Getting a Handle on Instrument-Related Costs and Inventory
By Jennifer Schraag and Kris Ellis
Healthcare workers in the sterile processing and healthcare materials management arenas are keenly aware of the many pitfalls that may be encountered through inefficient instrument management and purchasing. Fortunately, options do exist for those seeking to make the most of their instrumentation budgets.
In April, the U.S. Food and Drug Administration (FDA) determined the ultrasonic scalpels reprocessed by Vanguard Medical Concepts Inc. are substantially equivalent to new and cleared the company to resume sales of the product. Vanguard provides a broad range of reprocessing services for more than 1,000 healthcare facilities nationwide. According to Vanguard, the average original selling price for these devices is approximately $260, and approximately $175 million worth of ultrasonic scalpels are sold annually. This is but one example of the savings facilities may benefit from if they choose to reprocess their single-use devices (SUDs) and multiple-use devices (MUDs). Reprocessing can result in a savings upward of 50 percent of the cost of buying a new device.
So what about the safety of such practices? The Association for Medical Device Reprocessors (AMDR), a Washington, D.C.- based trade association representing third-party reprocessors of medical devices labeled for single-use, estimates 95 percent of reprocessed products remain legally marketable.
Rules and regulations have been administered to such practices by the FDA. Reprocessing of SUDs was addressed in the Medical Device User Fee and Modernization Act of 2002 (MDUFMA) that amended the Federal Food, Drug, and Cosmetic Act. MDUFMA established new statutory requirements applicable to reprocessed SUDs, including labeling identifying the devices as reprocessed, submission of validation data for many reprocessed SUDs, and submission of pre-market notifications 510(k)s with validation data for some SUDs that were previously exempt from 510(k) submission requirements. FDA also requires an adverse event report be filed concerning any reprocessed materials involved in the event. Industry specialists and associations have voiced their endorsement of reprocessing practices, highlighting the safety regulations set forth by the FDA.
The Association for Healthcare Resource and Materials Management (AHRMM) supports the regulated reprocessing of selected medical devices originally labeled for single use by the original equipment manufacturer. AHRMM comments that the significant regulatory burden imposed by the FDA has made in-hospital reprocessing more complex and costly for most hospitals. AHRMM, therefore, does not encourage or endorse hospital reprocessing of SUDs for facilities that are unable to meet the stringent guidelines established by the FDA. However, to contain costs, reduce waste, and promote quality patient care, AHRMM encourages hospitals to reprocess by outsourcing to third-party reprocessors, the AHRMM Web site reads.
Dianne Gantt, RN, FCSP, president-elect and chairwoman of the regulatory committee of the American Society for Healthcare Central Service Professionals (ASHCSP), and director of supply chain contract management services with Premiere, Inc., discusses the pros and cons of using a third party reprocessor.
I dont think most in-house departments can meet the FDA/government-required standards, she says. I havent met a hospital yet that does. So hiring a third party to do that is definitely the way to go if youre going to do it. But is it the thing to do for an 800- bed hospital vs. a 156-bed hospital? I dont know. There are different classifications of devices. Its one thing to reprocess an external sleeve for a SCD machine, vs. reprocessing burrs and blades, versus reprocessing some kind of cannulated device that is going to be introduced into a vessel. I just think you need to look at your facility and your costs and what you hope to save and decide if thats the thing to do for you based on the culture and philosophy of your hospital.
ASHCSP also advises facilities to develop a multi-disciplinary team to monitor FDA regulations concerning reuse. ASHCSP recommends the team consist of personnel from the facilitys administration, central service, infection control, legal counsel, materials management, nursing, physicians, and risk management departments.
Gantt says, I think each institution has to take a look at their costs and their risk factors. They have to include the legal department, risk management, and look at their processes to see if they think reprocessing SUDs is financially doable for them. I think it would be useful for each facility to investigate that to see if it is enough of a cost savings to warrant going that route.
Finding the Right Third-Party Reprocessor
To maximize the benefits of third-party reprocessing, AMDR members encourage hospitals to ask the following questions before engaging the services of a third-party reprocessor:
- Is the company registered with the FDA?
- Does the company comply with applicable quality system regulation requirements?
- Will the company permit you to visit its plant and review its quality manual?
- Is sterilization performed by a commissioned and certified sterilization system, in accordance with ANSI/AAMI/ISO ST 11135 ST 1994?
- Is the sterilization cycle requalified annually? Are biological indicators used to monitor routine sterilization?
- Are the sterilization systems routinely calibrated?
- Is the residual sterilant level routinely tested?
- Does the company have reprocessing procedures tailored to the specific types of medical devices you wish to have reprocessed, and has the company validated these procedures?
- Is the product functionality routinely tested?
- Does the company track the number of uses per device?
- Does the company comply with medical device reporting requirements?
- Does the company have adequate liability insurance coverage?
The FDA also developed suggestions for selecting a third-party reprocessor. They include:
- Talking with other hospitals to determine their experiences with third-party reprocessors.
