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Getting a Handle on Instrument-Related Costs and Inventory
By Jennifer Schraag and Kris Ellis
Healthcare workers in the sterileprocessing and healthcare materials management arenas are keenly aware of themany pitfalls that may be encountered through inefficient instrument managementand purchasing. Fortunately, options do exist for those seeking to make the mostof 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 resumesales of the product. Vanguard provides a broad range of reprocessing servicesfor more than 1,000 healthcare facilities nationwide. According to Vanguard, theaverage original selling price for these devices is approximately $260, andapproximately $175 million worth of ultrasonic scalpels are sold annually. Thisis but one example of the savings facilities may benefit from if they choose toreprocess their single-use devices (SUDs) and multiple-use devices (MUDs).Reprocessing can result in a savings upward of 50 percent of the cost of buyinga new device.
So what about the safety of such practices? The Association for Medical Device Reprocessors (AMDR), aWashington, D.C.- based trade association representing third-party reprocessorsof medical devices labeled for single-use, estimates 95 percent of reprocessedproducts remain legally marketable.
Rules and regulations have been administered to such practicesby the FDA. Reprocessing of SUDs was addressed in the Medical Device UserFee and Modernization Act of 2002 (MDUFMA) that amended the Federal Food, Drug,and Cosmetic Act. MDUFMA established new statutory requirements applicable toreprocessed SUDs, including labeling identifying the devices as reprocessed,submission of validation data for many reprocessed SUDs, and submission ofpre-market notifications 510(k)s with validation data for some SUDs thatwere previously exempt from 510(k) submission requirements. FDA also requires anadverse event report be filed concerning any reprocessed materials involved inthe event. Industry specialists and associations have voiced theirendorsement of reprocessing practices, highlighting the safety regulations setforth by the FDA.
The Association for Healthcare Resource and MaterialsManagement (AHRMM) supports the regulated reprocessing of selected medicaldevices originally labeled for single use by the original equipmentmanufacturer. AHRMM comments that the significant regulatory burdenimposed by the FDA has made in-hospital reprocessing more complex and costly formost hospitals. AHRMM, therefore, does not encourage or endorse hospitalreprocessing of SUDs for facilities that are unable to meet the stringentguidelines established by the FDA. However, to contain costs, reduce waste,and promote quality patient care, AHRMM encourages hospitals to reprocess byoutsourcing to third-party reprocessors, the AHRMM Web site reads.
Dianne Gantt, RN, FCSP, president-elect and chairwoman of theregulatory committee of the American Society for Healthcare Central ServiceProfessionals (ASHCSP), and director of supply chain contract managementservices with Premiere, Inc., discusses the pros and cons of using a third partyreprocessor.
I dont think most in-house departments can meet theFDA/government-required standards, she says. I havent met a hospitalyet that does. So hiring a third party to do that is definitely the way to go ifyoure 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 ofdevices. Its one thing to reprocess an external sleeve for a SCD machine, vs.reprocessing burrs and blades, versus reprocessing some kind of cannulateddevice that is going to be introduced into a vessel. I just think you need tolook at your facility and your costs and what you hope to save and decide ifthats the thing to do for you based on the culture and philosophy of yourhospital.
ASHCSP also advises facilities to develop a multi-disciplinary team to monitor FDA regulations concerningreuse. ASHCSP recommends the team consist of personnel from the facilitysadministration, central service, infection control, legal counsel, materialsmanagement, nursing, physicians, and risk management departments.
Gantt says, I think each institution has to take a look attheir 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 isfinancially doable for them. I think it would be useful for each facility toinvestigate that to see if it is enough of a cost savings to warrant going thatroute.
Finding the Right Third-Party Reprocessor
To maximize the benefits of third-party reprocessing, AMDRmembers encourage hospitals to ask the following questions before engaging theservices of a third-party reprocessor:
The FDA also developed suggestions for selecting a third-partyreprocessor. They include:
In addition, AHRMM recommends hospitals choose only firmsregistered and in good standing with FDA.
Tracking and managing instrumentation throughout a facility isan initiative that can also prove beneficial in many ways. From a materialsmanagement perspective, the ability to establish a firm grasp on instrumentusage, life cycle, and repairs can lead to previously unavailable efficiency andcost savings.
When you have a tracking system in place, from an inventorycontrol standpoint, you are able to find out from a high level whats sittingon the shelves throughout the entire infrastructure, says Michael Good, chief executive officer of TGX MedicalSystems. 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 Ineeded to execute in an efficient manner. Putting a tracking system in place gives the hospital theability to know exactly what they need from a quantity standpoint and from anassurance 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 eachindividual instrument, we were able to get a better hold on our inventory; wereable to see how much stuff is going in and out within a given year that isnon-repairable.
This kind of information can help drill down oninstrumentation specifics and reasons for replacements. If itsnon-repairable because youve already sharpened it so many times and thecompany cant sharpen it any more, or its fractured, that helps us injustifying why we had to buy instruments, so youve got ways to show detailsabout 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 waiteduntil a doctor from upstairs said hey, this needs to be sharpened, becausethere was really no way for us to check them.
Accounting for each and every misplaced item was a majorconcern for Sharps facility when evaluating different tracking systems. We would have problems where pill packs would get lost andinstruments would come up missing from a tray and we got to thinking of all ofthe different scenarios that we had been dealing with, she says. The mainthing was that if something critical is missing from a tray, we can track to theroom and we can call that room and say this tray was used in your room onsuch and such case and this instrument is missing, so we could get the ballgoing right then instead of two hours later when no one from the surgery isaround.
Identification of trends and potential breaks in procedurecould be done easily with the system, Sharp explains. We were able to look atthat. A couple of the big things were towel clips and scissors, and we wereable, in a couple of instances, to track it to a room and they had some newpeople 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 majorbenefit. 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 25at 2 p.m. and then it was scanned to the main OR and then it was scanned intoroom 11 where it goes. So then we can say lets go to room 11 and look for itthere. Same thing with case cart and every hospital is different; you haveto make it work for you we take our case carts that weve pulled for ourcase the following day and we take the number off the case cart theyreall numbered with a bar code we take that bar code number and put it on themaster schedule for the next day so that way were able to track that casecart and the instrument trays that are on it all the way through the system; itgets assembled in sterile processing, delivered to the OR, used in room eight,returned to decontam, the instruments are scanned into the washer, and then theyrescanned when theyre assembled and then into the sterilizer, and then it justcontinues through that same cycle.
Flexibility has proved to be a key component of Sharpssystem. Especially here, because were on the first floor and the ORs onthe fourth floor, she continues. We have a womens center that is inanother 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 scannerand carry it with them, and then theyre able to scan it wherever it goes.
The ability to customize locations at which items can bescanned to is a feature that is also useful for Sharps team. Its just amatter of making it a location, printing a bar code, and putting it wherever youwant to, she says. You have tethered scanners that are on yourworkstations and then you have hand-held scanners, and those are the ones youjust walk around with and you can scan things wherever necessary.
Good contends that the multi-faceted benefits of instrumenttracking include the potential for a more informed decision-making process withregard to instrumentation. We tell our clients that they should and will see a returnon investment within 12 to 18 months of implementing the product, he says.That return on investment comes in a lot of different areas, whether itsmore productivity with less people, or not having to purchase instrumentsbecause now youre able to find them within the infrastructure. Were really empowering the departments to make betterbusiness decisions, which in turn pays for the application.