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Reprocessing Wars
If reusing single-use devices is such a great thing, why are some device makers fuming? Probably because they're losing $250 million a year.
Dan O'Connor
Publish Date: May 7, 2011   |  Tags:   Supply Management

Stacy Howard, RN, MHA, MBA, has major purchasing power. She buys all of the operating room and general medical supplies for the Sisters of Mercy Health System's 28 hospitals in Arkansas, Kansas, Missouri and Oklahoma. Her budget is huge, millions and millions huge, and she's spending more and more of it on reprocessed single-use devices. Last year, she saved Mercy $1.7 million by buying refurbished trocars, pulse oximetry probes, GI forceps and the like, sparing her budget and the landfill — and drawing the ire of some of her surgical supply vendors.

One of those vendors is an ex-vendor after it strong-armed Mercy on pricing in a failed attempt to discourage the health system from buying repro-cessed SUDs. The vendor stipulated in its contract that any reprocessed items that Mercy bought wouldn't count against its compliance levels, which plunged Mercy into a more expensive pricing tier. The vendor made its point, yes, but at a steep price: It lost the business, worth nearly $10 million per year.

"They weren't willing to compromise on the very strict reprocessing rules written into the contract," says Ms. Howard. "As a Catholic, non-profit healthcare system, reprocessing is a key initiative for us."

Key initiative for us That's a bit of understatement. When Mercy began buying reprocessed SUDs in 2009, it saved a modest $197,000. Last year, it saved nearly 9 times as much. Today Ms. Howard insists on reprocessing-friendly terms — reprocessed devices she buys must count toward compliance levels — every time she negotiates a supply contract. And if she encounters a supply vendor that punishes its customers for buying reprocessed devices?

"It's not a dealbreaker, but I view it as a negative," she says. "Do we turn the other way and try to go toward a vendor that does allow reprocessing? Absolutely. Because [reprocessing] is a program that we truly believe in."

Reusing a product for around half the price is quite the proposition, but reprocessing is much more than a money-saver for Mercy Health. It has become a deeply emotional crusade.

"We all know that the cost of health care has risen dramatically," says Ms. Howard. "Supplies make up 40% of what it costs to give care in the hospital. I truly believe in my heart of hearts that we all share a responsibility to be as cost-efficient and as environmentally friendly as we can be."

Single-use device means just what the name implies. Discard the device after one use. Today, however, more than 9 million single-use devices are being reprocessed each year, including laparoscopic instruments, trocars, ultrasonic scalpels, clip appliers, tourniquet cuffs, arthroscopic shavers, arthroscopic RF probes, burrs, bits and blades, external fixation devices and phaco tips. You use many of these products for 10 minutes or less and throw them away. Or you throw away single-use items that you never even use out of fear that devices that you take out of their packaging could have been contaminated. "If you look at the trash bags after a case, it's incredible. We throw out a lot of stuff," says David Renton, MD, MPH, assistant professor of surgery at Ohio State University in Columbus.

Reprocessing has mushroomed into a big business. It's now a $250 million-a-year industry. It's estimated that 70% of hospitals and a growing number of ambulatory surgical centers partner with third-party reprocessors that disassemble, clean, inspect, certify, sterilize and restore devices so that they're equally safe and functional as when originally manufactured when they're returned to your facility. The FDA considers third-party reprocessors to be original manufacturers.

"It's quite a reassurance that the FDA approves reprocessed devices in the same way that it approves new devices," says Lori Dulsky, RN, BSN, the director of nursing at the Southwest Ohio Ambulatory Surgery Center in Middletown, Ohio, who's been reprocessing for nearly 10 years.

Some manufacturers of complex and invasive devices, however, say it's impractical to reprocess their products. "There's a big difference between reprocessing a Harmonic scalpel and a blood pressure cuff," says a product manager we spoke to at the AORN Congress in March in Philadelphia.

Using Condoms to Drive Home the Single-Use Message

The award for the most creative — and brazen — anti-reprocessing campaign has got to go to HemaClear. The maker of single-use surgical tourniquets handed out about 900 condoms from its booth at the AORN Congress in March in Philadelphia. The condom's package read: "Would you re-use this? Don't risk re-using surgical tourniquets either."

Grant Castor, HemaClear's national sales manager, says he was somewhat concerned how AORN attendees would react to the condom giveaway. "But people loved it. We definitely made some good noise," he says. "It was successful because it created awareness that we do this every day and it's disgusting. It was probably the best $300 [for 1,000 condoms] I ever spent in marketing."

