Scope repair options raise tough questions, draw mixed reviews

With the cost of new endoscopes reaching $20,000 or more, it's little wonder physicians, material managers and others involved in the purchasing process take great pains in selecting the instrument and vendor best suited to their needs.

Unfortunately, the same care and consideration doesn't always go into the selection of scope repair companies--an oversight that is often rooted in cost-cutting efforts and may compromise the device's integrity, jeopardize patient safety and cost the facility far more than it bargained for, sources told Healthcare Purchasing News.

"An endoscope is a very sophisticated piece of medical equipment that requires proper care and maintenance throughout its life. Unfortunately, we're seeing a proliferation of third-party repair vendors that do not have the extensive training, materials, processes and specifications to properly repair endoscopes," noted Eddie Garces, executive director of Olympus' Endoscopy Services with national headquarters in San Jose, CA.

Some third party vendors are modifying these instruments to the degree that seriously compromises the performance of the products as they were originally intended, he said, adding that many times, physicians may not be aware of who is performing these repairs until after a problem arises.

Repair services with questionable reputations that primarily rely on low prices to attract business and routinely turn out shoddy work impact not only the endoscope customers and original equipment manufacturers, but also those third-party firms that have worked hard to establish themselves as quality repair vendors.

"There are many fly-by-night third-party companies out there that are giving us all a bad name," said Rob Purtell, product manager for flexible endoscopes, Mobile Instrument Service & Repair, a Bellefontaine, OH-based repair company that has been repairing endoscopes and other medical equipment for 26 years. "Just one bad outcome or situation can sour a physician on all third-party repair organizations forever."

Scoping out problems

Among the greatest repair concerns relate to a flexible endoscope's insertion tube. By and large, OEMs contend that substitution tubes used by third-party firms are inferior, with many of them lacking the flexibility, elasticity and durability of the originals.

Olympus reports that more than 20% of endoscopes sent to its repair facilities show evidence of third-party modification, with replacement of the original manufacturer's insertion tube being the third most common change. According to Garces, substitution tubes can either be too rigid or floppy, making it more difficult for an endoscopist to navigate the gastrointestinal tract, and perhaps resulting in longer procedures and increased use of medication to ease patient discomfort. Substitution tubes may also lack sufficient elasticity--a critical feature that allows intestinal loops to pop out easily when the endoscope is drawn back--as well as adequate column strength to prevent buckling of the tube and the reformation of loops as the instrument is advanced.

"Olympus has spent more than 50 years in research and development to come up with an ideal insertion tube that combines a proper balance of flexibility and elasticity," he said. "It pains us to see insertion tubes that no longer have this capability. The third party has actually negated the very characteristic that motivated the customer to select that endoscope in the first place."

And Olympus isn't alone. John Konsin, vice president of marketing for Smith & Nephew Endoscopy, Andover, MA, said the manufacturer has seen scopes return with previously used inner components and replacement parts that don't come close to the quality of the original tube.

"The insertion tube greatly impacts the visual performance of the scope, so it's imperative that the tube function as it was originally intended. Unfortunately, we'll see sub-standard parts being used, from the outer sheath to the inside optical components," he said. "Customers usually aren't aware of this when looking at the scope because visually, it may look the same as before it was sent out for repairs. When you see it from the inside, though, it's a completely different story."

Boston's Beth Israel Deaconess Medical Center knows that story all too well. When endoscopists in the hospital's gastroenterology department noticed that metal stents were becoming lodged in the bending portion of the channels, they immediately began investigating the problem. After meeting with the stent manufacturer, scope supplier and the third-party repair vendor, they pinpointed the source of the problem.

"We found that the replacement channels used by our third party vendor were completely different from the original Olympus channels," noted Ram Chuttani, M.D., chief of endoscopy for Beth Israel Deaconess Medical Center. "The [original] channel had a sheath with a woven metal bending portion at the end. On the third party channel, the sheath was some sort of plastic with a metal weave running the entire length of the channel."

Chuttani said the third-party channel compressed in size as it was turned, unlike the scope's original metal woven bending portion, which did not show any decrease in diameter.

"The discovery was a bit of a shock," he said. "At the outset, our third-party vendor assured us that all of their engineers were extremely qualified [and would use] the same equipment, same spare parts and same protocols with no material difference in the quality of repairs. Clearly, that turned out to be very untrue."

