COVID-19: The Road to Recovery

Phase 1 & 2 Standstill and Makeshift: Essential vs. Non Essential

On March 11th, 2020, the World Health Organization officially characterized COVID-19 a pandemic, marking the beginning of the Standstill (Phase 1). During this stage, the coronavirus outbreak had become a severe threat to global economies, and as a result, businesses were shuttered and stay-at-home orders took effect around the world. In the U.S. alone, the Centers for Disease Control and Prevention reported over 1.5 million people had been infected by COVID-19, with over 92,000 deaths. On March 13th, the White House declared a national emergency.

The COVID-19 outbreak created unprecedented havoc on the economy and severely impacted the global supply chain across multiple industries. Restrictions were also imposed on the movement of people across borders from certain countries. The coronavirus pandemic caused a sharp decline in the economy while raising varied responses across companies related to their employees, supply chain, and operations to provide needed products and services. During this time, companies had to modify operational strategies, and businesses deemed “non-essential” were shut down—causing many employees to be furloughed and even laid off. Accordingly, with the Defense Production Act invoked by President Trump, businesses deemed “essential” were required to ramp up production and bring all hands on deck to treat COVID-19 patients and to commercialize testing kits to address this rapidly spreading pandemic.

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Healthcare Industry Impacts

Challenge

Due to contagion worry, non-essential procedures were ceased, and the local and state authorities approved only procedures for patients in need of critical care.

Effect

Ceasing non-essential procedures only delays the inevitable, as non-essential (i.e. cardiac ablation, spinal and cataract surgeries) may not be immediately life-threatening, but are critical to improving patient’s quality of life and long-term health.

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Challenge

Capital equipment usage for non-essential procedures was suspended and ineligible for use resulting in an average decrease of 40% in sales (consumables and capital equipment) for most medical device manufacturers. Limiting these procedures not only put a strain on device manufacturers but drastically impacted healthcare providers. Non-essential procedures in many cases are a significant source of revenue for hospitals and clinics, and they were mandated by local and state authorities to halt these procedures to prevent the unnecessary spread of COVID-19—directly impacting revenue.

Effect

In the healthcare industry, capital equipment regularly undergoes ongoing maintenance based on scheduled timelines. This ensures the safety, effectiveness, and reliability of the equipment used for medical procedures. The Standstill (Phase 1) and Makeshift (Phase 2) brought this schedule to a grinding halt, resulting in a backlog of medical equipment due for scheduled inspection and calibration. Medical device manufacturers that produce essential equipment such as patient monitors, ventilators, diagnostic testing products, saw an enormous surge in demand. Given the challenges within the supply chain and the unavailability of parts to manufacture, many were unable to produce products quickly enough to meet immediate demand.

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Challenge

With the concern of employee safety at the forefront and new travel restrictions in place -- scheduled field service operations became a challenge and were drastically limited.

Effect

Medical device manufacturers and teams deemed "essential" faced significant logistical challenges in supporting their install base across the country, as field service technicians located in major metro areas were at a high risk of exposure to coronavirus. Many were forced into quarantine, and field service technicians traveling from outside metropolitan areas were either restricted from traveling or had limited access to highly infected cities.

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With each pivotal crisis the corporate world faces, fundamental and creative approaches have helped organizations endure and emerge with better, more robust levels of preparedness. This global pandemic has significantly impacted companies' operations and their employee's ability to complete critical tasks. During these phases, while transitioning from a Standstill (Phase 1) into a Makeshift (Phase 2), employees were unable to access traditional workspaces. They were essentially immobile, posing significant challenges to companies, leading to lost productivity. Many had to scramble to figure out how to keep providing essential services and related activities while meeting local regulatory ordinances. As a managed services provider for global device manufacturers, Quest was able to mitigate some associated risks for our clients effectively, allowing them to continue operations. They were leveraging Quest to rapidly divert and transfer operations from COVID-19 hot spots within Quest’s service infrastructure to ensure little or no disruption for their customers.

While organizations struggled to maintain core service and support, it became clear they needed to be agile and adopt a dynamic service delivery model. Effectively leveraging a managed service provider like Quest not only allows companies to keep fixed costs lower but is key to a viable business continuity plan when business disruptions occur.

Many organizations planning and delivering capital projects have in-depth experience in handling emergencies — but COVID-19 was unprecedented in the speed and breadth of its impact. Capital project delivery teams often have crisis response and project continuity plans ready. However, companies need to adapt these plans going forward to tackle COVID-19's many and fast-moving challenges still to come.

The spread of the COVID-19 virus continues to wreak havoc on the economy, industry operations, and multiple supply chains. As businesses continue to manage what they can control and influence, many are organizing their actions in a multi-stage approach. These proactive actions should position companies to meet objectives and prepare for scenarios that are critical to their business.

As we enter the Resuscitation (Phase 3) on this road to recovery, medical device manufacturers and healthcare providers will likely begin re-opening, leading to a new set of challenges and effects that will significantly impact their business operations. As we watch things unfold through this pandemic and implement measures to mitigate potential risks for our clients, we will continue to share our views and experiences. We continue to see these challenges are common across the healthcare industry and want to provide solutions that create a smoother path forward as we approach the Rebirth (Phase 7).

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