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KSR Publishing, Inc.
Copyright © 2009

People, Places, Processes & Products that Influence the Supply Chain

INSIDE THE CURRENT ISSUE

October 2007

People & Opinions

Worth Repeating

"From a total cost of ownership perspective, disposables bring in more efficiencies. With reusables, there are factors that need to be considered, such as the laundering process and having many different hands touching [the product along the way]."

Carl Hill
director of marketing, Cardinal Health

"We’re seeing trends in the direction of specialization of draping products that can be customized to meet the very specialized needs of specific procedures."

David Parks
G.M. of global business management
Kimberly-Clark Health Care

"Putting an inventory management system in pharmacy is leaps and bounds ahead of where you’re at if that’s all you can do. You can standardize and consolidate all you want but if you don’t set up a policy and make it viable it won’t work."

Trina Kaylor, Pharm.D.
division director of pharmacy, HCA

"No one in the healthcare supply chain is immune from the problems of dirty data. GPOs and vendors struggle, too, with matching specific buying organizations to specific contract pricing. That’s why unique standard identifiers for products and organizations, down to the ship-to level, are so important."

Karen Conway
director industry communications, GHX LLC

"I believe the key to improving sharps safety lies with teamwork and a willingness to be open-minded with all team members. All team members have to embrace the word ‘change’, and improve their working environment for all those individuals who work in a periOperative environment."

Brian Mach
chief operating officer, Sandel Medical

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In-house reprocessing – why not?

by Nathan Belkin, PhD

The issues on the reuse of medical devices that are labeled as allegedly being for ‘Single-Use Only’ (SUD) have been controversial since they first became available. As a quality oriented, cost-conscious healthcare consumer who retired some 16 years ago following a 40-year career in the healthcare industry, I believe that there are some matters that were not discussed in your May article ("Third-party reprocessors gauge turbulent past, ongoing battle plans") that should be brought to your readers’ attention.

Historical background

Those reading this commentary who were not around during those "good ol’ days" may not know that the availability of SUDs dates back to the early 60’s. Despite their being heavily promoted as being easy to use, highly efficient, worry-free and, of course, labor saving, the mind-set of the provider community simply didn’t buy into their attributes and regarded them as being unduly expensive and wasteful. Nevertheless, their popularity accelerated not because of their attributes but rather were skewed by a reimbursement system that allowed the healthcare provider to charge Medicare for the cost of the SUD to which he could add an additional 35% to 40% "handling charge." Thus, as a line-item charge, the SUDs became revenue generators. The difference in the cost of a comparable, less-expensive item processed in-house was irrelevant.

By 1982, the packages for more than two-thirds of the thousands of sterile devices used read "for single-use only."1 Since the line-item charge for SUDs is now an integral part of today’s prospective reimbursement system and the 467 Diagnostic Related Groups (DRG), it is more than likely that the percentage may be even higher.

Even so, a variety of surgical items labeled for ‘single-use only’ continued to be reprocessed in-house. In response to a 1998 survey, 70% of the operating room managers that responded indicated that items such as drill bits, mesh, ear implants, vascular grafts, felt, sutures, disposable endoscopy instrumentation, gowns, cautery hand pieces, trocars, saw blades, transurethral prostatic resection loops, laser fibers, burs, biopsy force for gastrointestinal endoscopy, and endoscopy staples were being reprocessed. This can only be interpreted to mean that millions of dollars were being wasted annually by those institutions that were not reprocessing these types of SUDs.

Questions to be answered

Q As stated in your article, the determination for identifying an item as being for single-use only has always been and still is, made by the original equipment manufacturer (OEM). IT IS NOT DETERMINED BY THE FDA. Thus, the first question that logically arises is why the FDA does not require OEM’s to identify SUDs for what they really are - REUSABLE! How or by whom they are reprocessed should be incidental.

Furthermore, it is to be noted that many of the items labeled as SUD are no different from those being shipped to other countries (e.g. Canada, Europe and Australia) where they are not considered to be SUDs.

Q The suitability of reprocessed SUDs for another use is a matter of public record. For example, the Cleveland Clinic retrospectively studied 3,000 electrophysiology mapping and 2,000 reference ablation procedures, of which 97% used one or more reprocessed nonlumen catheters and found not one infection. If any one of the members of their professional clinical staffs had any reason to be suspicious of an adverse outcome as a result of their use, would they have continued to reprocess them in-house?

Nationally, and for a period of approximately 3.5 years (August, 1996 through December, 1999), the FDA’s Medical Devise Reporting (MDR) system documented only 245 adverse events associated with the reuse of SUDs.2

This is relatively few compared with the literally thousands of MDR’s that the FDA receives on a yearly basis for new devices. (Personal communication, FDA). In addition, the Centers for Disease Control and Prevention (CDC) has few reports of adverse outcomes associated with the reuse of SUDs.

