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As Ukrainians and others within the direct lines of war suffer immediate loss of life and personal safety, the medical industry is considering what the geopolitical upheaval may mean more indirectly for the delivery of healthcare in a global economy.

Some experts told 番茄社区 it may not be time for hospitals and healthcare providers to worry just yet, since few medical supplies are directly produced in Ukraine, , one of the largest healthcare group purchasing companies.

However, Russia's invasion of Ukraine may lead to long-term supply chain disruptions that could affect the U.S. down the line, either through delays stemming from closed airspace and expensive fuel, the impact on extraction of raw materials for medical supplies, global dependence on oil and gas, or cyberattacks on healthcare systems.

This all comes on the heels of a pandemic supply chain backup that hasn't yet resolved. "We're seeing disruptions to the global logistics and transportation networks. And so that will just worsen this global supply chain crisis we have already seen," said Tinglong Dai, PhD, a professor of operations management and business analytics at Johns Hopkins Carey Business School in Baltimore.

Transportation of Goods

The closing of to 36 countries, Dai said, means that goods flown by air freight from Western China to Europe must reroute or rely on other slower or more costly modes of transportation. "Ports have seen tons of congestion, so this is not going to help, and we already have a lot of medical supplies trapped in containers," said Dai. "In anticipation of a delay, you see the factories all over the world that either stopped producing or have delayed production."

The personal protective equipment (PPE) shortage meant healthcare workers had to reuse masks and do without other equipment during the COVID-19 pandemic. Global supply chains have still not caught up with bottlenecks.

Flexport, a logistics research company, ocean shipping operation times from China to Europe and China to the U.S. grew steadily from 40-50 days in 2019 to around 110 in December 2021.

"Medical supplies, along with many other categories of products, will be trapped in containers that cannot be released to trucks that cannot be sent to hospitals and clinics for day-to-day healthcare delivery," Dai explained. Ports in Europe have also seen a backlog as of March 3, .

Raw Materials, Manufacturing, and Costs Along the Medical Supply Chain

Like many other industries, the healthcare industry's dependence on crude oil, natural gas, and certain metals to make equipment and goods makes it vulnerable. Because Russia and Ukraine supply much of the world's natural gas via fracking shale deposits, delays and price increases could affect the production of plastics used in trays, syringes, pill bottles, and sharps disposal containers. According to Premier's report, aluminum, nickel, titanium, neon gas, and iron -- used in surgical instruments, implantable orthopedic devices, and medical equipment -- are mined in the region. Steel from Russia could also become more scarce and is already more expensive than usual, the report noted.

The , in particular, and how intertwined they are with the delivery of healthcare underscores the incentive for finding alternatives to their use.

According to Premier's report, Russia produces 12% of the world's oil and 17% of its natural gas, and sanctions on Russian banks will interrupt the country's exports of energy and lead to price inflation. In a system reliant on fuel to move goods, ripple effects will touch every part of the world. The cost of transporting materials and producing finished products, including medical supplies, will likely rise globally.

Though Russia and Ukraine do not produce medical supplies for the U.S. directly, Dai noted that there will be limited modes of transport and higher prices for goods that normally move from China through Russia to Europe and then to the U.S. Air cargo prices because of longer trips and are even collecting "War Risk Surcharges."

What's more, Dai added, many European countries -- including the Czech Republic, Hungary, and Germany -- get more than half of their natural gas from Russia. If that supply is interrupted or cut off as a result of the invasion, they'd have to scramble to find other suppliers, and natural gas prices would rise further.

According to David Hargraves, senior vice president of supply chain at Premier, if costs of raw materials or the energy to process them rise, those who buy the materials, manufacture goods with them, and transport the goods can raise their prices to make up for their expenses. "Every member of the supply chain, except for the final customer -- the healthcare provider, the hospital system -- everybody else had an ability to raise their prices and pass it on. But healthcare facilities don't have that ability," he said. "They have to eat it."

Cyberattacks

The Premier report also includes a warning from the Cybersecurity and Infrastructure Security Agency to double down on cybersecurity efforts. "While there are no specific or credible cyber threats to the U.S. homeland at this time, Russia's unprovoked attack on Ukraine, which has involved cyber-attacks on Ukrainian government and critical infrastructure organizations, may impact organizations both within and beyond the region, particularly in the wake of sanctions imposed by the United States and our Allies. Every organization -- large and small -- must be prepared to respond to disruptive cyber activity."

Smaller entities that support medical supply chain infrastructure, like freight forwarders, port authorities, and third-party logistics providers, may be particularly vulnerable to attacks that could affect healthcare suppliers and healthcare systems, the report noted.

Ultimately, Dai said, countries in a Post-Cold War era have been slow to accept the risks of relying on a global economy where an act of war, like the invasion of Ukraine, could set off a domino effect -- until now. "There's this really ambiguous attitude, that doesn't really believe in the so-called impossible," he said. "But I think that is going to change. And when you look at what's going on in Russia, I think companies will start actually moving their supply chains closer to this country."

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