As Americans age, the need for a steady, reliable flow of healthcare supplies will only grow

Hurricane Helene, which devastated swaths of the southeastern U.S. and caused the deaths of hundreds of people, also uncovered a quieter crisis and preparedness gap that could potentially shake the U.S. healthcare system and affect the lives of millions.

One of the country’s largest manufacturers of intravenous bags, North Cove, N.C.-based Baxter International (BAX) – which is responsible for 60% of the nation’s supply of that equipment – was knocked offline by the massive storm, sparking a nationwide alert to healthcare providers to restrict their use of IVs.

Fortunately, the plant is partially back online, and with a series of other actions, including temporary importation and reallocation from other Baxter facilities of certain products, the company reports a goal of having “90% to 100% allocation of certain IV solution product codes by the end of 2024.”

But what if the plant remained shut down for an extended period? In hospitals from coast to coast, surgeries would be delayed and treatments postponed, and the ripple effects would be felt for months. This event is not just a harbinger of natural disaster risks. It’s a wake-up call about the fragility of the country’s healthcare supply chain, particularly as we face the demographic reality of an aging nation.

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America is getting older, fast. By 2034, adults age 65 and over will outnumber children for the first time in U.S. history. The fastest-growing segment of the population is those over 85. This demographic shift, driven by increased life expectancy and declining birthrates, is not just reshaping our communities, workplaces and policies. It is placing unprecedented demand on healthcare systems and the supply chains that support them. IV bags, dialysis equipment, oxygen tanks, medications – these are not luxuries, they are life-sustaining products that millions of older adults and their families rely on daily. And yet the very supply chains that produce and deliver these critical resources are underprepared for what’s coming.

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Extreme weather events and their precise impact are unpredictable and only allow days to prepare. Unlike the weather, however, demography is destiny. We know a dramatic rise in the nation’s aging population is coming, and we know when and where it will happen, because we are already here. It is time to prepare a national healthcare supply-chain infrastructure to support an aging America.

A perfect storm: Aging population meets supply-chain fragility

The recent IV bag shortage is just one of many warning signs. As America’s population ages, the demand for medical supplies will rise exponentially. Yet the nation’s healthcare supply chain – like so many others – is built on the principles of just-in-time inventory, globalization and razor-thin margins. These efficiencies, designed to reduce costs and maximize resources, leave little room for disruption. And as natural disasters become more frequent and severe, the risk of supply-chain breakdowns increases.

Unlike the efficiency engineered to ensure timely and cost-effective delivery of consumer products and retail goods to meet demand spikes, such as the holiday shopping season, health-related product distribution is less about efficiency than human life.

For an aging population in particular, such disruptions can be life-threatening. Older adults are disproportionately affected by healthcare supply shortages because they are more likely to be managing multiple health conditions and often require ongoing medical treatments. Intravenous fluids, for example, are used not just for surgeries but for hydration, nutrition and drug delivery for chronic conditions common in older adults. Dialysis machines, critical for those with kidney failure, require a steady supply of parts and solutions. The growing number of older Americans who rely on oxygen tanks, catheters, mobility devices and other medical equipment depend on supply chains that are increasingly vulnerable to shocks and require higher-fidelity risk-management strategies.

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Strengthening domestic production

Today, the United States relies on foreign sources for critical medical supplies. A Marsh McLennan analysis indicates that up to 60% of the active pharmaceutical ingredients used in pharmaceutical manufacturing come from China and India. The same is true for medical devices, which may be assembled in the U.S. but which have many components from a small number of global suppliers. Disruptions abroad – whether caused by natural disasters, geopolitical events or even pandemics – can quickly cascade into shortages at home.

The COVID-19 pandemic painfully exposed this vulnerability. The nation’s hospitals and skilled-nursing facilities scrambled to procure masks, ventilators and personal protective equipment. But unlike PPE, the needs of an aging population cannot be solved by ramping up production in a matter of weeks.

For example, rescue inhalers used by people with asthma and chronic obstructive pulmonary disease are often assembled in the U.S., but the components are produced in other countries. People with these conditions have minutes, not weeks, to respond to a major attack. Reshoring production of essential medical supplies and pharmaceuticals is critical, but it requires long-term investment and policy change. The Biden administration in 2021 identified pharmaceuticals in an executive order as a supply chain of vital importance. Recent events show that more than pharmaceuticals need to be deemed critical, wherever they are sourced.

We need a strategic systems approach that encourages the development of domestic manufacturing capabilities for medical supplies. Tax incentives, public-private partnerships and new federal regulations could spark investment in U.S.-based production facilities for everything from IV bags to dialysis machines. Ensuring that the nation has redundant suppliers for critical medical products and components will be essential for building a resilient healthcare system.

Regionalizing healthcare logistics

Beyond reshoring, producers must rethink how they distribute healthcare supplies. The current supply chain is highly centralized, with key products produced in a handful of megafactories or imported from overseas. This makes the system efficient but brittle – vulnerable to bottlenecks such as the recent port strike and regional disruptions like those caused by Hurricane Helene.

One solution may be regionalizing healthcare supply chains to ensure that medical products are produced and stored closer to where they are likely to be needed. An analysis of where high concentrations of adults are aging in place and of healthcare centers might provide insights for such a strategy.

Decentralizing the production and distribution of key supplies can help insulate different regions from the effects of localized disasters. Moreover, creating more geographically diverse supply hubs can help hospitals, skilled-nursing facilities and pharmacies access critical supplies faster during and after emergencies.

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Supply-chain preparedness for an aging America

The stakes are high. By 2050, the number of Americans over 85 will nearly quadruple, to 19 million. As the population ages, the need for a steady, reliable flow of healthcare supplies will only grow. Applying the same supply-chain strategies that are used for car parts and consumer goods is insufficient to meet people’s existential health needs. Preparing the supply chain for this demographic shift is not just a matter of efficiency – it’s fundamental to the health and well being of millions of older adults and their families.

Building an age-ready healthcare supply chain requires more than patchwork solutions in response to crises. It demands a forward-thinking strategy that gives priority to the changing needs of the American public. Policy makers, healthcare leaders and business executives must work together to ensure that America’s aging population is not left vulnerable to the next disaster – whether it’s a pandemic, a labor action, a hurricane or a geopolitical conflict.

-Joseph Coughlin

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