Abstract
Background: The trend toward temporizing external fixation of
complex fractures has resulted in increased expenditures for these devices.
Increasing pressure to reduce health-care expenditures has led to exploration
of reuse of equipment intended for single use. Devices must be tested and
recertified prior to redeployment in hospital stock. We report the rate of
manufacturer recertification and institutional cost savings associated with a
reuse program approved by the United States Food and Drug Administration.
Methods: All Hoffmann-II external fixation components that had been
removed at our institution during the study period were submitted to the
manufacturer for visual inspection and mechanical testing. Pass rates for
original components and previously recycled components were determined. With
use of a conservative pass rate and the assumption of a maximum of three
recertifications of each component, the total potential hospital savings on
external fixation were calculated.
Results: The first pass rate was 76%. The second pass rate (i.e.,
the rate for components that had already been recertified once and had been
sent for a second recertification) was 83%, but that rate was derived from a
limited sample. On the basis of a conservative pass-rate estimate of 75%, the
predicted average number of uses of a recyclable component was 2.7. The
recertified components were sold back to our hospital at 50% of the original
price. Because carbon-fiber bars and half-pins are not recycled, 85% of the
charges expended on a new external fixation component are spent on portions of
the system that are recyclable. The potential total savings on reusable
components was found to be 32%, with a total savings of 27% for the whole
external fixation system. No recertified components failed in clinical use
over the course of the study.
Conclusions: With the expansion of cost-control efforts, the
recycling of medical devices appears inevitable. Previous data have
demonstrated the safety of reuse of external fixation devices, and this study
confirms that finding. Our paper demonstrates the real cost savings associated
with a manufacturer-based testing and recertification program. Issues of
voluntary participation in reuse programs, component ownership, and the impact
of savings on patient charges are yet to be worked out by individual
institutions.
Level of Evidence: Economic and decision analysis, Level
II. See Instructions to Authors for a complete description of levels of
evidence.
The recertification and reuse of medical devices that were previously
considered to be single-use devices has become commonplace in many disciplines
of medicine. Treatment of complex fractures with a staged protocol of spanning
external fixation and delayed internal fixation has led to an increased
transient use of external
fixators1-3.
One drawback of this technique is the substantial cost of an external fixator
that is generally removed in two to four weeks. Independent companies will
recertify external fixation components for reuse, but they do not have access
to the original inspection and testing parameters used by the
manufacturer4. As a
result, most manufacturers have stated that products released by third-party
companies should not be mixed with original products either in the product
tray or on the patient and that the manufacturer may not warranty the product
if this is done. For this reason, many institutions have been reluctant to
allow recertification and reuse of these components. Institutions that pursue
their own recertification programs or use the services of third-party
recertifying companies may be exposing themselves to an increased liability
risk. In response to this, some manufacturers of orthopaedic trauma implants
have begun their own programs to inspect, test, and rerelease certain
components of their external fixation systems, which are then certified
"as new."
To date, no companies have considered recertification of carbon-fiber
components. Beck and Seligson noted that visual inspection of carbon-fiber
components after use with metal clamps demonstrated permanent alterations in
the carbonfiber
surface5. An
extensive search yielded no mechanical testing data on this topic. However,
given the observations of obvious visual defects, manufacturers have not
included carbon-fiber components in their reprocessing programs.
In this study, we examined the pass rates, and the economic impact on a
single level-I trauma center, of a recertification program in which the
original manufacturing company retested external fixation components. We
attempted to develop formulae with which to calculate potential savings for a
given institution using the recertification of external fixation components.
Our hypothesis was that significant savings could be realized in the total
annual hospital cost of external fixation with the use of a manufacturer-based
recertification program.
In October 2004, our level-I trauma center reached a contractual agreement
with Stryker Orthopaedics (Mahwah, New Jersey) for the evaluation and
recertification of clamps, posts, and rods from the Hoffmann-II external
fixation system. Internally implanted components (half-pins) or those made of
carbon fiber were excluded. The manufacturer performed visual inspection and
mechanical testing to original product specifications followed by release and
sale of the recertified components back to our institution at a 50% discount
from the original purchase price. Stryker Orthopaedics applied for, and was
granted, United States Food and Drug Administration (FDA) 510(k) approval of
this recertification process.
