Hmm. So what's your sense of why this larger company, Covidian, didn't want to make this ventilator? I mean, if it was prestigious enough for this little company, why wasn't it prestigious enough for this bigger company? Yeah, when I talked to former government officials, they kind of had a sense that Covidian didn't want to manufacture a lower-cost ventilator that would compete against their higher-cost ventilator that would compete against their

higher-cost ventilators that were already in the market. You know, it doesn't make a lot of sense for them as a business to introduce a product that's going to earn less money into the marketplace. So basically, it wasn't economically advantageous for this big company. Exactly. Even more than that, it was economically disadvantageous to have this other product on the market. You know, Covidian executives, they tell a different story. They felt like the government had unrealistic expectations, that when they came in, purchased a small company, they realized this project was just not feasible and ultimately had to negotiate their way out of it with the government. In any case, once this company was purchased, the contract was never finished and the ventilator that was supposed to be designed was not designed. So all of a sudden this ahead of its time, pre-planned program to make sure the U.S. has enough ventilators is not producing ventilators that the U.S. may eventually need. Right. And the government does keep trying. They rebid the contract after this one falls apart,

and they award it to Philips, another very large company. The thing is, it was too late for the crisis that we're in right now. So we're in a situation where the government spent 13 years, about $20 million, trying to build a device that could respond to a pandemic outbreak, and we don't currently have any ventilators to show for it. And so where does that leave the United States stockpile of ventilators? How many do we have versus how many we expect to be needing in this moment?

There are about 16,000 ventilators in the national stockpile that have been serviced recently, are ready to go out to American hospitals if needed. But back in 2007, when this whole effort started, the government estimated we'd need about 70,000 ventilators. So we're obviously still quite short of that number. And what is the federal government doing in the face of this ventilator shortage? So they are figuring out how to best use the stockpile. That effort is a little bit mysterious to the public. We don't exactly know which states are going to get which ventilators, when they'll be released, and how that will roll out. What is happening a little more publicly and would likely produce more ventilators is companies wrapping up their production of new units.

Thank you very much. Great to have you. You really see that in two ways. One is trying to get other manufacturers, particularly car manufacturers, to start making ventilators. This afternoon, I invoke the Defense Production Act to compel General Motors to accept, perform and prioritize federal contracts for ventilators. This is something President Trump has put some pressure on the industry, on General Motors, to start doing.

This invocation of the DPA should demonstrate clearly to all that we will not hesitate to use the full authority of the federal government to combat this crisis. And while it is well-intentioned, it's an effort that's going to be pretty challenged. Why? Well, the thing to know about ventilators is they are complex machines that really cannot malfunction. We're talking about machines with hundreds of parts that if they stop working, a patient stops breathing.

Right. So you need them to be put together correctly, and you need all those hundreds of parts to be in the exact right spot. That's not something a technician learns to do overnight. So when I've talked to some of these ventilator manufacturers, asking them, do you think an automobile company could make these? They're a little bit skeptical. They worry that the expertise isn't there and some training is really going to have to happen

before you can turn a car assembly line into a ventilator assembly line. The other thing we see happening is the ventilator manufacturers themselves ramping up. They're adding second shifts. They're bringing in more workers. But that's really limited by labor supply. One of the things that's really hard right now is you're trying to bring workers into a factory at an exact moment when the government is asking people to stay home. So increasing work at a factory means providing protective equipment to those employees. It means doing temperature checks when they come into the factory to make sure nobody gets sick. When I talk to ventilator manufacturers, the key constraint they're facing isn't enough assembly lines. It's

enough people to work on those assembly lines and who have the knowledge to work on those lines. That's really what stands between us and having a larger number of ventilators. So despite all this activity we're hearing about, despite the invocation of the Defense Production Act, despite car companies saying they're going to start making ventilators, I'm hearing you say that there's not going to be tens of thousands of ventilators suddenly rolling off some assembly line and solving this shortage in the next couple of weeks. Exactly. And I think that's why you see hospitals experimenting with how to expand the work of the ventilators they have. Some of those experiments are using one ventilator to support multiple patients.

Another one is taking the anesthesia machines that would be used in surgery and with elective surgery being canceled, retooling those as ventilators. You know, these are not things that would be happening if it were business as normal, but it's obviously not business as normal. And because hospitals, particularly those in New York, are waiting for ventilators, they're starting to see how they can expand the capacity of the ventilators that they already have. our preparedness for something like this pandemic, which people have been warning about for so long, was undermined by the simple fact that our healthcare system is driven by profits. Right. The thing to know about American hospitals, about device makers, is they're just like any other business. They have to turn a profit and bring in revenue to stay open. But there's also something that makes them really different.

We absolutely need them in a pandemic situation like the one we're in now in a way we don't quite as much need restaurants and car makers and other manufacturers. They're playing a crucial role in our safety net. But at the end of the day, you know, we don't have a tool we're using to prevent them from being what they are, which is businesses. So Sarah, there is a corner of our economy where everything you have just described is true. And yet the federal government always finds a way to make sure it gets what it needs. And that is the military.

There is a principle in the United States that the U.S. military has to be able to fight multiple wars at the same time and the United States government and our taxpayer dollars make sure that that always happens. So we know this is possible. It's just that the government hasn't tried that, it seems, when it comes to a stockpile for healthcare.

I think a lot of public health officials would agree with that. The ones I've talked to say that if we wanted to, of course we could build a giant national stockpile. It's a question of priorities and a question of funding. They kind of see this cycle that happens in the United States where there's a bad pandemic disease, it reveals flaws in our system, and suddenly lawmakers are talking about wanting to commit a lot of money. But the money never quite seems to come through. You know, a year or two later, there are other things they want to spend government money on. It kind of fades into the background until the next pandemic hits. Right now, we seem to treat military threats as real, as something we need to be prepared against. We don't really treat public health threats the same way.

But I think what one of the lessons of coronavirus might be is that the public health threats are just as real as the military ones. And it takes a lot of planning and a lot of money to be prepared for them. Thank you, Sarah. Thanks, Michael. The Times reports that in response to the shortages, the Trump administration has begun airlifting supplies of protective gear, including masks and gowns, from China to the United States. The White House said it would make 22 such flights by early April. We'll be right back. Here's what else you need to know today. We'll be right back. called for a period of, quote, hibernation, saying that only essential workers could leave their homes, while Italy said that its national lockdown would be extended until the middle of April.

During an interview, Italy's health minister, Roberto Speranza, warned that loosening the restrictions too soon would, quote, burn everything we've obtained until now. In the U.S., the virus is now spreading to Midwestern cities like Detroit, where there have been at least 35 deaths and 500 police officers are now under quarantine. There's no question that we have more density and we're more at risk. You're also seeing the Chicago area and the New Orleans area are also hot spots, and you're going to see this I think. On Monday, Detroit's mayor, Mike Duggan, predicted that many mid-size American cities would be next.

Major cities in America that are destinations that lots of people come into are likely to develop. And I think it's a matter of time before you see Philadelphia and Houston and some other cities develop the same way. That's it for The Daily. I'm Michael Barbaro. See you tomorrow.