REPROCESSING OVERVIEW

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GOALS FOR TODAY

Understand how the reprocessing industry

has evolved and how greater opportunity can

be found today

Learn how to drive the most out of your

current reprocessing program

Understand strategies to overcome

objections in your facility to maximize savings

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Simply Stated………

Reprocessing is the total cleaning,

decontamination, refurbishing,

testing, inspection, packaging, and

sterilization of used Single Use

Devices.

WHAT IS SUD REPROCESSING

Open Discussion: What is your experience with Reprocessing

in your facilities?

THINGS TO CONSIDER…

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• Healthcare facilities are the #2 contributor to our waste steam, creating 4 billion tons of waste annually

• Supplies account for 25 to 30% of a facility’s variable expenses

• The second largest expense next to labor

• Annual supplies inflate from 1 to 10%+

• Reimbursement challenges continue to force efficiencies

• Higher deductibles / Variable case volumes

• No product or service can impact your bottom-line more than reprocessing

THINGS AN OEM MIGHT SAY…

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• YOU can’t reprocess my products…

CMS has been cracking down…

• WE have a contract with your

facility…

• MY job is to look out for you…

• I won’t stand behind a device that

has been reprocessed…

• WE have a new technology you

should consider…

MOST COMMON CONCERNS…

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• LIABILITY

• We become the manufacturer

• QUALITY

• 99.98% quality rating

• STERILITY

• No infections tied to a reprocessed SUD

• “My doctors don’t want to use reprocessed devices”

• Keep in mind that “reprocessing” means different things to many people…

2000 2002 2011 2009 2012

$20 Million & Unregulated

KEY MARKET STATISTICS

$2+ Billion Opportunity (growing annually)

$400 Million Dollars Actualized today

3,000+ Hospitals “Reprocessing” Today

Over 1,500 ASCs Reprocessing Today

10 Million Pounds of Waste Reduced Nationally

70 Million reprocessed devices used nationwide

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1) Mayo Clinic 2) Cleveland Clinic 3) Massachusetts General 4) Johns Hopkins 5) UCLA Medical Center 6) NY-Presbyterian (Univ. Hospital of Columbia and

Cornell 7) UCSF Medical Center 8) Northwestern Memorial Hospital 9) Hospitals of the Univ. of Pennsylvania 10) NYU Langone Medical Center 11) Barnes Jewish Hospital-Washington Univ. (St.L) 12) UPMC Presbyterian Shadyside, Pittsburgh 13) Brigham and Women’s Hospital, Boston 14) Stanford (CA) Health Care / Hospital 15) Mount Sinai Hospital, NY 16) Duke University Hospital 17) Cedars-Sinai Medical Hospital (Los Angeles) 18) Univ. of Michigan Hospitals and Health Centers 19) Houston Medical Hospital 20) University of Colorado Hospital

All 20 of US News & World Report’s “Honor Roll” of Best Hospitals Reprocess

Increase in stock value of the 5 largest cardiology device manufacturers since 2014

HOSPITAL

119% OEM stock price

Average operating income of the 291 largest IDNs since 2014

DEVICE MANUFACTURER

-33% IDN operating income

Device manufacturer’s stock price more than doubled, while IDNs operating income fell by a third.

INDUSTRY PROFITS AT HOSPITALS’ EXPENSE

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Operating Profit Margin (OPM) Percentage = Revenue minus (COGS + operating expenses)

Net Profit/Net Income/Net Earnings =

Becker’s Hospital Review (2018) - Average OPM for AA+Rating = 4%

($100,000 in NET PROFIT) / 4% OPM = New Revenue Stream of $2,500,000

…..How many more operative cases? Non-operative procedures?

…..How many new patients?

…..More staff?

…..More supplies?

…..More hours?

Or Reprocess and have the $100,000 go toward…..

REAL LIFE IMPACT

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»The purpose of reprocessing is to bring a single use device to the same

•Form

•Fit

•Function

as a brand new device

WHAT IS REPROCESSING?

