BY K. RICHARD DOUGLAS
Buying anything in America has become more of a challenge than it was just a few years prior. Prices are off the charts. Inflation recently hit 9.1 percent and the consumer price index (CPI) has indicated that many consumer costs have risen substantially.
Buying decisions have consequences, especially when they must fit into a budget. Value and quality must be matched to the best price available.
Hospitals and health systems have come under more pressure in recent years as budgets have tightened while the Centers for Medicare and Medicaid Services (CMS) penalties have hurt some hospitals and health systems. In 2020, with the challenging environment that the COVID-19 pandemic caused, CMS still penalized 83 percent of the 3,080 hospitals it evaluated.
Hospital leaders continue to seek cost savings across departments. This includes the healthcare technology management (HTM) department, which needs to find efficiencies through resourceful thinking.
Cost increases and availability problems have made sourcing parts and budgeting for parts more difficult during the last year.
Several factors, remnants of the pandemic, have helped to pile on the factors that have caused back-logs with many parts. Lockdowns in several cities in China impacted various shipping ports, causing supply chain problems. Those problems existed through May and then began improving.
By mid-July, the volume at the Port of Shanghai had been increasing since mid-May, with the 14-day average ocean shipment volume down only two percent compared to mid-March. So, supply chain problems, originating at the ports in China were improving.
The improvements in the China shipping ports may be only part of the story. The corrected situation still resulted in a backlog.
“Staffing shortages resulted in limited production of products and depletion of existing stock. You can’t ship what you don’t have on the shelf. This creates an issue for HTM departments because the push has been a reduction of on-hand parts and utilization of just-in-time ordering,” suggests Mike Busdicker, MBA, CHTM, AAMIF, FACHE, system director of Clinical Engineering/Intermountain Environment of Care at Intermountain Healthcare in Midvale, Utah.
He says that shipment of consumable supplies and parts was not the only issue. Receiving ports were experiencing — and continue to experience — shortage of staff and a delayed ability to offload product. This creates a backlog at receiving ports and delayed shipment of supplies and parts to health care facilities.
“There are a number of parts manufactured in China, but that is not the only country where our parts come from. In fact, there might be components of the parts manufactured in China and shipped to other countries for installation into the main part. Therefore, there is a delay in component shipment from China, a delay in receiving, a delay with installation of the component, a delay in shipment of the part, and then a delay in receiving,” Busdicker adds.
Right to Repair
With a national movement making inroads into the right to repair issue, and all that entails, the hope has been that the tide would turn in the medical device sphere. There has been no lack of effort in turning the tide and bringing more accessibility to documentation and parts. During the pandemic, this problem was exacerbated by the restrictions on OEM field service engineers’ entry into health care facilities and their availability.
“The push for medical right to repair has reached a bit of a stalemate. While we haven’t been able to pass any laws, we worked this spring to bring together hospitals, ISOs and biomed associations to stop a manufacturer-backed bill in Congress that would have made the problems of repair restrictions worse. Holding the line is good, but our hospitals and patients deserve legitimate progress on this issue. We’ll keep pushing until medical right to repair becomes law,” says Kevin O’Reilly, director, Campaign for the Right to Repair at U.S. PIRG.
O’Reilly is referring to a letter signed by leaders from health systems representing 253 hospitals across 26 states, along with independent service organizations (ISOs) and biomeds in response to changes to the definition of “remanufacturing” suggested by Rep. Scott Peters of California.
The letter was sent to the House Energy & Commerce committee opposing new language to the Medical Device User Fees Amendment (MDUFA) that could, as U.S. PIRG has pointed out, “severely reduce competition in the medical device repair industry.”
The lack of progress in the medical device portion of the movement is reflected in the real-life experience of biomeds who have experience purchasing parts.
“We have not seen any noticeable change with the improvements with right to repair. Our ability to source parts has stayed about the same. Our biggest problem has been getting it shipped in a timely manner. As far as we can tell, shipping seems to be the problem. With COVID and supply chain issues, shipping has become a nightmare. Even if you find a part, there is no guarantee that you will get it in your timeframe,” says Charles “Chuck” Overeem, biomedical equipment lifecycle planner, at ProHealth Care in Waukesha, Wisconsin.
Parts Procurement Tips
The process of obtaining parts efficiently, at the most affordable costs, while maintaining the highest quality, is a product of strategic thought. The groundwork has to be covered first.