OEMs would generally agree that many other healthcare facilities encounter similar--and far worse--experiences. The reason, they say, is simple: Most OEMs do not sell their parts or provide equipment specifications to third-party repair organizations, which means third-party repair firms cannot meet manufacturers' original specifications.

"When the product is initially conceived, there are obviously design specifications that the manufacturer must come up with. Then they have to develop certain methods, tools or fixtures to produce that design--all of which requires a great deal of knowledge and training," said Dan Scalzo, director of repair operations for Olympus' endoscopy service. "As the OEM, we make sure that we maintain those specifications when we perform our own repairs. Without the complement of tools, test fixtures, design specifications, knowledge and training, a third party vendor will be challenged to have that product operate as originally intended."

OEMs stress that customers should also take into consideration the stringent requirements set forth by the Food and Drug Administration, and the fact that third-party repair of endoscopes is generally performed by unregulated businesses. The FDA should be encouraged to regulate these businesses which world also help protect fire third party processors that adhere to FDA regulations.

"Registration with the FDA is voluntary, not mandatory, fur companies that repair medical equipment. Conversely, endoscope makers are medical device manufacturers and must comply with all FDA requirements," explained Gregg Agoston, sales manager, Protection 1 Services, Karl Storz Endoscopy-America Inc., Culver City, CA. "Because endoscopes are considered class II devices, a manufacturer must submit a premarket notification and obtain clearance from the FDA before marketing these devices."

While OEMs' unwillingness to sell their parts to third-party repair organizations and provide equipment specifications makes it impossible, by definition, for third-party firms to meet the manufacturers' original specifications, Purtell said that doesn't automatically translate into substandard parts or workmanship.

"Third-party replacement parts aren't all the same, just as OEM parts aren't all the same. You can spend a little or a lot, and if the focus is on the most inexpensive repairs, the quality will likely suffer," he said. Purtell stressed that Mobile Instrument strives to ensure that replacement insertion tubes--and other components--are as close to the OEM's as possible. Plastic, rubber and stainless steel components can be tested to ensure compatibility with other parts on the device, and certain components, such as a glass lens, can be even be sent to Germany to determine if it can be reengineered, he noted.

Brian Newton, president of The Scope Exchange, Greensboro, NC, said most credible repair companies are able to acquire "comparable optics and components that provide the same angle of view, field of view, magnification, resolution, instrument compatibility and degree of light transmission as the original products."

Paying the price

When it comes to endoscope repair, OEM and third-party repair sources agreed that the old adage, "You get what you pay for," holds true. In fact, they contend that rock-bottom prices will often translate into far costlier repairs down the line.

"Hospitals want to save money and they look to third-party repair organizations because they offer less expensive repairs. Unfortunately, many times, the original optics are being gutted and then the quality suffers. When the scopes come back to us, we have to replace those components," explained Melissa Waldroup, product manager for repairs and reprocessing, Richard Wolf Medical Instruments Corp., Vernon Hills, IL. Waldroup said it costs $1,100, on average, to bring the instrument back to the original specifications.

Agoston said the very process of opening the scope can damage light fibers and critical seals, and noted that uncoated or badly coated lenses and spacers can cause up to 80% of light to be lost due to reflection. What's more, he said the customer generally does not compare the image quality to that of a brand new scope to determine if all specifications are met, and may even use an endoscope that was repaired previously by the third-party firm as a reference.

"This may allow subtle or sometimes even significant reductions in quality to go unnoticed until they reach a point where surgeons and staff begin to complain about the scope's performance," Agoston noted. "They may even blame the OEM because it is their name and not the third party's that is on the scope."

Shoddy repairs can run the gamut from using non-medical grade (off-the-shelf) materials, previously used parts and severely modified components, and concealing leaks with epoxy that does not meet manufacturer specifications--all of which may compromise the ability to perform more economical repairs the proper way.

Garces said he has even seen Teflon tape placed over frayed mesh on the bending section of the scope, even though the correct approach of replacing the mesh isn't very expensive.

"[By masking fire problem with tape], those wires may find their way out, perforate the sheath that covers the bending section, and create an opportunity for fluid to enter the scope. Even more importantly, a wire may protrude and pose a safety hazard to the patient." What would have cost approximately $800 to replace the mesh could wind up exceeding $7,000 if the repair was done incorrectly, Garces noted.

