How New York’s Emergency Ventilator Supply Went Up For Auction

@JustinElliott
ventilators, VersaMed

Reprinted with permission from ProPublica.

In July 2006, with an aggressive and novel strain of the flu circulating in Asia and the Middle East, New York City Mayor Michael Bloomberg unveiled a sweeping pandemic preparedness plan.

Using computer models to calculate how a disease could spread rapidly through the city's five boroughs, experts concluded New York needed a substantial stockpile of both masks and ventilators. If the city confronted a pandemic on the scale of the 1918 Spanish flu, the experts found, it would face a "projected shortfall of between 2,036 and 9,454 ventilators."

The city's department of health, working with the state, was to begin purchasing ventilators and to "stockpile a supply of facemasks," according to the report. Shortly after it was released, Bloomberg held a pandemic planning summit with top federal officials, including Dr. Anthony Fauci, now the face of the national coronavirus response.

In the end, the alarming predictions failed to spur action. In the months that followed, the city acquired just 500 additional ventilators as the effort to create a larger stockpile fizzled amid budget cuts.

Even those extra ventilators are long gone, the health department said on Sunday. The lifesaving devices broke down over time and were auctioned off by the city at least five years ago because the agency couldn't afford to maintain them.

Today, 14 years after the pandemic plan was released, the death toll from the novel coronavirus is climbing by the hundreds daily, and the shortage of ventilators threatens to push it higher still. On Friday, Mayor Bill de Blasio said that the city, which entered the crisis with around 3,500 ventilators, would run out of the machines this week. New York Gov. Andrew Cuomo said he was authorizing the state's National Guard to seize ventilators from less overwhelmed hospitals to be used where they are more urgently needed.

Early hopes that the federal government could use its Strategic National Stockpile to adequately supplement New York's supply of ventilators have faded amid revelations that key federal agencies were themselves woefully underprepared for a pandemic. The COVID-19 crisis has exposed the national stockpile as poorly maintained by the Trump administration and far too small to meet the competing demands that have predictably poured in from many states as the pandemic hurtles across the country. Indeed, some of the ventilators in the stockpile suffered from the same problem faced by New York — they fell into disrepair.

On Friday, President Donald Trump faulted New York and said he could not assure the state of more ventilators. "No," he told reporters. "They should've had more ventilators at the time. They should've had more ventilators." (Trump himself has been widely criticized for ignoring early warnings and downplaying the threat of the virus in the face of mounting global evidence of its lethality.)

New York City, with its plan 14 years ago, recognized that the nature of a pandemic — striking in many places in rapid and devastating succession — would mean that the city, in many ways, would be on its own.

"Since the pandemic will be widespread in the United States, the supplies from the federal Strategic National Stockpile may not be available and local caches will need to be relied upon," the 2006 report said.

In a newspaper interview that year, Dr. Isaac Weisfuse, then a deputy commissioner at the health department involved in pandemic planning, said the city could not count on the federal government. "We do understand that New York City will be responsible for New York City in terms of dealing with any pandemic," he said.

The story of New York's ventilators, as with many of the pre-crisis pandemic reports that have come to light at the federal level, is one of grave vulnerabilities that were made plain by experts but never were made budget priorities by policymakers.

The city health commissioner who spearheaded the 2006 pandemic planning effort, Thomas Frieden, left three years later to run the U.S. Centers for Disease Control and Prevention, and key elements of the plan had not been implemented. Frieden, who now leads a public health philanthropy, has emerged as a prominent critic of the country's inadequate preparations, writing in January that "we are living the consequences of being underprepared for the next big global epidemic."

Another prong of the Bloomberg pandemic plan — the mass distribution of masks to the public — has not happened either, even as experts are now reversing earlier guidance and urging everyone in hot spots like New York to cover their faces. Instead, de Blasio last week advised residents to use a scarf, a bandanna — something "real homegrown." The city's hospitals still need over 3 million masks just to safeguard health care workers, he said.

In interviews with ProPublica, other former city health officials said they were also worried about other threats and that there simply wasn't enough money to fully prepare for every possibility.

