2013 Endoscope Care Guide
Useful criteria for choosing an ISO, third-party repair
Hospitals would be wise to categorize their surgical
instruments into two categories – General (for surgical hand
instruments) and ‘Mission Critical’ (for endoscopes, power and video
equipment, owing to their classification as Complex Surgical
Instruments) when selecting a repair vendor.
Based on these categories, the hospital should search
for the most qualified vendor for each type of repair.
For general surgical hand instruments, because of the
large numbers of these and the fact that most hospitals’ inventories
consist of multiple OEMs’ products, it is not feasible to ship these
back to their respective OEM for general maintenance and repair
needs. Most hospitals choose a vendor that services these instruments
out of a mobile van. We recommend choosing a qualified vendor who is
authorized by at least one well-known manufacturer of the devices
(Integra, Teleflex or Aesculap, for example). These companies provide
repair and refurbishment for a wide variety of general surgical
For endoscopes, power and video equipment, Karl Storz’s stance is that these devices should be returned to the OEM
for repair or exchange to ensure that the original product’s quality
is maintained. These are generally the most expensive devices used in
surgical procedures and their performance, or lack thereof, will have
either a positive or negative effect on patient safety, OR delays,
the stress level of the staff and surgeon.
When hospitals do not categorize their devices as
described above, problems arise. Hospitals often try to choose a
single vendor to perform all repairs in an effort to control costs
and simplify paperwork. Unfortunately, this often does not work out
well because the vendor typically lacks the expertise needed to
perform the range of repairs and, therefore, has to rely on
subcontractors. Or they may attempt to perform the repairs without
the benefits of OEM parts or training. This can result in poor
performance of the product and significant expense to correct the
issues. Customers inadvertently sacrifice quality in their search for
lower prices and ultimately end up spending more money to correct the
The typical scenario is that Hospital A is approached
by a third-party repair company who offers to handle the entire
hospital’s repair needs for surgical instrumentation. Included in
their offer is a significantly lower price to repair a
mission-critical item, such as a rigid endoscope. Because the third
party does not have the OEM parts in most cases, the generic lenses
and fiber optics they use do not perform as well as the OEM’s did. As
time passes and scopes are repaired multiple times, the surgical
staff notices the changes and complains. The solution is to return to
the OEM to correct the problem.
Unfortunately, this occurs quite frequently. One
hospital made available to us their repair and cost records for the
14-month period following their decision to switch to a third party
for repair of their rigid endoscopes. We compared this to our
four-year history for exchanging the same number of scopes. We found
that, although the third party charged almost $400 less for their
repairs compared with the cost of our exchange scopes, the frequency
of repair doubled, increasing from 5.9 scopes per month when we (the
OEM) simply exchanged the scopes to 10.9 repaired scopes per month.
The frequency doubled due to surgeon complaints about quality. As a
result of the dramatically increased frequency, the hospital actually
spent more per month on average with the "cheaper" third-party
repairs than they did when the OEM was exchanging the scopes. What
this example fails to account for is the staff and surgeon
frustrations, O.R. delays and potential harm to patients that these
poorly functioning scopes caused.
The old saying "penny wise and pound foolish" applies.
– Gregg Agoston, Associate Director,
Karl Storz Endoscopy-America Inc.
Cost-conscious hospitals must avoid third-party repair traps
breaks top the list, but can leave quality at the bottom
axiom, “you get what you pay for” certainly can ring true when you’re
considering repair services for endoscopic devices and equipment.
work with the higher-priced original equipment manufacturer (OEM),
justifying the decision based on quality and warranty assurance, or work
instead with a typically lower-cost authorized independent service
organization (ISO), versus the “bargain-basement” third-party repair service
for quick turnaround?
surface, the decision may seem obvious. Budgetary and time crunches,
however, can blur the lines.
biggest criteria is can the repair company repair to the original specs of
the manufacturer, using the same parts and same techniques to repair the
scope?” asked Sydney Nye, R.N., Senior Product Manager - Customer Education
and Reprocessing, Richard Wolf Medical Instruments Corp. “If not, the scope
will be altered and cannot be considered validated for the cleaning or
sterilization techniques by the OEM.”
Ryan Klebba, Vice-President, Endoscopy Sales
Division, Integrated Medical Systems International Inc., advised
about the not-so-obvious repair traps and trappings.
trap is treating medical device repair like a commodity and selecting a
vendor based solely on price,” Klebba said. “This is a trap because the
‘lowest price’ does not necessarily lead to the lowest overall cost over
time – and it can end up being more expensive.
Photo courtesy of Integrated
Medical Systems International, Inc. (IMS).
The objective assembly lens in a small-diameter
flexible endoscope is a tiny piece of glass with a great impact on visual
quality. Replacement lenses must be engineered to exacting specifications.
Photo courtesy of Integrated
Medical Systems International, Inc. (IMS).
Replacement parts for small-diameter flexible
scopes, such as this distal tip, must be manufactured to extremely precise
understand how choosing the ‘lowest-price’ vendor can cost you more, let’s
use the analogy of an iceberg,” he continued. “We learn in school that 85
percent of an iceberg is hidden under water and only 15 percent is visible.
The same is true for most medical devices. About 85 percent of the
components are located where the eye can’t see. With a flexible endoscope,
for example, most of the critical working components are located inside the
insertion tube, universal cord, etc., where you can’t see them. This makes
it very difficult to evaluate repair quality.
little else to go on, facilities will often choose the company that provides
the ‘cheapest’ pricing in response to an RFP. If a company has a very cheap
price, however, they probably also have cheap costs. They may be using less
expensive incompatible parts that cannot withstand reprocessing modalities,
or they may employ workarounds by which certain parts that should be
replaced are actually bypassed in the device. In addition, testing the
sterile efficacy and durability of repaired medical devices is very
expensive. Can the “cheapest” vendor afford to pay the hundreds of thousands
of dollars needed to test all the devices they service to ensure patient
safety and device longevity?
