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With Excess National Supply, Exchanges Will Allow U.S. Hospitals to Continue Meeting Ventilator Demand

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During the COVID-19 pandemic, the Federal Government has worked tirelessly to “bend the curve” and prevent healthcare utilization from exceeding the healthcare system’s capacity. Given ventilators’ life-saving role, it is important that demand stay below supply so that no person who is in need of a ventilator is denied one.

Federal policy has achieved this objective so far, and the Trump Administration recently announced the voluntary Dynamic Ventilator Reserve to ensure that patients everywhere can continue accessing ventilators. The Dynamic Ventilator Reserve will deploy ventilators from areas throughout the country with ample excess supply to places that may need a bigger buffer to avoid local shortages.

Projecting out over the next few weeks, the Council of Economic Advisers (CEA) finds that the existing national ventilator supply continues to be sufficient to handle total national demand—even under the most aggressive virus spread scenarios identified by the U.S. Centers for Disease Control and Prevention and before the arrival of new units produced by United States industry partners. Furthermore, CEA finds that the Dynamic Ventilator Reserve is unlikely to need to be supplemented by the Federal Strategic National Stockpile (SNS). In other words, data indicate that the goal of getting healthcare supplies to where they are needed can be accomplished by reallocating national excess supply instead of every jurisdiction stockpiling in excess of projected demand.

As of April 12, the United States’ supply of ventilators included 95,000 in hospitals and 10,000 in the SNS. Nationwide ventilator demand projections shown in Figure 1 come from CEA simulations based partly on the University of Washington’s Institute for Health Metrics and Evaluation (IHME) forecast of domestic ventilator needs. CEA’s projections consider COVID-19-related and usual (absent COVID-19) ventilator usage in both a baseline and an aggressive 95th percentile scenario (indicating that 95 percent of simulations gave lower demand trajectories). Under the aggressive scenario, peak ventilator demand is projected to occur between April 19 and 24, and aggregate United States ventilator supply would still be 2.1 times higher than demand during this time. This finding suggests that even without tapping the SNS, there is enough excess supply nationwide to reallocate ventilators to areas that may face shortages.

Hospitals participating in the Dynamic Ventilator Reserve use an online platform to post a percentage of their individual excess supply based on their projected demand over the next week. Depending on total projected demand across the network of hospitals participating in the Dynamic Ventilator Reserve, individual hospitals would send up to the amount they listed on the platform to other network hospitals that are projected to experience shortages. Because the timing of each hospital’s peak demand will vary daily, the Dynamic Ventilator Reserve provides insurance against shortages to all hospitals that participate in the network while reducing the burden on the SNS. The incentive to participate is clear for hospitals that expect imminent shortages, but hospitals with current excess supply also benefit from participating. Joining the network offers valuable insurance against the risk of future local shortages caused by the staggered and uncertain timing of peak ventilator demand across the country.

The Dynamic Ventilator Reserve will provide enough ventilators for the hospitals participating in the network when their aggregate supply exceeds their aggregate demand. Figure 2 plots the probability that the SNS would need to be tapped as a function of the fraction of excess ventilator supply that individual hospitals participating in the Dynamic Ventilator Reserve agree to post on the platform each week (allocation rate). The blue curve represents every hospital nationwide joining the Dynamic Ventilator Reserve, while the red curve represents only the largest 10 percent of hospitals by ICU bed capacity joining. In either case, the figure shows that a 15 percent allocation rate makes the network self-sufficient in terms of ventilators without any need to tap into the SNS.

The promising news about United States ventilator supply, production, and management offers a roadmap for other critical supplies needed to combat COVID-19. As this model develops, it can help ensure that necessary healthcare equipment reaches areas in need through public-private partnerships. With continued collaboration and innovation across industry and all levels of government, the United States can keep meeting domestic COVID-19 healthcare needs by using the Nation’s aggregate supply as a dynamic stockpile

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