Each component was etched to mark the number of times that it had been
recertified along with the original product identification number. As part of
the negotiation of the contract with the recertifying manufacturer, it was
agreed that a maximum of three recertification cycles of any component was
permitted. After each recertification, components were sold back to the
hospital at 50% of the original price that the hospital paid when the
component was new. To be recertified, the components had to meet original
manufacturer standards as dictated by an FDA-approved process. These
recertified components were considered to be an "original product"
from the company and were under warranty. They were mixed into the external
fixation trays without special treatment.
The component "pass rate" was defined as the percentage of
components submitted that passed visual inspection and mechanical testing and
were returned to use as recertified components. First and second pass-rate
data were used to estimate an average pass rate for all products. A
conservative estimated pass rate was then used to calculate potential savings
after one year of use of this program as well as long-term savings on external
fixation expenditures.
Annual savings were calculated for the inaugural year of the program by
dividing the calendar year into trimesters. All external fixation components
used in the first four months of the year were new, unused components
purchased at full price. After four months, the used components were sent for
inspection, mechanical testing, and recertification (if appropriate) by the
manufacturing company. A conservative estimated pass rate of 75%, based on our
initial data, was used. For the second trimester, the components that had been
used in the first four months and then recertified were repurchased at 50% of
the original cost. These components, minus the ones that the patients chose to
keep, were again sent back for recertification at the end of the trimester.
Once again, these components were subject to testing, by the manufacturing
company, to the original product specifications. The pass-rate estimate that
we used for the second recertification was also 75%, as preliminary data had
showed no decrease in the recertification rate (see Appendix).
Further analysis was performed to calculate the potential long-term savings
that would be realized by implementing this program. The conservative pass
rate of 75% was used to determine the long-term average cost per item of
external fixator parts with the recertification system in place (see
Appendix).
The etched markings permitted the tracking of the number of times any given
component had been recertified. Given that the maximum number of reuses was
three, it was possible to determine the average number of times that any given
new component would pass recertification.
At the end of the study period (2004 to 2005), a total of 474 external
fixation rods, clamps, and posts had been sent for recertification. Three
hundred and sixty components, or 76%, passed the first inspection and testing.
Thirty-five components that had already been recertified once were sent for a
second recertification, and twenty-nine, or 83%, of them passed this second
recertification. The majority of the failed components did not meet mechanical
standards. The second most common reason for failure on retesting was
observable defects.
The first-year savings provided by this program was 25% of the cost of the
reusable components, or a 21.3% savings on the total external fixation system,
given that not all components were candidates for reuse. We arrived at this
value by calculating the percentage of the total external fixation expenditure
that was spent on reusable components (85%). Then, accounting for the
percentage that did not pass inspection and testing and a 50% resale cost back
to the hospital, we determined the first-year savings to be 21.3% of our total
external fixation costs.
The average cost per item with a limit of three recertifications was found
to be 68% that of a new component, or a 32% savings, in contrast to the 25%
savings achieved during the initial year of the program. As mentioned, the
cost of the reusable parts of a new external fixation system accounts for
about 85% of the total expenditure for the system since implantable and
carbon-fiber components are not candidates for reuse. If a 32% savings on 85%
of the total cost were realized, the total savings on the entire external
fixation system would be 27% over time. At our institution, this amounted to
an approximate savings of $49,140 at the 2003 usage rate and $45,090 at the
2004 usage rate. It was calculated that, if no limits were placed on the
number of recertifications, a theoretical maximum 37.5% savings on reusable
components, or just under a 32% savings on the overall expenditure for
external fixation, would be possible (see Appendix).
The average number of uses of the components was found to be 2.7 (the
initial use of the new component plus the average number of reuses after the
component passed the recertification process).
During this study period, there were no cases of mechanical failure of
external fixation components after implementation of the reuse/recertification
program.
We believe that we are the first to examine an FDA-approved program for
recertification of external fixation components by the original manufacturer,
which tested the used components against original product standards. We found
that approximately three-quarters of the components were recertified, yielding
a savings of 27% for this external fixation system over time.
We are aware of two previous studies on the reuse of external fixators with
programs that refurbished and recertified components to enable
reuse6,7.
Dirschl and Smith evaluated several different types of external fixators that
had been cleaned and inspected by a trained nurse who determined if the parts
were fit for reuse6.