"It's easy to say in retrospect we should have spent all our money on pandemic influenza, but at the time you just don't know what was going to happen, and there were other threats," said Weisfuse, who worked under Frieden and led the city's disease control division until 2012. "I feel good about what we did, but obviously for this situation it was not enough."

Following the avian influenza scare and the pandemic planning of the mid-2000s, the city faced its first major test when H1N1 swine flu arrived in 2009.

Officials feared it would become a major outbreak. Some schools were closed and there were high-level discussions about shortages of supplies. But the disease abated, with a substantially lower death rate than the coronavirus, and the city turned much of its attention back to the aftermath of the recession that had devastated New York's economy.

"We learned the wrong lesson, I think, from swine flu," Dr. Douglas Ball, former medical director of the city health department's Bureau of Emergency Management, told ProPublica. He compared it to the London Blitz during World War II: "When people got missed by a bomb that hit nearby, they thought they were safe. When really they should have thought, 'Wow, we were so lucky.'"

Years of budget cuts to the city's health department followed, limiting the city's ability to prepare, even as planners still feared a major pandemic.

In 2014, Nicholas Cagliuso, a top emergency management official for the city's public hospitals, told participants in a pandemic training session that cost-cutting had hobbled the hospital system's preparation, in particular its ability to amass a stockpile of emergency equipment.

Instead, the hospitals had taken to holding just enough to meet day-to-day needs. It was a practice that was antithetical to preparing for a pandemic, which requires emergency supplies to be in easy reach, Cagliuso said. "If a resource is not available by foot, it does not exist."

In a statement on Sunday, Michael Lanza, a spokesman for the city's health department, said pandemic preparedness efforts had been undermined by the loss of federal aid.

"These plans depend on ample federal assistance, and Congress has not appropriated enough funding to state and local jurisdictions to adequately prepare for emergencies," he said. "Annual federal public health and health care preparedness funding levels are not sufficient to prepare for an emergency of this scale and scope."

Despite the warnings in the 2006 plan and the initial efforts to build a stockpile, de Blasio spokeswoman Avery Cohen said in a statement on Monday that cities "do not typically stockpile ventilators and that such emergency reserves are the responsibility of state and federal government.

"Despite our best efforts to stretch our resources, there was no foreseeing a crisis of this magnitude."

Michael Bloomberg took office just a few months after the Sept. 11, 2001, terrorist attacks.

The planning-obsessed mayor wanted to be better prepared for the next crisis. "Mayor Bloomberg wanted there to be every plan for every disaster you have: coastal storm, pandemic, terrorist attack — and make sure it was up to date and we were going to drill it," said Edward Skyler, the city's former deputy mayor for operations.

And then, across the globe, lethal strains of the flu began to spread. In 2002, SARS emerged in southern China, and then in 2005, avian influenza swept across several countries in Asia.

Frieden, Bloomberg's first health commissioner, believed the city needed a pandemic plan. A committee of experts was assembled and the 266-page plan was published in July 2006. New York City, Frieden wrote in the introduction, is "uniquely vulnerable to infectious disease threats."

The document's assumptions are prescient: a future pandemic could have a 2 percent fatality rate, a 30 percent citywide infection rate and a delay of many months waiting for a vaccine, which could place an enormous strain on health care workers and supplies.

In 2005, the city's health department had begun to survey nearly all of the public and private hospitals to understand the equipment needs they would face in a pandemic. It found New York's hospitals had roughly 2,700 ventilators, far from what would be needed in a severe outbreak.

Even though the plan stressed that purchasing, storing and maintaining ventilators was a large endeavor, the city began to take steps to form a stockpile. It was vital because in a pandemic, cities and states would be competing for supplies from the Strategic National Stockpile. (Last week, White House adviser Jared Kushner claimed that the stockpile was not for the use of the states at all, contradicting a government website.)

In 2006 and 2007, following the release of the pandemic plan, the city purchased a few hundred "disaster-ready" ventilators. The $1.76 million contract went to a New York-based company called VersaMed.

