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WASHINGTON -- The medical supply chain for veterans' healthcare facilities has many problems and needs better organization and more stability, witnesses and members of Congress said during a House hearing.

"The VHA [Veterans Health Administration] modernization campaign outlined a number of in-progress initiatives across the full scope of its operations, including several related to supply chain," Shelby Oakley, director of contracting and national security acquisitions at the Government Accountability Office (GAO), at a hearing on problems with the Department of Veterans Affairs (VA) medical supply chain held by the House Veterans' Affairs Subcommittee on Oversight and Investigations. "While VA updated the modernization plan in October 2020, its scale doesn't provide a comprehensive strategy that communicates how each of its various supply chain-related initiatives move it forward to a more modern supply chain."

The VA "lacks an implementation plan with key milestones and deliverables to track progress and inform decision-making at an enterprise level," she continued. "A comprehensive strategy would help VA balance different objectives and identify steps needed to create long-term gains, not just short-term advantages. Without one, VA risks missing opportunities and wasting resources ... Until it develops a comprehensive strategy, VA will not be able to put in place an effective medical supply chain that delivers the right item at the right time to the right place and at the right cost."

Lack of Organization

Committee members also expressed concern about the agency's lack of organization. "Unfortunately, VA's supply chain has long faced many serious problems," subcommittee chairman Chris Pappas (D-N.H.) said in his opening statement. "The GAO added VA to its high-risk list ... in 2019, largely due to medical supply chain problems. During September's hearing, we heard testimony that the weaknesses in VA's purchasing and inventory management systems were magnified by the pandemic. GAO testified then that VA's old systems could not provide daily supply inventory data, so VA had to create an ad hoc reporting process to understand how many supplies -- such as masks and gloves -- it had on hand."

A year into the pandemic, "VA is still largely using this manual, spreadsheet-based system," he continued. "While heroic efforts have allowed VA to build its overall inventory of critical supplies in the last few months, I remain concerned about the unevenness of supply inventories and the continued rationing at VA medical centers. The VA Inspector General issued three reports in the last 3 months that found examples of VA medical facilities around the country that either ran out of personal protective equipment or were running low and had to ration these supplies. Further, a found that up to 40% of staff at VA medical centers 'reported not having access to appropriate personal protective equipment necessary to ensure their own safety at work.' ... Clearly, more needs to be done here."

In addition, "the VA has set up eight interim warehouses to store and distribute stockpiles of masks, gloves and other critical supplies to VA hospitals. The VA originally told us that they planned to turn some of those supply warehouses into permanent readiness centers to hold 6-months' stockpiles of critical items by July of 2021. Now this has been delayed until 2023." Pappas said he had to allow VA to participate in Pentagon's Warstopper program, "which is an additional solution for acquiring critically needed supplies."

Delays in Making Improvements

The VA also planned to roll out a Medical Surgical Prime Vendor program 2.0 in January 2021. "However, the VA has since delayed this program another 9 months," said Pappas. "This follows a long series of prior delays for modernizing VA's procurement systems going back many years. At the same time, VA is trying to accelerate its 7-year rollout of a Department of Defense integrated supply inventory tool called DMLSS [Defense Medical Logistics Standard Support system] by 2 years; VA now plans to complete the transition to DMLSS by 2025, but VA has installed the system in only one facility and plans to add just three facilities in FY 2021. That looks to be quite a time crunch in the coming years."

Rep. Tracey Mann (R-Kan.), the subcommittee's ranking member, also expressed concern about the DMLSS program. "I appreciate VA attempting to accelerate DMLSS from 8-year implementation to 5 years, but this is still too slow," he said. "Bringing the system up to full capability at its first and only site took almost 2 years. I do not see how this program can successfully be implemented unless something fundamentally changes."

He also was concerned about the regional warehouses. "I'm struggling with how VA can be signing agreements for warehouses without answering some basic questions. For instance, what items will be held in these warehouses? Unless the plan is to restore massive quantities of every medical supply, how can anyone predict which items will be needed in future emergencies? ... Before VA sinks $1 billion into startup costs, not to mention operational costs, I think we need more answers."

The VA's witness, Deborah Kramer, addressed few of these issues in her opening statement, but instead used most of the time for anecdotes, such as one about how logistics personnel helped set up tents needed for additional bed space at VA facilities, and another related to expanding negative pressure space to dental clinic treatment rooms, which Kramer said reminded her of similar work done on the Apollo 13 space mission.

Kramer, who is VA's acting assistant under secretary for health for support, did address some of the issues toward the end of her statement, congratulating employees of the VA's Procurement and Logistics Office for setting up the regional supply warehouses for PPE. She also praised the agency for coming close to or meeting some of its goals in terms of high-value spending, and for using small-business contractors.

Problems Tracking Inventory

Michael Missal, the VA's inspector general, told the panel that VA facilities "have long experienced barriers to real-time tracking of inventory, purchasing, distribution, storage, and other supply management functions. This has led to breakdowns and the need for workarounds that sometimes lack compliance with VA policies and procedures. The COVID-19 pandemic has intensified these problems, with disruptions to supply chains and unprecedented demands on healthcare delivery worldwide. There are still considerable challenges related to VA's administration and oversight even without the strains the pandemic has placed on medical and surgical supply chains."

Committee member Elaine Luria (D-Va.) asked about mismanagement of equipment and supplies at the Hampton VA Medical Center in her district. A September 2019 inspector general's report found that the medical center didn't use inventory systems to track supplies and about $1.8 million of unused equipment was unaccounted for and discovered in an unmarked room. The facility director then ordered someone to manage the inventory and develop a process for managing the equipment.

"Is there anything the VA medical centers can use to manage inventory control in the interim" as it waits for the department to implement a new inventory system, Luria asked.

Missal responded that his office had on a similar problem at a Washington, D.C., facility. "When we put out a report like that, it's not only just for the D.C. medical center... but other medical center directors should look at these reports and say, 'Do I have the same issue?' Had they done that at Hampton, they could have identified it sooner," he said. "We do make recommendations that address the issue, and have not heard of any issues currently .... We do go and inspect facilities on a regular basis, and we'll be back down to Hampton in the near term."

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