It Takes More Than a Long Product List to Optimize Reprocessing Savings
At Innovative Heath, we boast of a large and growing number of FDA (510(k)) clearances. New FDA clearances are a prerequisite for a reprocessing program that yields high savings. Further, today, specialty reprocessing has enabled the inclusion of more complex, higher cost devices in reprocessing programs – thanks to growing technical and regulatory focus.
However, a long list of devices that can be reprocessed is not enough to ensure that savings are optimized. We see EP (Electrophysiology) reprocessing programs where many high-end devices are available for reprocessing, but they are not effectively collected, buy-back practices are sub-optimal, or clinicians simply don’t want to use reprocessed high-end devices. As a result, the list of reprocessable devices is very theoretical and savings cap out at a fraction of the potential savings that could be achieved if all devices were reprocessed and re-used. Earlier this week, a customer put it to me this way: Reprocessing is not just a list of prices and a contract. The program has to be managed diligently.
... a long list of devices that can be reprocessed is not enough to ensure that savings are optimized.
At Innovative Health, we used to think that reprocessing is easy: The price for reprocessed devices is half of new devices – all we need to do is to collect the used devices and tell the account they can buy them back and save a lot. However, programs that are managed this way yield very little in terms of savings and thinking of reprocessing as “easy” costs many EP labs and hospitals lots of money every year. So today, we are talking about specialty reprocessing not only in terms of the number of FDA clearances and the complexity of devices we can reprocess – but in terms of tailored program execution. Fundamentally, the transactional, logistical approach to reprocessing is the wrong approach. A successful reprocessing program is a collaborative, organizational task based on data and constant interaction – at several levels.
- A strong specialty reprocessing partner is data-driven and knows about the EP lab’s past utilization patterns, national average device prices, rejection and buy-back rates, par levels, physician preferences, and device configurations by case type. You should expect nothing less from your reprocessor than carefully prepared statistics that show these key figures and build on those to design the optimal reprocessing program.
- Similarly, data should drive the ongoing management of the specialty reprocessing program, so that managers and stakeholders at and around the EP lab constantly have visibility to the results and trends of the reprocessing program. When collections are down, operational routines or par levels may need to be addressed. When total savings are down, the lab should be addressing device utilization and acceptance as well as buy-back efficiency – potentially involving supply chain and hospital leadership. Program management is a collaborative effort between hospital and reprocessing partner, and frequent savings reviews should drive increasing compliance and savings levels.
- A successful specialty reprocessing program involves deep understanding of the market dynamics that drive the development of new technologies, new product launches, competitive developments and device usage – and knows how to respond. The launch of new technology can drive better clinical outcome, but it can also drive losses in reprocessing savings without translating to clinical or operational improvements. If your reprocessor does not have an economics department, you should ask why.
- An effective specialty reprocessing program will boost your reprocessing savings program by providing operational and technical/engineering support to ensure that you can make the right decisions about the use of new and reprocessed technology. This requires ongoing presence and interaction with clinicians and administrators as well as deep knowledge of the clinical area – from an economics as well as from a clinical/technological perspective. Our engineers and clinical staff spend days at a time with EP physicians to understand their preferences and concerns, and to educate about reprocessing technology, safety and device functionality.
- Last but not least, a specialty reprocessor gets INVOLVED in EP lab management. Every EP lab is unique, and the dynamics of the EP lab determines everything from device utilization to the acceptance of reprocessed devices and the workings of the reprocessing program. We work with EP lab managers to help them leverage buying power to better manage their vendor relationships. We support them in pricing analysis. We help support the training of hospital technicians to become independent of manufacturer mapping support. Every week, we see customers at our plant to discuss how to manage supply chain decisions.
A successful specialty reprocessing program involves deep understanding of the market dynamics that drive the development of new technologies, new product launches, competitive developments and device usage – and knows how to respond.
As we start 2020, Innovative Health is committed to continuing our momentum in getting more clearances to save EP labs more money in EP procedures. But at the same time, we are working diligently with every single account to ensure that savings aren’t “theoretical” but are maximized and realized through collaborative program management. Several of Innovative Health’s reprocessing partners saved more than $1 million in 2019. Many more have the potential to increase their savings to this level. Watch Rick Ferreira, CEO at Innovative Health discuss the 2020 plans for specialty EP reprocessing in this video.