The pass rate in that study was nearly 100%, and there was a 34% decrease in
the overall hospital cost for external fixators with no increase in the
complication rate. The other study, presented by Tornetta et al. at the 2005
Orthopaedic Trauma Association meeting, demonstrated no difference in
complication rates between prospectively followed groups of patients who had
been randomized to receive either a new or a reused nonimplantable external
fixation system and demonstrated a maximal possible savings of 25% on the cost
of all new frames7.
However, over half of the eligible patients chose not to participate in the
randomized trial.
Both studies showed that reuse of external fixation components was safe and
efficacious even with limited evaluation and no mechanical testing of the
components6,7.
We found that 17% to 24% of components do not pass inspection and mechanical
testing to original manufacturing product specifications, indicating that some
reused parts are not mechanically equivalent to new parts in spite of
appearing intact on visual inspection. The reasons for this higher failure
rate are unknown at this time, and further investigation may shed light on the
specific materials or design aspects that lead to product decline after
use.
Involvement of the original manufacturing company in reuse programs may
have substantial benefits. First, the alternatives available to institutions
interested in reusing components are either home-institution-based programs or
third-party independent companies that offer recertification
services4. One
problem with using a hospital-based or third-party program is that the
recertified components are no longer under the original manufacturing
warranty4,8.
Simulated reuse of external fixation devices in the laboratory has
demonstrated equipment failure with cyclic
loading9, but to our
knowledge there have been no reported cases of frame failure in the few
clinical papers reviewing reuse of external
fixators6,7.
However, as these devices are labeled "for single-use only" by the
manufacturer, hospital-based recertification may expose the hospital or
surgeon to additional liability risk if a component fails or even if there are
routine complications associated with use of the
fixator5,8.
The legal issues involved in implant recertification have been identified as
strict liability, negligence, breach of warranty, and intellectual property
claims4,8.
An independent company offering recertification has no access to the
original manufacturing specifications for mechanical integrity of the
recertified
components4. FDA
510(k) approval for recertification of external fixation devices demands
submission of data indicating that the reprocessed device is equivalent to the
original device4,
and manufacturers may be reluctant to release the original testing standards
for their devices. Since components recertified by third-party reprocessing
programs are no longer under manufacturer warranty, they cannot be mixed with
new components. Requiring separation of new and used stock would entail an
added level of inventory complexity in the sterile processing of components.
Manufacturers clearly have access to their original product standards and may
extend product warranties after recertification, thereby avoiding liability
issues and inventory complexity.
A second advantage to manufacturer involvement is that manufacturers have a
special interest in participating in the recertification process because of
their inherent interest in the safe use of their products. Financial
considerations may make these programs attractive to manufacturing companies,
given the increased hospital pressure to contain health-care costs.
A third advantage to a manufacturer-based reuse program is its FDA-approved
status. The benefit of FDA involvement in reuse programs is the added patient
protection, and the drawback is a lengthy administrative process to gain FDA
approval. Having the original manufacturing company obtain FDA 510(k) approval
for its evaluation and retest equipment eliminates the individual
institutional responsibility to fulfill FDA regulatory requirements and submit
applications for approval.
In our case, negotiations between the hospital and manufacturer to work out
the financial arrangement were reasonably simple, and we hope that our
calculations can assist other institutions in estimating the potential
savings. These calculations are available in the Appendix.
The overall issue of medical device reuse is timely and has major
implications for patient safety. While many hospitals reuse medical equipment
such as endoscopes and cardiac catheters in an attempt to control the rising
costs of health care and to reduce waste, few of these programs are fully
FDA-approved4,10-14.
The FDA Center for Devices and Radiological Health has become keenly aware of
this trend and is seeking to identify which devices labeled as single-use
devices present risks to patients when reprocessed and reused. Historically,
the FDA has not exposed reprocessors of single-use devices (hospitals and
third-party companies) to the full scrutiny and regulation of the law, thereby
enabling the reuse of devices without demonstration of their safety. The FDA
stance, however, has recently changed. The agency has proposed a regulatory
strategy that will subject reprocessors of single-use devices to the same
requirements as imposed on manufacturing companies, with enforcement priority
based on the inherent risks posed by the reuse of various
devices12. The
obvious ramification of this change in policy is the added liability burden
for hospitals that choose to reuse single-use devices without demonstrated
safety and approval. The FDA is actively seeking data from pilot studies to
demonstrate the safety and efficacy of the reuse of single-use
devices15.
In spite of the previously mentioned studies showing overall safety and
efficacy of hospital-based programs for reuse of external fixation
components6,7,
our data indicate that not all reused components are equivalent and that the
majority of components that fail testing do not meet the mechanical standards
of the original product specifications, even after passing visual inspection.