Not to be overlooked is a report released by the General Accounting Office (GAO) that indicated that the cost of reprocessing a single-use item was less than 10% of the cost of a new one, thus making it a very safe and cost-effective process.3

Hospitals’ impeccable records and the economic benefits that accompany their reprocessing of all the medical devices in-house are a given. Under the circumstances, it is not reasonable to believe that this would warrant the FDA’s ‘grand-fathering’ those SUDs that have been reprocessed in-house rather than having the institutions comply with their costly reprocessing regulations?

Q Hospitals have been reprocessing a myriad of reusable medical devices for almost a century without the need for intervention, let alone the assistance of any regulatory federal agency at any time. Why must the FDA suddenly be brought into the picture?

The costs for the development of the FDA’s regulations are significant. Even years prior to their enactment in 2000,4 the agency had already indicated that it
required $1,000,000 to evaluate device reprocessing. Subsequently, a bill appropriating $55,000,000 for 522 full-time equivalents required to monitor the premarket reviews submitted by both hospitals and outsourcers was proposed in the U.S. Senate. 5

As stated earlier, those hospitals that have been reprocessing SUDs in-house are now considered by the FDA regulations to be manufacturers. Thus, they must submit the same type of paperwork as third-party reprocessors. Because the agency was not able to differentiate between them, they arranged for a survey to find out how many reports had been submitted by hospitals. They found that 76% of the hospitals were NOT reprocessing SUDs. Of the remainder, 20% were outsourcing the reprocessing and only a meager 4% - 200 of our nation’s healthcare institutions, were reprocessing in-house.

Another survey of 675 hospitals (sponsored by a joint group - the American Hospital Association, the Association for Professionals in Infection Control and Epidemiology, the American Society of Hospital Central Service Personnel and the Federation of American Hospitals) found that only 25% of hospitals used resterilized SUDs. Despite these relatively small numbers, an FDA policy analyst was quoted as saying that the agency had not been able to make as many inspections as they would have liked because of the ratio of hospitals to investigators.

Q The fiscal condition of our nation’s healthcare delivery system may be partially attributable to the implementation of the balanced budget amendment of 1997 that reduced the reinbursement for a hospital’s services. Nevertheless, in an attempt to reduce their costs, healthcare providers found one way of doing that was to reuse those medical devices that were allegedly described as being ‘for single-use only’. In response to their commendable attempt, it is to be noted that one FDA official has commented that because of the high cost of reprocessing under the agency’s rules, the "hospitals biggest task will be of complying with our rules".

That having been said, the question that logically arises, is whether it is really the FDA’s intent to discourage hospitals from reprocessing SUDs? If so, for whose benefit? In addition, is the agency’s return on the investment of their regulations commensurate with the benefit to the healthcare consumer?

A proposed solution

1) The FDA should immediately mandate that OEMs stop and decease labeling SUDs as they have been doing for all these years. To permit the manufacturers to continue this self-serving, deceiving and deliberate misrepresentation of products that have been proven to be reusable is unconscionable.

2) For those hospitals that have the capability of reprocessing the newly labeled reusables, those items should be grandfathered and the hospital relieved from having to comply with the agency’s reprocessing regulations. They will then be permitted to begin and/or continue to process the items without intervention.

3) The FDA should then continue to regulate and monitor the third-party reprocessors as they have been and in the same manner as they have been doing of the OEMs. Those hospitals that do not have the capability of reprocessing the medical devices can continue to utilize the outsourcer’s service. Those for whom a third-party reprocessor is not available can simply continue to discard the items after their use just as they have been doing.

Conclusion

Every healthcare provider is beleagured with the never ending and escalating pressures to not only contain costs to a minimum but to reduce them as well. Those that have the capability to reprocess their requirements economically in-house should therefore be encouraged to do so. To needlessly add a burdensome and needless layer of cost of administrative functions to their doing so is unreasonable.

Abraham Lincoln once described our government as being one "of the people, by the people and for the people". In this particular instance, it would appear that it has done it TO the people.

References

1. Bruch, S.C., In-hospital versus industry sterility assurance: is there a double standard? Current perspectives, American Association for the Advancement of Medical Instrumentation, Arlington, VA, 1982, Technology assessment report 4-82, 19-32

2. Reusing medical devices:ensuring safety the second time around, FDA Consumer Magazine, 2000:34-37

3. Pugliese, G. and Favero, M.S., GAO issues report on reuse of singloe-use medical devices, Infection Control and Hospital Epidemology, September 2000, Vol 21, No. 9, p 574

4. Enforcement Priorities for Single-use Devices Reprocessed by Third Parties and Hospitals, Rockville, MD, U.S. Department of Health and Human Services: Food and Drug Administration, Center for Devices and Radiological Health, Division of Enforcement 111, Office of Compliance, August 2000

5. Medical devices,diagnostics and istrumentation, "The gray sheet". FDC Rep 25-1