The supply chain staff at Beth Israel Deaconess Medical Center in Boston in late 2009 proposed a new program that would recycle two categories of single-use medical devices by sending them to an outside vendor to be disabled, sterilized and repackaged. Such a program would produce big savings, they promised.
And they were right. The 642-bed academic medical center saved roughly $375,000 in 2012 by having the devices reprocessed—sometimes at half the cost of original devices. It also diverted 10,000 pounds of medical waste, which is estimated to cost about $1 or $2 per pound to discard.
Now, the hospital reprocesses 15 categories of medical devices.
The idea “came up from supply chain as a cost-savings opportunity and it kind of evolved from there,” says Adam Robinson, a clinical contract manager at Beth Israel Deaconess.
Reprocessing single-use medical devices is not new. The practice has been around for decades, but the market has reported significant growth in recent years as more hospitals have started to implement reprocessing programs in an effort to save money and reduce waste.
In addition, some of the largest devicemakers in the U.S. have gone from critics of reprocessing to owners of third-party reprocessing companies.
“Of the different sustainability activities that hospitals are adopting across the country, this seems to be one of the more popular ones,” says Susan Kaplan, a research assistant professor at the University of Illinois at Chicago. “The main reasons are the cost savings and the benefits to the environment.”
However, there are still limitations to widespread adoption of reprocessing. Some clinicians continue to express concerns about the safety and performance of reprocessed devices, which can put hospital administrators and physicians at odds over the adequacy of the reprocessing process, and not all hospitals are moving forward with plans to implement these programs despite the potential for cost savings.
“The weight of the other pressures impacting healthcare as it begins to adopt the Affordable Care Act—(which is) just an enormous set of demands—might be a barrier,” says Gary Cohen, president of Health Care Without Harm, a coalition of providers and environmental, community and other groups that support sustainability in the healthcare sector. “However, because this is such a significant cost-savings measure, you'd think that would be something that would be overcome.”
Hospitals across the U.S. are reporting that reprocessing programs have led to millions of dollars in savings across the sector. The programs often serve as a hospital's flagship sustainability effort. Medical devices ranging from endoscopes to surgical forceps can be reprocessed.
About 3,000 of the nation's 5,000 or so hospitals have implemented reprocessing programs, according to the Association of Medical Device Reprocessors, which represents Stryker Sustainability Solutions and Johnson & Johnson's SterilMed. While many academic medical centers were early adopters of such programs, reprocessing proponents range from hospitals operated by for-profit players such as HCA to large not-for-profits such as 962-bed Yale-New Haven (Conn.) Hospital.
Stryker Sustainability and SterilMed say they are reporting year-over-year growth based on the number of hospitals that are starting new programs as well as on the hospitals that are expanding the number of device categories to reprocess.
Both companies declined to disclose revenue figures. Stryker and SterilMed, which was acquired by J&J in 2011 for an undisclosed amount, make up about 95% of the estimated $373 million market for third-party reprocessing. Stryker paid $525 million in cash in 2010 to acquire Phoenix-based Ascent Healthcare Solutions and renamed it Stryker Sustainability Solutions.
Mike Gustafson, worldwide president of SterilMed, says the company helps “hospitals build robust reprocessing programs so that they can achieve their economic and environmental goals.”
“Both hospitals and independent delivery networks, as well as clinicians, (understand) the need to increase access to care and improve affordability and they're looking for solutions,” he adds.
Both companies say the practice of reprocessing is safe, and noted that the Food and Drug Administration regulates the reprocessing of single-use devices and has strengthened its existing oversight since 2000. All reprocessed devices must receive 510(k) clearance from the FDA, which also inspects reprocessing companies and monitors reports of adverse events. The 510(k) pathway does not require clinical testing.