“The process remains the same, obtaining all relevant information up front from your techs and engineers being key. Have the correct make, model and even serial number of the equipment in question. Get an accurate part number, version number and software revision and then start contacting your parts supply network,” Overeem says.
He says that the goal remains the same; obtain quality repair parts at a cost savings in a timely manner.
“You need to have a network of vendors. I like to have at least three that I will contact for each part. I will contact each of them for every part I need and have them compete on quality, price and timeliness. You should rate them however [whatever way] works best for you, but never only call your number one; always reach out to all three,” Overeem suggests.
He says that if for some reason your number one does not have what you need, you don’t want to wait for that determination and then contact number two or three; that will delay your repair needlessly.
“Every time we contact a vendor, while searching for a part, we record the price they quote, even if we do not buy it from them. You also need to track part quality; things like DOA, failure under warranty or even failure soon after warranty and how did they take care of you. A part is of no value to you if it fails and you have to buy it again and again or the vendor does not respond urgently to a warranty issue, and you end up with extended down time,” Overeem adds.
He says that even after establishing a top three, always be on the lookout for other vendors.
“In this industry, companies come and go, they are bought and sold, people retire, and new companies emerge, so you always need to keep an eye on who is out there. I would rather have more vendors than I need rather than to find out that someone I counted on is no longer there and not knowing where to go next,” Overeem says.
Busdicker says that reduction of equipment downtime can be crucial in the ability to treat and care for patients. He says that the availability of parts often has a significant impact on the rapid repair of equipment.
“Service histories can be utilized to determine high usage and high failure rate parts for specific models of medical equipment. These histories can be obtained by working with the equipment manufacturer, utilizing a parts provider, or generating reports from a computerized maintenance management system. Once this information is available, a department can establish stock levels of the identified parts,” Busdicker says.
Overeem says that as equipment ages, particularly after the end of life and end of support declarations, parts will eventually become harder and ultimately impossible to find.
“I recommend that you keep administration advised of the increasing difficulty in finding parts so they can plan accordingly. It would be better to have time to research and negotiate a price on a new piece of equipment before yours is unrepairable and they have to rush just to get something to use,” he says.
Busdicker points out that a number of parts utilized in medical devices are not produced by the equipment manufacturer.
“At times, these parts can be sourced directly through the company supplying the part to the equipment manufacturer or they can be sourced through an alternative parts supplier. It is important to review the part specifications and ensure they are a match to the part being replaced,” he says.
He suggests that another alternative in the purchasing of parts involves utilizing an organization that specializes in this area.
“The major players in this arena have done a tremendous amount of work in validating the quality of parts providers. Even with that said, organizations should still evaluate potential suppliers to ensure they are following quality standards, can provide detailed reports, continually measure performance, and are providing safe products,” Busdicker adds.
Lockdowns
The reverberations of the pandemic only intensified an already challenging environment of OEM restrictions on parts and documentation. Often, the availability of parts comes down to the service model employed. Also, while the pandemic is mostly a thing of the past in the U.S., it is impacting some other countries and their commerce.
“The pandemic is impacting staffing across the world and generating delays in manufacturing, shipping and receiving of parts. Again, this is causing extended equipment downtimes and the ability to treat and care for patients,” Busdicker says.
He says that during the height of the pandemic, most health care organizations would not allow outside service providers into their facilities.
“This caused an issue for equipment covered under service agreements and equipment not serviced with staff employed by the hospital. The in-house staff could not acquire parts required for the repair because of the lack of training and limited technical knowledge on the down equipment,” he says.
Busdicker points out that repair parts can be a steady revenue stream for organizations like a manufacturer or medical equipment suppliers.
“In some cases, these companies will lock down the ability to purchase parts by requiring technician training. In extreme cases there are companies locking down the ability for independent service organizations and in-house service departments to purchase parts at all. These scenarios can cause equipment service costs to be very high and result in extended downtimes,” he says.
“Parts availability and any training requirements should be an area of discussion prior to acquiring new medical equipment. During this time organizations can leverage the purchasing process to work with manufacturers and equipment suppliers in the acquisition of parts, training or other required elements of service capabilities,” Busdicker adds.
The availability of parts, and the pricing of parts, will both improve when the residual effects of the pandemic are finally in the rearview mirror. Also, as the right to repair movement gains more ground and finds more success in the medical device segment, the availability of parts should improve. These changes will take time, but are moving in the right direction.