This finding may indicate the importance of mechanical testing of components
to ensure the highest level of patient safety, although the manufacturer's
original product specifications are not publicly
available6,7.
While it may be believed that the manufacturer would have an incentive to
reject a higher percentage of components presented for reuse, the opportunity
to sell them back to institutions at 50% of the original price without
incurring any manufacturing costs gives them financial incentives to recertify
components as well.
The financial incentives of this program are well demonstrated by our
calculations. The percentage of the cost of external fixator components that
will be saved over the long term can be used to determine a reduced price for
all external fixators. A similar model was used by Dirschl and Smith, with
demonstrated savings for patients and the
institution6.
Our calculated total annual savings of just under $50,000 per year may seem
rather modest given the overall budget of an intermediate-to-high-volume
level-I trauma center. Given the pressures of cost containment and the good
will generated among hospital administrators by the orthopaedic department's
effort to participate in cost containment, we think that this effort was
worthwhile. As further competition enters the market for manufacturer-based
reprocessing, even greater savings may be realized.
One limitation of this study is the unknown third-recertification pass
rates and the limited data on second-recertification pass rates currently
available. For the purposes of our study, we used a conservative estimate of
recertification at each pass. For mathematical simplicity, we used the same
pass rate for each subsequent recertification of a given external fixator
component. However, it would not be surprising to discover, with further
inquiry, that the recertification rate of components decreases after
successive uses as a result of mechanical fatigue or wear. While this unknown
factor might decrease potential long-term savings of reuse programs, we
attempted to account for it by using a fixed pass rate set conservatively at
75%.
The patients' participation with regard to allowing their external fixation
components to be sent for retesting was voluntary. Patients who desired to
take home the complete external fixator that had been used on their extremity
were entitled and allowed to do so. At our level-I trauma center, <5% of
the patients elected to take home their external fixator parts in lieu of
participating in the reuse program, although Tornetta et al. reported a much
higher rate7.
Clearly, any significant patient refusal to participate is a source of
overestimation of our potential savings. We did find that many patients who
wanted to maintain possession of their fixator were content to keep a subset
of components, such as the carbon-fiber components, and return reusable
components to the reuse program. We recommend a thorough explanation of the
reuse program to patients.
Another option is the possible reclassification of external fixator parts
as temporary-use constructs that belong to the hospital. In such a model,
similar to that described by Dirschl and
Smith6, the
components are effectively "rented" by the patients. Additionally,
the issue of informed consent for application of reused devices should be
addressed. When reused non-implantable components have met original product
specifications in manufacturer testing, are fully under warranty, and are
classified as inherently low risk for infectious spread by the FDA, it is
unclear if informed consent for reuse is at
issue10. Because
our project involved reusing only the components that met the same rigorous
standards as original products in an FDA-approved recertification process, and
because no identifying individual patient information was evaluated, our
economic analysis was also exempt from institutional review board
approval.
A topic for further discussion is the beneficiary of these savings. This
paper should provide some estimate of the reduction in the cost of external
fixation. Is the hospital obliged to pass these savings on to payers, be they
insurance companies or self-paying patients, by lowering charges for external
fixators? The percentage relationship between what the hospital pays for
orthopaedic implants and what the payers are charged is unclear to us. If the
equipment is classified as "rented hard goods," then the hospital
may set the rental price as it desires. If the new and recertified products
are billed to the patients as implants, must the hospital reduce the billed
charges for these items as recertification programs yield reductions in cost?
Are the savings absorbed into the operating-room budget, or may they be
counted as credits on the ledger of the hospital trauma program? These issues
are as yet undecided at our institution, and they merit further discussion as
recertification programs gain market share.
Given the growing trend to reuse medical devices, this study can serve as
an example of involving medical device manufacturers in the reuse process to
the benefit of the hospital, patient safety, and the manufacturers themselves.
The equations that we derived for our study, found in the Appendix, may be
used as templates to calculate the potential savings of a program on the basis
of the pass rates of components, the likely number of permissible reuses, and
the resale discount of reprocessed devices compared with new devices.
Details of the study methodology are available with the electronic versions
of this article, on our web site at
(go to
the article citation and click on "Supplementary Material") and on
our quarterly CD-ROM (call our subscription department, at 781-449-9780, to
order the CD-ROM). ?
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