Rebuilding American Medical Manufacturing
The American healthcare system depends on 100,000 critical goods that are manufactured in China and overseas. The pandemic showed us what happens when that supply chain is disrupted, but what would happen if China cut us off completely?
We need to invest in manufacturing today, or we risk the catastrophic collapse of our healthcare system in a world with enough doctors and nurses but without the tools they need to do their jobs. This would cause a needless loss of life on a massive scale.
The only thing Republicans and Democrats seem to agree on is that manufacturing is good and China is bad. That’s why we have seen massive investment in semiconductors that power AI technology and manufacturing for making batteries here in the United States.
Don’t get me wrong, it’s a lot more fun to talk about how AI is diagnosing cancer, or how robotic surgery results in faster recovery times and fewer risks. As someone who built multimillion-dollar software companies I’ve seen firsthand how technology changes the world.
But there’s a problem. While headline-grabbing medical technology can define and diagnose problems that exist in healthcare, it doesn’t do the boring, everyday medical stuff that makes modern medicine possible.
Semiconductor factories won’t make the gauze that a nurse needs to bandage a wound and doctors don’t need lithium batteries to power a tongue depressor. As a nation, we’re investing in technology that will help predict who needs surgery—but less than1% of the 100,000,000,000 nitrile gloves American nurses and surgeons wear to perform those surgeries are manufactured on American soil.
That’s why we need to make critical goods here.
Learning the lessons of globalization from China.
In 2010 China laid out a plan to become the global medical manufacturing superpower.
At the time, they were importing 90% of their critical medical supplies from the US and Germany. But that quickly changed when the Chinese government made it illegal for Chinese hospitals to buy any products manufactured outside of China.
The Chinese government also invested money and gave low-interest rate loans for manufacturers to scale.
Within a few years the Chinese hospital systems, which had previously relied on western imports, now had locally sourced alternatives from newly-established government-subsidized factories.
With a guaranteed domestic customer base, and free money from the Chinese government, it was incredibly easy for these Chinese brands to expand sales into the United States, undercutting American manufacturers of critical supplies. In order to compete, many US companies like 3M outsourced their entire factories to China–also taking advantage of Chinese-government capital to move production there.
In less than a decade, we went from making most of the critical supplies we needed to making almost none.
Now instead of benefitting from efficient, regulated, sustainable domestic manufacturing, we exploit third-world countries and strip-mine the land for resources; we send those resources to factories with sub-human health and safety standards; we ship those critical goods on massive ships that generate more pollution than all the world’s cars–and we do it all in the name of saving a few pennies.
Our assumptions about globalism turned out to be wrong. We discovered that cheaper is not only less sustainable but less reliable. Our fragile trade relationships may have survived the pandemic, but they will not survive another crisis.
A Chinese invasion of Taiwan would almost certainly disrupt world trade, causing massive shortages for the 100,000 critical medical supplies required to do everyday procedures that keep people alive.
When the pandemic hit, American doctors and nurses couldn’t get the PPE they needed quickly enough from China. Answering the call, we built an entire manufacturing business in six weeks inside the United States. But we did that with the help of Chinese machines and expertise.
If China cuts us off, it will take us years to rebuild the manufacturing we need for critical supplies.
We must be proactive; we cannot wait for whatever crisis comes next–our lives will depend on it.
But we don’t need to copy China’s playbook. We don’t need our government to pay for the transition back to the way things were. And we don’t need to force hospitals to buy everything from American manufacturers.
The solution isn’t complicated or costly: we just need to make 10% of all critical goods in North America.
Take it from someone who has done it: building manufacturing for a new product line from nothing is almost impossible, but scaling from a small production is extremely doable.
American healthcare providers need to commit to spending just 10% of their medical supply budget on American Made products. This is the 10% Challenge.
• If you’re a Doctor or Nurse, turn over that box and note where the products you need to do your job are made. Ask your leaders what their plan is if China refuses to keep selling us these products and encourage them to take the 10% challenge.
• If you’re an American consumer, be curious where critical supplies come from. Ask your medical providers where their supplies are made and if they’ve heard of the 10% challenge. Change starts from the bottom and won’t happen if the American people do not care about this issue.
• If you’re a hospital executive, consider the real cost of being without the supplies that your team needs. Talk to American manufacturers about their costs, and you’ll be surprised at how cheaply you can get products made in the US with the long term commitments that are needed to make critical supplies here.
• If you’re an elected official, look at all the government spending that was wasted when China couldn’t get us the supplies we needed during the pandemic. Consider how much worse it could be if we were suddenly cut off from all the critical supplies we need.
• American manufacturing, when done right, bring jobs, grows the economy, improves the environment, promotes safety and fair wages–but more importantly, it ensures that our healthcare system will have continued access to the critical goods we need to keep our country running.
Join me in taking the 10% challenge that we need to save American healthcare.