The COVID19 pandemic spreading across the U.S. and the world has prompted unprecedented demand for medical supplies, including ventilators.
The devices are critical for keeping people alive when they can’t breathe on their own, which can in severe cases be the result of a COVID19 infection.
The American Hospital Association estimates as many as 960,000 people may need the machines to survive during the pandemic. The expected surge in demand for a product that saves the lives of patients who have access has prompted companies that produce the machines to step up production.
Among those companies is Hamilton Medical Inc., in Reno, which imports and distributes ventilators from Hamilton Medical AG, one of the world’s leading ventilator manufacturers.
Bob Hamilton, whose grandfather founded the parent company, is the Reno-based CEO of Hamilton, Inc., and a board member for Hamilton AG.
In an interview with the Reno Gazette Journal and USA TODAY Network, Hamilton discussed how his company is ramping up production to meet demand, supply chain obstacles, how car companies and other manufacturers might help during the crisis and what governments and ordinary citizens can do to limit the spread of the virus and save lives.
While Hamilton said the company is continuing to receive parts and upping production to as many as 5,000 devices per month, he warns that more ventilators won’t resolve the crisis.
The machines are critical for acute treatment. But limiting the spread of the virus to ensure demand for life-saving machines doesn’t outstrip supply will require people across the country to follow expert guidance on social distancing and other recommendations, he said.
“People need to start heeding the warnings and being extra careful and cautious to prevent the spread,” Hamilton said.
He also said that while other manufacturers, notably General Motors and Tesla, have offered to help, there will still be complications to increasing supply.
Car companies, he said, could contribute by helping to procure supplies such as touch screens and computer chips. They could also provide expertise with beefing up production lines.
But the effort will still require expertise from people familiar with making complex medical devices, he said.
“This is not just like assembling a coffee maker,” Hamilton said.
The Q&A with Hamilton was lightly edited for length and clarity.
RGJ: What part of your operations are based in Reno?
Bob Hamilton: Our company, Hamilton Medical AG, is the company that designs and manufactures ventilators for the global market, that is based in Switzerland. What Reno is, is Hamilton Medical Inc., Hamilton Medical, Inc., is essentially an initial importer and distributor and service group for Hamilton Medical AG.
I basically field a sales team, they are all remotely based across the U.S., we have about 22 sales reps at this point in time, I’m sure that will be growing.
We have a clinical training staff based in the U.S. as well, and then we also have, essentially, our service team and then we have a warehouse and distribution center based here in Reno, then we have a smaller warehouse based out of Franklin, Mass.
RGJ: Any problems getting parts or supplies?
BH: We are, at this point in time for production of ventilators, we are doing well with our suppliers.
As we continue to ramp up production there may be potential issues with the supply chain but we are working with alternative options in that area, trying to spread out the supply chain so that we have got multiple suppliers when maybe before we only had one.
There are other components that we are having issues managing to procure, that would be things like oxygen hoses, air hoses and other items. We have reached out to multiple companies in an effort to broaden that supply chain a bit and meet our needs.
RGJ: Any problems protecting the workforce so they can stay healthy and keep going?
BH: We have implemented a large number of tactics as well as global strategy to minimize contact within the building as much as possible, deep cleanings with our cleaning service.
We bring in food now that is pre-packaged, individually wrapped, so that people aren’t going and leaving the building to get food.
With a warehouse and distribution center, unfortunately, we do not have the luxury to have all our employees working from home.
Probably 90 percent of the employees in Reno need to be in the office for us to function.
RGJ: What is the significance of keeping Reno rolling? What are they doing that is helping get ventilators to people?
BH: It really is a function of receiving, picking product off shelves, packing it and shipping. Most of our function in the Reno office is basically taking orders and processing and shipping orders.
RGJ:Some car companies, Tesla and GM, have said “we can make (ventilators)”; is it as easy as it looks?
BH: It is not as easy as it looks.
To give some of those bigger companies some credit, because I have been in some discussions, most recently with GM, they understand it is not that easy to put a ventilator together.
They don’t want to be in the business of putting ventilators together.
I think what they see is they have a bunch of assets that are essentially sitting on the sidelines, given that their industries have slowed down. And they want to find ways to deploy those assets to assist us in our mission to significantly ramp up quantities of ventilators that can be produced.
RGJ: How could partnering with a big car companies help in any way?
BH: Initially, they could offer up assistance with supply chain.
If you think about how many cars a company like General Motors would produce, and think about it, most modern cars have a lot of computing power built into them.
They have sources for ICBs, or integrated circuit boards. They have access to screens.
All of our ventilators now have touch screens on them. They can leverage that. They have know-how in terms of setting up production lines. They have know-how in testing systems and processes.
Any of those areas that they can provide assistance they have assured us they will absolutely do so.
The broad scope and nature of their business allows them to deploy assets that would allow us to hit the ground running more quickly than we would otherwise be able to.
RGJ: How could governments help?
BH: One of the biggest asks that I would have is to have some sort of centralized system to order ventilators.
There are times you get hit up from HHS or DoD or any of these governmental entities telling you they would like to have 1,000 ventilators or 3,000 ventilators or 500 ventilators and they come from all different angles and you are not sure if they are being ordered for the same pool or going to different locations.