Jerry Korten, the CEO of VersaMed at the time, recalled city officials understanding that, in case of a major pandemic, the ventilators would not be enough, he told ProPublica.

"New York knew they would need a lot more ventilators," Korten said. "It's a very sad situation that no one invested in what was needed when it was needed. It's just too late now."

By 2009, the city had trained some of its hospitals on how to use the new ventilators, in case they were needed to increase capacity. The training was intended to help the health department evaluate the ventilators, and after the training, the city stored the devices in a warehouse for future use.

"The idea of this warehouse is something that we could send trucks to and load ventilators or other equipment and ship them right to hospitals quickly," said Weisfuse, the former deputy commissioner, who is now an adjunct professor at Cornell University Public Health. "They were on site, and it was just a matter of getting them to the right place."

But after 2009, the effort to create a large ventilator stockpile petered out. "We tried to fill in the gap as best we could," Weisfuse said. "That's where we left it. We also had to spend money to fill the gap for other problems too, like bioterrorism."

VersaMed was acquired by GE Healthcare in 2008 and the company discontinued the line of ventilators New York had bought, Lanza, the city health department spokesman, told ProPublica. "This was beyond our control but had a direct impact on cost and viability of maintaining a stockpile." Annual maintenance costs for the 500 VersaMed ventilators, which includes replacing batteries and degrading parts, ran over $100,000 per year, Lanza said, adding that the ventilators were ultimately auctioned off by the city. It's not clear who bought the devices and for how much. GE did not respond to questions related to the VersaMed ventilators, but a spokesperson said the company "provide[s] maintenance on any equipment that is under a service contract with GE."

Hospitals were also reluctant to spend money to store machines and protective equipment that they did not need for day-to-day operations.

Over the past few decades, cuts in Medicaid reimbursement and other fiscal pressures have reshaped the hospital industry, leaving the city's public and private medical centers with, collectively, thousands fewer beds.

The city's network of 11 public hospitals, which includes Elmhurst Hospital in Queens and Bellevue in Manhattan, regularly operates at a large deficit and in recent years has relied on city funding to fill the gap. The network is a vital provider of health care to many poor New Yorkers. Nearly 70 percent of patients who use the public hospitals are uninsured or on Medicaid.

With federal grant funding, the city had also planned to purchase 1.1 million face masks for use in a pandemic. But after funding was reduced, the city instead bought only 216,000 masks, spending roughly $84,500, a state comptroller audit later found.

Asked about the masks, the department said it "did purchase N95s in quantity but eventually all expired, and it became cost-prohibitive to replace them in any meaningful quantity." The department said that it did, however, acquire over 20 million surgical face masks prior to the coronavirus pandemic, millions of which have been distributed to health care and front-line workers.

Asked about the pandemic plan, Frieden said in a statement that "any health department in the world would be challenged by an outbreak of this severity and scale." He declined to answer specific questions about the fate of the ventilator and mask plans.

After the 2008 financial crisis hit, tax revenues dried up. Over the next five years, the city health department's budget was slashed by about $290 million, or 17 percent, and federal preparedness funding plummeted.

Some health department spending, such as services for developmentally disabled children, was mandated by law and could not be cut. So the agency had to look for other areas to cut, and infectious disease work was vulnerable.

In 2009, swine flu arrived in New York, the first pandemic scare since the Bloomberg plan was published. Hundreds of students became ill at a high school in Queens, and city officials were worried that the disease could overtake the city.

"There was some discussion that if it were as bad as projected we would be short of ventilators at that time," a former top city health official recalled. There was no time to buy the machines during the outbreak, and the disease ultimately receded more quickly than expected.

The health department did not receive any requests for ventilators from its small stockpile, said the former deputy commissioner Weisfuse. The possible shortfall of ventilators during a pandemic, once a key issue, again faded.

In the later Bloomberg years, the health department was focused on planning how to distribute huge volumes of Tamiflu, in case of a flu pandemic, or antibiotics, in case of anthrax, according to the former top health official. "To the extent people were thinking about a ventilator shortage, that was a secondary or tertiary issue," the former official said.