Even though it's common practice at many facilities to use reprocessed tourniquet cuffs, nurses at AORN agreed that doing so is, in Mr. Castor's word, "disgusting." Wayne M. Goldstein, MD, president and founder of the Illinois Bone and Joint Institute, likens it to wearing someone else's underwear.

HemaClear wants you to buy into "disposable technology " when it comes to tourniquet cuffs, says Mr. Castor. The HemaClear, priced between $30 and $75, is engineered to be used once and disposed of. The surgeon places the ring on the fingers (or toes) of the patient and then pulls the handles proximally. The silicone ring rolls up the limb while the stockinet sleeve covers it, exerting enough pressure to squeeze all the blood out and then block it at the occlusion site. Mr. Castor says it's nearly impossible to reuse it once it's rolled over a patient's limb.

Mr. Castor estimates that 60% of hospitals and surgery centers buy and use reprocessed tourniquets. In total knee cases, Dr. Goldstein notes, tourniquets are not in clean places on the patient's body. "They're sitting up by the groin, which is loaded with bacteria and highly contaminated," he says. "If patients really knew that [a tourniquet] was removed from a patient and the same tourniquet was used on them with little more than wiping it down, it would be unacceptable to use someone else's tourniquet."

— Dan O'Connor

Ms. Howard has seen reprocessing from both sides — the good (how much she's saving buying surgical supplies for 40% to 50% of the cost of new) and the bad (how much some of the vendors of the supplies she's reusing detest it). "This hits their bottom line. I understand that," she says. "Some vendors are embracing it more than others." Put more bluntly: "Manufacturers are fighting us tooth and nail. Their mission is to destroy reprocessing," says Michael Pavesi, regional business director at SterilMed, a leading reprocessor.

Widespread acceptance of reprocessing has hit some manufacturers of original equipment hard in the pocketbooks. They're fighting back with a variety of anti-reprocessing tactics, a couple of which involve, of all things, condoms and kill switches.

A surgical tourniquet maker handed out condoms with an anti-reprocessing message at this year's AORN Congress (see "Using Condoms to Drive Home the Single-Use Message" on page 24).

And it's widely believed that some Harmonic scalpels contain "kill switches" that prevent third-party reprocessors from remanufacturing them. A reprocessed scalpel with a replacement pad will generate an error code when you put it in the generator, says a source. "These products have some sort of electronic or mechanical blocking that does not seem to have any clinical reason for it to be there, but it does disallow the device from being reprocessed," says Lars Thording, senior director of marketing and public affairs for Ascent, the largest remanufacturer of SUDs in the United States. Now owned by Stryker, Ascent has 1,900 hospital and surgery center customers, says Mr. Thording. For its part, Ethicon Endo-Surgery says it "does not intentionally design our single-use devices to thwart reprocessing efforts," says Bridgett Golden, a spokesperson for EES.

However, Ms. Golden adds that "we compete with [reprocessors] as we would any competitor. An important distinction we make to our customers is that the FDA states that reprocessed products must be 'substantially equivalent.' However, this does not mean that a reprocessed device will have the same functionality and cleanliness standards as an [Ethicon Endo-Surgery] device. Reprocessors do not have EES proprietary mechanical specifications."

You might also hear device manufacturer sales reps denigrate reprocessed devices, claiming they're unsafe or of lesser quality than new, says Mr. Thording. Ethicon Endo-Surgery sponsored 2 separate studies on reprocessed SUDs to assess the existence and extent of foreign material on reprocessed SUDs. Data from the studies show the presence of blood and red and brown protein-based residue on certain reprocessed devices, the company claims. Original single-use EES devices were shown to be free of this type of debris.

Manufacturers can also contractually disable a reprocessing program. A common contractual catch is to offer you a piece of capital equipment for free if you buy a set amount of disposables every month. Buying reprocessed devices will cause you not to reach those par levels and force you to pay a higher price for the disposables, says Mr. Thording. Some vendor reps will spy to see if you have any repro-cessed items on the OR shelves "They then threaten to increase their pricing if they catch you reprocessing their product if the contract language prohibits this," says Mary Ann Gellenbeck, RN, CASC, chief operating officer at Prexus Health Consulting in Hamilton, Ohio. Ms. Gellenbeck says some Prexus centers are saving up to $6,000 per month buying reprocessed devices.

"None of these tactics really keep me up at night because, increasingly, our nurse and materials manager partners are becoming more aggressive in defending their reprocessing programs," says Mr. Thording. "If you hurt their reprocessing programs, you will no longer be allowed in there."

On the Web

Ascent has launched a site that addresses the issue of anti-reprocessing tactics: www.protectoursavings.com