Do the math
break the cost savings down. If you save 40 percent by using the cheapest
company, but the recently-serviced device breaks twice as often due to poor
repair work or inferior parts, you have just spent 20 percent more on
repairing that device. Rather than simply comparing the price of a single
repair, look at the total cost of repair, per device serial number, over a
period of time. Make sure you look at all aspects of a vendor, including
getting references from other facilities that are similar to yours in size
“If at all
possible, visit the repair facility and ask tough questions about their
processes and the components they use. You wouldn’t buy a house
without seeing it first, opening closets and looking in the basement, and
you wouldn’t take the seller’s word that everything is as it should be. Can
the vendor you are considering handle the repair volume your facility
requires? Will their repair quality match that of your current provider and
keep your doctors happy and your patients safe?
‘cheap,’ and then there is ‘cost savings,’ and an ultra-cheap repair
provider can cost you more,” Klebba concluded.
Beverly Young, Marketing Manager,
Mobile Instrument Service & Repair
Inc., raised red flags about parts quality and non-disclosed pricing.
“Ask about parts quality, quality checkpoints, liability insurance,
if they have had any claims due to litigation, loaner fill rates and what
the charge is for loaners. Also check references as to what educational
offerings are available to staff,” she noted.
“Beware of non-disclosed pricing,” Young added. “There will be vendors that
will offer a tiered or flat rate. Require a vendor to explain what is
covered and not covered. Make sure to monitor spending on all contracts.
Beware of vendors that sell equipment as to ensure you aren't replacing
capital acquisition and operational maintenance:
A hidden pitfall under accountable care?
by Rick Wells and Craig Linge
In any healthcare facility, the capital
acquisition and operational maintenance budgets are among the most
carefully scrutinized and closely monitored lines in departmental
Capital is typically allocated annually
among competing departments in a centrally managed process at the CFO
or CEO level. Maintenance and repair of capital equipment is an
operational expense, managed on a weekly or monthly basis at the
departmental level. While capital acquisition decisions for the
Operating Room are driven by clinical management, recent requirements
by The Joint Commission reassigned responsibility for the management
of all endoscopes to the Clinical Engineering/Biomed department.
Outwardly appealing, this division of
responsibility compounds the difficult task of determining what is the
total cost of ownership? The total cost of ownership is defined as
including all costs associated with the acquisition, use, processing,
maintenance and replacement for a specific device. Viewed from the O.R.
director’s perspective, maintenance expense is someone else’s
responsibility, over which she or he has little or no effective
control. Clinical Engineering, typically physically and operationally
distant from the O.R., naturally focuses on the nominal cost of repair
and quality. Due to the complex nature of endoscopes, without
expert-level knowledge about the OEM specifications by a dedicated
staff member with the time to perform thorough evaluations, it is
virtually impossible for an untrained person in either Biomed or
Sterile Processing and Distribution (SPD) to evaluate the quality of
third-party repair on complex surgical devices.
A recent case in point: In 2011, the
Perioperative Director at a large medical center carefully evaluated
rigid endoscope providers, weighing multiple factors bearing on
acquisition cost, clinical efficacy, alignment with strategic service
offerings and surgical team preferences. The capital allocation was
large — $500,000 for more than 130 endoscopes to serve as the optical
backbone of the O.R. for a decade. There’s no going back for a second
helping in the capital process as it can be a bet-your-career
decision. When the new scopes arrived in the O.R., surgical
satisfaction and performance increased by an order of magnitude.
The Clinical Engineering Manager had a
different perspective. His mandate, consistent with the hospital’s
operational budget goals, was to drive down the clinical repair budget
by 20 percent, preferably more. A seductive step towards that
difficult objective was to bid out service on the new telescopes to a
third-party operation, looking only at the nominal cost of an
individual repair. Initially, this approach was seemingly successful.
Any specific repair, considered alone, looked economical. With time,
however, severe issues surfaced: The frequency of repairs increased,
scopes increasingly broke down during sterilization, optical quality
gradually but inexorably degraded. The cumulative effect of repairing
a scope, each successive third party repair reducing performance by up
to 10 percent of the original specification, sharply reduced both the
performance and the working life of the carefully chosen capital
The Perioperative Director, facing criticism
from surgeons over poor image quality, was compelled to reallocate
$500,000 in her 2014 capital budget to replace telescopes she had
every reason to expect would serve for many more years. Meanwhile, the
Clinical Engineering group won plaudits for beating their expense
This is where the pitfall emerges, or does
it? When the capital decision is separated from the service component,
who is responsible for ensuring that choices are consistent with
delivering the lowest total cost of ownership? In our view, separating
the budgeting and ownership responsibility creates a large hidden trap
that ultimately requires repeated capital outlays for the same asset.
That $500,000 could have been spent on new booms and lights for the
operating room, or for a new C-arm.
A better solution is to carefully consider
the total cost of ownership at the time the capital decision is made,
holding the equipment supplier strictly responsible for their
products’ performance and cost over their expected lifetime. Clinical
Engineering is, in fact, well-placed to measure and assess how the
actual cost of ownership compares to commitments. This promotes a
better application of the hospital’s resources which does not create a
pitfall for managers, clinicians and patients.
Rick Wells is Area Sales Manager Central,
and Craig Lingel is Area Sales Manager West, Protection 1,
Karl Storz Endoscopy-America Inc.