In a statement, Bloomberg spokesman Stu Loeser said: "Our Administration was among the first governments in the country to comprehensively plan for a pandemic health crisis, and key parts of our program were implemented successfully and harnessed in our effective H1N1 virus response in 2009, which itself became a national model for public health emergency planning."

Pandemic planning continued under de Blasio, who took office in 2014.

That year, the New York-New Jersey office of the Federal Emergency Management Agency and a Wall Street trade group sponsored a series of pandemic training sessions online attended by a couple of hundred corporate executives and government officials.

Cagliuso, then the assistant vice president for emergency management for the city's public hospital system, gave a presentation warning of the difficulty obtaining supplies during a crisis.

"Supply chain breaks are a very real issue. Much to the detriment of those of us in emergency management, we have moved to just-in-time supply chains," Cagliuso said at the time, referring to hospitals' practice of limiting stockpiles of medical equipment to save money. "So I had some very spirited discussions with my supply chain leadership. But nonetheless I also realize the business and the way that we are moving."

Cagliuso, who still works for the hospital system, did not respond to a request for comment.

But massive cuts in federal funding hampered the city's ability to act on experts' warnings. At an infectious disease conference in 2012, Dr. Jay Varma, then the city's deputy commissioner for disease control, warned that "the age of austerity" was "hitting infectious disease programs hard."

Three years later, Marisa Raphael, then the deputy commissioner of the office of emergency preparedness and response, repeated this warning while testifying before Congress. "The greatest danger to our progress is the decline in federal emergency preparedness funding," she said. Critical CDC programs had lost over a quarter-billion dollars in funding since 2005, and Raphael said the department had to cut almost half of its public health preparedness workforce.

The supply-chain issue surfaced yet again in 2018 when the public hospital system participated in a pandemic exercise with Johns Hopkins University on the 100th anniversary of the 1918 flu. Cagliuso and several colleagues produced a paper in an academic journal about what they learned.

In short: New York City would likely be on its own in case of a pandemic.

"State and federal stockpiles of medical supplies exist [that] can be rapidly distributed, but a pandemic scenario is likely to complicate resource allocation on local and sub-national levels because of competing areas of similar need, limiting the allocation and deployment of these resources," they wrote.

Their proposed solution was not to beef up the city's stockpiles. Rather, they called for creating a technological fix, a dashboard that would "automate the presentation of data to decision-makers."

A spokesperson for the hospital system did not respond to requests for comment.

In 2015, the state updated its guidelines on ventilator allocation during a possible influenza pandemic and calculated that the state had about 7,250 ventilators available in acute care facilities, including in New York City, with an additional state stockpile of 1,750 machines. The state recognized that if a pandemic swept across multiple regions at the same time, it could not rely on the federal stockpile to fill the gap.

"The State's current approach to stockpiling a limited number of ventilators balances the need to prepare for a potential pandemic against the need to maintain adequate funding for current and ongoing health care expenses," the report stated. In a severe pandemic scenario, "New York will not have sufficient ventilators to meet critical care needs despite its emergency stockpile." The report lays out guidelines on how to decide which patients should be placed on ventilators if hospitals are forced to ration resources, withholding devices from patients with poorer odds of surviving. The report did not specifically address the needs or current resources in New York City.

The roughly 3,500 ventilators in New York City hospitals had going into the coronavirus crisis compares to a total of 2,688 ventilators the health department counted in a 2005 survey — an increase, to be sure, but a fraction of what it expected to need if faced with a serious pandemic.

The mayor has repeatedly said the city will need 15,000 ventilators from the federal government, but the city has so far received only 2,500.

While de Blasio has cautioned that ventilator needs change by the day or hour, he said on Friday that New York City projects it requires at least another 2,500 to make it through this week. "The ventilators to me are one of the clearest examples of life and death," the mayor explained. "If we're going to save every single life we can save, we must have the ventilators we need exactly where we need them, when we need them."

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