Mobile Instrument has also "seen it all," from rusty screws to incorrect parts that had holes drilled in them just to make them work. Purtell said customers may also be surprised to learn that some seemingly reputable third party firms are repairing their highly sophisticated instruments in a garage or basement--a harsh reality that underscores the need for thorough investigation prior to plunking down money for any repair.

"Aside from ensuring that the repair company only uses medical-grade materials, [prospective customers] should go look at the facility and check references. A good scope company should have professional facilities and be able to provide you with references in that customer's area," he said, noting that Mobile Instruments operates out of a state-of-the-art, 50,000-square-foot facility.

Newton said customers should also be concerned if their repair vendor is farming work out to other vendors. To ensure that vendors aren't using inferior parts, he encouraged prospective customers to request a breakdown of parts and their material make-up. "If the repair vendor deviates from this composition, put a penalty in their agreement," he said, adding that inspecting the repair facility is still the number one method to gauge parts and their quality.

Greater flexibility

Because curbing unnecessary expenses is critical for today's budget conscious healthcare facilities, a growing number of endoscope manufacturers and third-party repair organizations are offering more sophisticated service programs to help drive long-term value.

In some cases, that has meant increasing the number of service centers to improve turn-around times and better meet customer needs nationwide, and offering instrument loaner and exchange programs to help customers manage the cost of ownership.

Through Karl Storz's exchange program, Protection 1 Services, customers' damaged scopes are replaced with a newly manufactured scope that meets all of the vendor's specifications for a new Karl Storz scope--and at a price that is competitive with third party repairs, according to Agoston.

"With Protection 1, the customer will never again need to pay full price for a replacement scope because with each exchange, they receive a scope that is certified by us to be equivalent in all areas to a new Karl Storz scope."

Olympus' 8,000-square-foot repair facility, 700 service employees and 17 service centers located throughout the country have helped the OEM stay on top of growing customer demand. Olympus has also developed a Cost Per Procedure/CPP financing solution that simplifies budgeting by tying productivity and volume to the amount of money being spent, allows easy upgrading to newer scopes, and ensures access to loaner instruments when scopes are being repaired.

Richard Wolf's Repair Exchange Program also contains newly refurbished endoscopes that have been brought back to manufacturing specifications. Service agreements are offered on most new product purchases, with just one annual payment covering all services and repairs. A range of financial services and programs are also available, including deferred purchase, rent to own, capital leasing, off-balance-sheet leasing, fee-per-use and disposable programs with automatic monthly shipments.

Beyond offering extended service agreements, Smith & Nephew has expanded its hours of operation at its repair facilities.

Many third-party organizations are also ramping up their services. Mobile Instrument, for example, provides loaner endoscopes at no charge, on-location inspections, minor lens cleaning and preventive maintenance services, and a three- to ten-day turnaround from the time of customer approval. The Scope Exchange also offers a free loaner program, along with a rental program that includes OEM high-quality, pre-owned, rigid, flexible fiber and video endoscopes, as well as support equipment that can be rented on a daily or weekly basis.

One equipment management firm has built its success around a slightly different business model. Surgical Services Inc., Orlando, FL, developed an On-Site Services division that provides various levels of support and services for endoscopic procedures. Specifically, the Endo Division supplies customers with a complete package of state-of-the-art instrumentation and equipment on a fee-per-use basis, along with a trained service technician that assists with room set-up and turnaround, provides instrument care, cleaning and inspection, and updates products as technology advances.

Additionally, SSI maintains its own repair center for both optical and stainless instrumentation. Because SSI is "brand neutral," the company determines customer needs and then purchases the type and brand of scope the hospital prefers; from there, SSI manages and maintains the instrumentation. The company also repairs scopes for customers that are not using the Endo Services model, however, such work is not the thrust of the SSI's business, according to president and CEO Chris Tihansky.

"Our business isn't driven by repairs. It is a service we provide," he explained. "Because we own the instruments, we have a great incentive to take great care of them."

Educational services have also taken center stage, with many OEM and third-party firms providing both formal and informal training on proper instrument handling.

"The goal is to educate customers on how they can prevent repairs in the first place," Scalzo said. "The best repair is no repair at all."

COPYRIGHT 2004 Healthcare Purchasing News
COPYRIGHT 2004 Gale Group