“A device can be labeled ‘single- use’ because the manufacturer believes that that it cannot be safely or reliably used more than once, such as suture, or because the manufacturer chooses not to conduct the studies needed to demonstrate that the device can be labeled as reusable.”

The decision to label a device as single-use or reusable rests with the manufacturer, not the FDA.

From the Government Accountability Office

SINGLE USE DEVICE DEFINITION

GOVERNMENT ACCOUNTABILITY REPORT

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JOURNAL OF MEDICAL DEVICES

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REPROCESSING ENDORSEMENTS

PRODUCTION TOUR…

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https://www.medline.com/pages/renewal-reprocessing/

Reprocessing is Validated:

Cleaning

Decontamination

Refurbishing

Testing

Inspection

Packaging

Sterilization

… of used single-use devices

THE PROCESS…

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A SAMPLING OF THE SINGLE-USE DEVICES WE REPROCESS --OVER 6,000 SKU’S--

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ORTHOPEDIC Ablation Wands Arthroscopic Shavers, Abraders and Trocars Drill Bits and Burs Blades (CTR, ACL, Debrider and Saw) Rasps Tourniquets Reamers Scorpion Needles ExpresSew™ Needles Suture Lassos, Graspers, Passers and Retrievers Ex-Fix

ENT and OTHER Coblators® Colorado Microdissection Needles™ Adenoid Blades Xomed® Shavers Ultrasonic Scalpels (FOCUS ®+) ENT Shavers

OPHTHALMOLOGY Phaco Tips

GENERAL/GYN/URO Ultrasonic Scalpels (including ACE®+) Laparoscopic Trocars and Cannulas Vessel Sealers / Dividers (Ligasure) Endoscopic Scissors / Dissectors (Monopolars)

MULTI-DEPARTMENT Compression Sleeves (SCDs) Pulse Oximeter Sensors Manifolds (Neptune® and Dornoch®) Air Transfer Mattresses (HoverMatts) Pressure Infusers Cervical Collars Anesthesia Masks ECG Leads Cerebral/Somatic Oximeters Fall Alarms (Bed and Chair) Open/Unused/Expired Items

CATH LAB EP Catheters Diagnostic Ultrasound Catheters Cables

DEVICES ARE SUBJECTED TO WORST CASE REPROCESSING CONDITIONS AND ARE TESTED FOR CONTINUED SAFETY AND EFFICACY

VALIDATIONS

» To obtain 510(k) clearance, the FDA reviews test data generated from the following studies/activities:

• Cleaning/Disinfection

• Sterilization

• Packaging

• Biocompatibility

• Functional Performance

• Risk Analysis

» During premarket review, FDA also reviews ALL manufacturing specifications and reprocessing SOPs to ensure that validated parameters are appropriately transferred to reprocessing procedures and controls.

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WHO’S LIABLE FOR A REPROCESSED DEVICE?

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$10K to $25K+

CALCULATING FINANCIAL SAVINGS OPPORTUNITY

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Analyze a Facility Item File / 12 Month PO History File

WATCH OUT FOR “CHIPPED” TECHNOLOGIES

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$(50,000) - $(1,000,000)

GAINING SURGEON ADOPTION

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Presentations

Product Evaluation

Blind Studies

Virtual Tour

Plant Visit

Surgeon Champions

NURSE AND TECHNICIAN TRAINING

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In-Services

Contests

Green Reporting

Virtual Tour

Business Reviews

Champions Visit

REALIZING SAVINGS POTENTIAL… • Promote Initiative to all Involved:

− Administration

− C-Suite

− Surgeons

− OR Managers & OR Techs

− Materials Managers

− Risk Management / Infection Control

− EVS

− Decontam / SPD

• Establish a “Program Champion” Physician and OR Staff Member

• Virtual tours / Blind studies

• Establish savings goals / ERP

• In-service early and often

• Begin Collection of Devices

• Review buy-back and opportunities to expand

• Explore options to streamline the ordering process

• Work with your reprocessor on new opportunities

• Watch out for OEM counter-detailing / contracts / anti-reprocessing technologies

• Manage & Monitor Progress

• Celebrate Success

WHAT ARE YOUR SUPPLY CHAIN GOALS?

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