VHA Member Hospitals Reduce Supply Costs Through Device Reprocessing

IRVING, Texas -- Since April 2002, hospitals that are

members of VHA Inc., the healthcare cooperative, have saved an estimated

$25 million through agreements VHA signed with two medical device reprocessing

companies. More than 450 VHA member organizations are participating in the

contracts with Alliance Medical Corporation of Phoenix, and Vanguard Medical

Concepts Inc. of Lakeland, Fla. The savings compare with the cost of purchasing

new devices.

Single-use medical device reprocessing includes all the steps performed to

make a single-use device patient-ready, including cleaning, function testing,

sterilization and re-packaging. A 2002 Food and Drug Administration (FDA)

survey reported that 45 percent of hospitals with more than 250 beds reprocess

medical devices, with 84 percent of those hospitals using third-party

reprocessing companies. VHA's research has shown that reprocessing saves on

average at least 50 percent over the cost of purchasing a replacement device.

Rather than attempt to do their own reprocessing, many hospitals have

contracted with third-party reprocessing firms, since it is expensive and

difficult for the average hospital to comply with the FDA standards for

reprocessing.

"Participation in VHA's third-party reprocessing agreements has provided

our members with outstanding quality and value over the past two years," said

K. Jeffrey Hayes, VHA's senior vice president for clinical and business

services.

By using Alliance and Vanguard services, VHA members can ensure that

reprocessed devices comply with FDA regulatory requirements. The companies

guarantee that used medical devices will be returned fully functional and

sterile. Both companies have validated the effectiveness of their

reprocessing procedures over the past decade. Devices are thoroughly tested

and examined before being released. Both firms back up their services with

warranties.

Participation in the agreements has helped VHA members maximize limited

resources and has resulted in significant supply-cost reductions while

maintaining a high quality of patient care, according to Hayes. He said the

estimated $25 million savings already achieved should grow significantly as

member organizations fully leverage reprocessing opportunities through the

agreements.

VHA member and Vanguard customer Sentara Healthcare, a 1,584-bed system

with six hospitals in and around Norfolk, Va., has saved $505,000 since July

2002 through reprocessing. Sentara Standardization/Utilization Manager Jean

Potter noted that reprocessing is increasingly gaining acceptance by the

system's physicians and nurses and that the savings will increase as more

clinicians support the idea.

Emerson Hospital in Concord, Mass., a 170-bed hospital, saved $90,000 in

12 months by working with Alliance. Director of materials management Rich

Doolan expects 2003 cost savings to exceed $120,000.

"Reprocessing is a

viable cost-cutting initiative," said Doolan.

Source: VHA Inc.