I think having some sort of centralized purchasing system would make a lot of sense and make it helpful for us to allocate product.
We are getting hit left and right from basically anybody that purchases ventilators or could potentially purchase ventilators and asking to get orders filled quickly.
RGJ: What does (a ventilator) cost?
BH: It depends on what type of ventilator it is and how it is optioned. From a very base level, a basic ventilator, a simple ventilator that probably wouldn’t be very effective for a COVID patient you would be talking somewhere around $5,000 to $6,000.
Some of your higher end ventilators, fully optioned, with functionalities for all sorts of different diseases states, you are probably talking somewhere around $45,000, at least in the U.S. It varies from market to market.
RGJ: And for COVID specifically you need a more advanced ventilator?
BH: Yeah, based on the initial information that is coming out, these patients show they have acute respiratory distress, the lungs experience significant inflammation and it makes for lungs that are very stiff and difficult to ventilate.
You definitely need ventilators with a lot of capability and driving power to be able to ventilate these patients, or at least the sickest of these patients.
RGJ: So non-invasive ventilation isn’t going to work?
BH: Not on your sick COVID patients, non-invasive would not be an effective way to try to deliver oxygen or ventilatory support.
RGJ: How many ventilators are out there, and how many you think will be needed by a certain time?
BH: That I do not have any real insight into.
As far as how many will be needed, I think that is a question of how long, how steep the curve is, how quickly we can flatten it and whether or not we get treatment available and vaccines and how quickly those become available to the market.
With regard to what is out there I have seen multiple reports from the government as far as how many ventilators are available between hospitals and various stockpiles.
I know years ago they had done an actual survey to get a better handle on that number, I’m still seeing somewhere around 190,000 to 200,000. But that is a combination of all sorts of different vent suppliers and what constitutes a ventilator, I don’t know what they are counting specifically.
I can tell you from a global standpoint, Hamilton Medical probably has 70,000 to 80,000 ventilators installed globally at this time. And in the U.S., we have somewhere around, I don’t know, probably 15,000 at this point.
RGJ: And how many are you cranking out into the U.S.?
BH: Our goal short term is to be producing 4,000 to 5,000 a month, but that is dynamic.
That could increase. As long as we get additional staff and the supply chain holds up, we will produce as many as are needed and we can produce.
RGJ: That would be in the U.S.?
BH: That’s what we are doing out of Switzerland, we are still working to see what we could feasibly do or possibly do in the United States.
RGJ: Do you have any sense of how many we should have based on population?
BH: I do not.
I don’t have the insight as to where this is going to go.
I think a lot of this has to do with how effective people are in social distancing and quarantining those who may be sick and really just stopping the spread of this virus.
RGJ: How important is flattening the pandemic curve and slowing the spread of the virus? We can’t just rely on more ventilators to bail us out, right?
More ventilators isn’t the ultimate solution.
It is more of an acute treatment at this point in time to assist us while we figure out what we need to do as a country, as a world, to really stop the spread of this thing and start taking that seriously.
If it gets to the point where 30 or 40 or 50 percent of the U.S. population comes down with this, that could be a tough situation to fulfill all the ventilation needs for anybody.
That is why I think in general people need to start heeding the warnings and being extra careful and cautious to prevent the spread.
RGJ: What are the limitations on dramatically increasing the output?
BH: Honestly, short term it is finding alternative suppliers and it is your supply chain.
I think just finding able bodied people that have production skillsets and bringing them on board, although that seems to be relatively easy at this point in time to find these people.
But it takes time to train the, get them up to speed.
This is not just like assembling a coffeemaker. This is a highly technical device that has fairly highly regulated processes associated with it.
We have to make sure we build to a specific standard because it is life support. That is mission critical.
RGJ: Once a hospital gets ventilators, are they pretty durable?
BH: Ventilators, typically, at least up until this point in time, usually have a shelf life of about 10-12 years.
RGJ: Are costs going to change due to all this demand?
We at Hamilton Medical have not done anything with our pricing. We have not increased prices.
We are basically in the mode now to maximize output and make sure that people that need ventilators can get access to them.
RGJ: You’re a Nevadan, how do you think this has been handled in Nevada?
BH: In general, I think we as a state have been fairly progressive in this in trying to be as aggressive as possible.
I just hope that everybody understands how serious this is and everyone actually implements all the practices and social distancing being required.
Personally, I think it really resides, the responsibility falls on the individuals to practice this. The state, unfortunately, can’t do much to mandate that. They can just kind of give guidelines.
RGJ: Any lessons learned we can apply to next time to be better prepared?
BH: I think just in general, hospitals and/or governments should probably make sure they aren’t operating on such a thin margin of ventilatory products.
They should have more strategic stockpiles set up in the future.
A lot of hospitals run that fine line of having just enough product and they can rent or supplement here or there.
In this case we were definitely caught woefully short handed.
Benjamin Spillman covers the outdoors and environment in Northern Nevada, from backcountry skiing in the Sierra to the latest from Lake Tahoe’s ecosystem. Support his work by subscribing to RGJ.com right here.
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