 |
| Rick Ferreira |
Today’s hospitals are providing care in a financially challenging environment. According to a June 2007 study by PricewaterhouseCoopers, U.S. hospitals’ median operating margin in 2005 was a razor-thin 2.89 percent, with medical supplies accounting for the greatest expense after staffing. Earnings like that make it tougher for institutions to carry out their missions.
Fortunately, many hospitals have implemented a medical-device reprocessing program through a commercial third-party reprocessor. This allows these hospitals to significantly lower their operating costs while promoting environmental responsibility.
The savings generated through reprocessing are often funneled to key operational areas and improved patient care. Small hospitals can save $100,000 or more per year, while hospital systems can save millions annually. By way of comparison, a small hospital would need to increase revenue by roughly $3.5 million to gain an additional $100,000 in margin; to gain an extra $1 million in margin, a hospital system would need to increase revenues by $35 million.)
The Basics
Hospitals have been safely using reprocessed single-use devices for more than 20 years. Reprocessing is a multi-stage sequence in which specifically selected, high-cost, high-volume medical devices are cleaned, sterilized and tested to ensure that they will perform according to original equipment manufacturer specifications. Admittedly, reprocessing devices that manufacturers label as “single use” might initially raise a few eyebrows. However, the term “single-use device” was devised years ago by the OEMs, not the Food and Drug Administration, often for economic reasons. Many single-use devices are made from rigid, hard metals or durable polymers and plastics, some of which are even approved by NASA for space flight. With the proper procedures applied, certain medical devices can be safely reprocessed up to five times.
Hospitals derive savings by buying reprocessed devices for an average of 50 percent less than the price of the same devices new. They may buy only the devices they originally sent or acquire them from reprocessed stock originating with other hospitals. Total savings will depend on the hospital’s size and the reprocessing program’s comprehensiveness and efficiency. As a rule of thumb, however, the more devices reprocessed, the greater the financial return. The most effective programs have ongoing support from hospital executives, physicians, nurses and anyone else involved with the program.
Every single-use device a hospital chooses to reprocess also contributes to a greener world. The impact is tangible: In 2006, the reprocessing industry eliminated more than 1,000 tons of medical waste through recycling and reprocessing and helped hospitals and surgery centers save more than $1.2 million in medical waste stream disposal costs. In addition, more than 2,500 institutions, including almost 90 percent of the hospitals on the 2007 U.S. News and World Report Honor Roll, reprocess a portion of their devices.
Opportunity for Savings
Over the past four years, a 192-bed hospital in the Southeast has lowered its costs significantly on the devices it reprocesses, which include tourniquets, SCD sleeves, trocars and other devices. As part of a physician incentive program started in January 2005 to encourage reprocessing, the hospital directs half of all reprocessing savings toward new equipment and software programs used by the physicians. So far, that total has amounted to $198,000.
Based on savings from reprocessing, the hospital has purchased 20 major items, including a bipolar generator, an ankle distraction system, three bariatric scopes and an OR table.
Children’s Hospital of Michigan in Detroit started its reprocessing program in the electrophysiology cath lab about a year ago and has so far reprocessed 70 intracardiac echocardiography catheters. As an OEM device, each one costs $2,800. “Reprocessing reduced this expense by more than half, allowing the hospital to redirect approximately $100,000 for other purposes, including lab improvements,” says Paul Webster, the 25-bed hospital’s lead technologist in the cath lab.
The first step in reprocessing is collecting the used devices that are appropriate for reprocessing from specially marked bins from designated points on the floor. In designing device-collection systems inside the hospitals, a reprocessing representative maps a workflow to ensure user convenience; the goal is to make it as easy as possible for nurses, physicians and other personnel to collect items and to seamlessly reintroduce reprocessed devices into the supply chain. “Training the staff to properly collect EP catheters was easy for us,” says Webster. “It is business as usual to get the catheters in the collection bin, and our representative picks them up on schedule.”
FDA Oversight
Reprocessing is regulated by the FDA, which issues a Form 510(k) clearance for each reprocessed device after a reprocessor has demonstrated the efficacy of its systems. This procedure is identical to the clearance steps required for original devices. Sometimes, in fact, the same FDA reviewer who cleared the OEM instrument for market often reviews and clears the 510(k) application for the reprocessed device.
Industrywide, only about 2 percent of all medical devices are suitable for reprocessing. They tend to fall into the following categories:
- Cardiovascular devices, including non-lumened electrophysiology catheters and compression sleeves
- Orthopedic/arthroscopics, such as external-fixation devices and arthroscopic burrs and shavers
- Endoscopics/laparoscopics, including trocars and ultrasonic scalpels
- Gastroenterology devices, such as biopsy forceps
- Many types of open but unused devices such as clamps, shunts and chest drains.
“Some of the surgical technicians here, including me, were initially skeptical about reprocessing,” says Cathy Lundgren, CST bariatric surgical technician at St. Mark’s Hospital in Salt Lake City, which began reprocessing some devices last fall. “But after a couple of my colleagues toured a reprocessing facility, they came away convinced that it was completely safe and the right thing to do. Now, we would have no problem if the devices were used on us.”
Reprocessors also take complete responsibility for the instruments they receive. Reprocessing facilities must comply with the FDA’s Quality System Regulation, the rules and regulations that help ensure that medical devices are safe and effective for their intended use, and are inspected regularly. Employees are highly trained and certified. And, while batch inspections of OEM equipment are the standard, each and every reprocessed single-use device is individually inspected to ensure it will function properly.
The FDA has noted unequivocally that reprocessed single-use devices have not caused injuries or any patient deaths. Additionally, the Association of Medical Device Manufacturers has stated that no medical device manufacturer member company has been sued for harming a patient through improper reprocessing or from a reprocessed device. Reprocessing is a safe, mainstream practice with financial, environmental and operational benefits. Hospitals that commit to lengthening the lifecycles of certain single-use devices can strengthen their budget at that same time.
Rick Ferreira is the chief operating officer of Phoenix-based Ascent Healthcare Solutions.
GIVE US YOUR COMMENTS!
HHNMostWired welcomes your comment on this article. E-mail your comments to hhn@healthforum.com, fax them to Most Wired Magazine Editor at (312) 422-4500, or mail them to Editor, Most Wired Magazine, Health Forum, One North Franklin, Chicago, IL 60606.
If you would like a FREE Subscription to Most Wired OnLine, please click here to register.
This article first appeared on September 26, 2007 in HHN's Magazine online site.
To respond to this article, please click here.
