Burned by COVID supply crunch, hospitals invest in U.S. mask-making

It isn't the hospital group's first foray into manufacturing. After COVID-19 border closures in early 2020 choked shipments from Asia, producer of about 80% of the world's medical masks and protective gear, OSF and some other hospital groups started investing in U.S. production of key supplies including masks, gowns and critical pharmaceuticals.

OSF declined to disclose the machinery cost. It is expected to pay for itself in two years, versus 18 months for the surgical mask machine - a difference largely due to freight costs being nearly four times higher than usual, said Salvatore, Stile, president of logistics company Alba Wheels Up, who handled the N95 machinery shipment."The manufacturing cost is a little higher than sourcing with a lower-cost competitor.

For more than 18 months, Premier and rival Vizient have bolstered U.S. manufacturers via strategic partnerships, expansion funding, minority-stake investments and joint ventures. While Premier declined to reveal the value of its investments, Vizient put the total at more than $12 million. Prestige now supplies 100% of surgical masks and up to 80% of N95s at Baptist Health South Florida, said George Godfrey, the Miami-based group's vice president of supply chain.

"The healthcare sector is trying to take control of its supply chain," said Luis Arguello, president of DemeTECH, a Florida-based manufacturer of medical masks, sutures, COVID tests and other supplies. DemeTECH is talking with "several" hospital groups seeking to invest, he said.

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