- Taking a tour of the reprocessors facility to inspect and review standard operating procedures.
- Requesting a copy of the facilitys establishment inspection report that lists the findings of the FDA when last inspected; and reviewing the findings of that inspection to see how the firm has complied with the quality system regulation.
- For each device a hospital wishes to reprocess, ensuring that the reprocessor has received approval from the FDA for any necessary pre-market requirements as well as with preproduction validation data on each nonexempt device for cleaning, function testing, and sterilization (as required by law in the MDUFMA).
- Asking about the reprocessors validated systems and study protocols for processes such as cleaning, packaging, and sterilization; and verifying the integrity of the third party lab used to oversee lab results.
- Asking if the reprocessor has set limits for the number of times a device may be reprocessed and what mechanisms the reprocessor has put in place to track devices and ensure that a facility only receives its own devices.
In addition, AHRMM recommends hospitals choose only firms registered and in good standing with FDA.
Tracking and managing instrumentation throughout a facility is an initiative that can also prove beneficial in many ways. From a materials management perspective, the ability to establish a firm grasp on instrument usage, life cycle, and repairs can lead to previously unavailable efficiency and cost savings.
When you have a tracking system in place, from an inventory control standpoint, you are able to find out from a high level whats sitting on the shelves throughout the entire infrastructure, says Michael Good, chief executive officer of TGX Medical Systems. If I need six rib splitters in my internal operations, for example, and I have eight of them, and they cost $35,000 each, Ive over-bought what I needed to execute in an efficient manner. Putting a tracking system in place gives the hospital the ability to know exactly what they need from a quantity standpoint and from an assurance standpoint.
We did not have a true inventory of our instrumentation, says Tamela Sharp, sterile processing manager at Birmingham, Ala.- based St. Vincents Hospital. With Censis and with them actually marking each individual instrument, we were able to get a better hold on our inventory; were able to see how much stuff is going in and out within a given year that is non-repairable.
This kind of information can help drill down on instrumentation specifics and reasons for replacements. If its non-repairable because youve already sharpened it so many times and the company cant sharpen it any more, or its fractured, that helps us in justifying why we had to buy instruments, so youve got ways to show details about replacement instead of just saying I needed it, Sharp explains. Then we were able to tell our executive team that every 25th use, our scissors are looked at, whereas before we waited until a doctor from upstairs said hey, this needs to be sharpened, because there was really no way for us to check them.
Accounting for each and every misplaced item was a major concern for Sharps facility when evaluating different tracking systems. We would have problems where pill packs would get lost and instruments would come up missing from a tray and we got to thinking of all of the different scenarios that we had been dealing with, she says. The main thing was that if something critical is missing from a tray, we can track to the room and we can call that room and say this tray was used in your room on such and such case and this instrument is missing, so we could get the ball going right then instead of two hours later when no one from the surgery is around.
Identification of trends and potential breaks in procedure could be done easily with the system, Sharp explains. We were able to look at that. A couple of the big things were towel clips and scissors, and we were able, in a couple of instances, to track it to a room and they had some new people cleaning up, and thats where some of our towel clips were going they werent taking them off of the linen, she says.
Sharp notes that case cart tracking has also been a major benefit. You can focus on the case cart and the instrument in the same way, she says. For instance, if we have an instrument Dr. Jones forceps and were able to look in the system and see that it was sterilized on June 25 at 2 p.m. and then it was scanned to the main OR and then it was scanned into room 11 where it goes. So then we can say lets go to room 11 and look for it there. Same thing with case cart and every hospital is different; you have to make it work for you we take our case carts that weve pulled for our case the following day and we take the number off the case cart theyre all numbered with a bar code we take that bar code number and put it on the master schedule for the next day so that way were able to track that case cart and the instrument trays that are on it all the way through the system; it gets assembled in sterile processing, delivered to the OR, used in room eight, returned to decontam, the instruments are scanned into the washer, and then theyre scanned when theyre assembled and then into the sterilizer, and then it just continues through that same cycle.
Flexibility has proved to be a key component of Sharps system. Especially here, because were on the first floor and the ORs on the fourth floor, she continues. We have a womens center that is in another adjacent building, so we have to go to all these different locations. When they get ready to deliver something they just take that hand-held scanner and carry it with them, and then theyre able to scan it wherever it goes.
The ability to customize locations at which items can be scanned to is a feature that is also useful for Sharps team. Its just a matter of making it a location, printing a bar code, and putting it wherever you want to, she says. You have tethered scanners that are on your workstations and then you have hand-held scanners, and those are the ones you just walk around with and you can scan things wherever necessary.
Good contends that the multi-faceted benefits of instrument tracking include the potential for a more informed decision-making process with regard to instrumentation. We tell our clients that they should and will see a return on investment within 12 to 18 months of implementing the product, he says. That return on investment comes in a lot of different areas, whether its more productivity with less people, or not having to purchase instruments because now youre able to find them within the infrastructure. Were really empowering the departments to make better business decisions, which in turn pays for the application.