Responsible Healthcare Spending at the VA?

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How much patient care can you buy for $30 million?

By Lars Thording, VP of Marketing & Public Affairs at Innovative Health LLC

The Department of Veterans Affairs (the VA) is the largest health system in the United States with 1,255 healthcare facilities, including around 170 hospitals and an annual budget of more than $200 Billion. It is the third-largest federal agency after the Department of Defense and the Postal Service. The VA’s primary role is to meet the healthcare needs of the country’s veterans and their families. However, they are also supposed to provide a safety net for the U.S. medical system in times of crisis, as indicated in its Fourth Mission: “VA’s ‘Fourth Mission’ is to improve the Nation’s preparedness for response to war, terrorism, national emergencies, and natural disasters by developing plans and taking actions to ensure continued service to veterans, as well as to support national, state, and local emergency management, public health, safety and homeland security efforts.”

However, a Bloomberg article from April 18 last year – “VA Hospitals Are the U.S. Safety Net. Covid-19 Exposed the Holes” – called our attention to certain problems in fulfilling the Fourth Mission: Across all 170 hospitals, the VA was treating 5,000 virus patients, but only 135 of them were civilians. One of the reasons: The hospitals could not afford to purchase enough personal protective equipment (PPE), and therefore many ICU beds remained empty at a time when other hospitals were overflowing. This problem was (is) not exclusive to the VA, as many U.S. hospitals experienced PPE shortages to the point where operational limitations were reached and staff safety compromised. 

Responsible spending?

The size of the VA budget is determined by Congress and approved by the President, so it’s hard to blame the VA for lacking resources. However, whether the health system can afford the necessary PPE is not just a product of the budget; it is also a result of how the VA is spending its resources – whether it is spending responsibly. There are areas where this vital health system is falling down on the job in that regard – and has been for years. One example is the agency’s decision to not engage in the reprocessing of single-use devices. In addition to costing the agency millions upon millions of dollars every year (an estimated $30 million alone in the electrophysiology lab), this policy neglects the VA’s stated commitment to environmental stewardship.

Single-use device reprocessing is associated with responsible spending at most U.S. hospitals. All U.S. News & World Report’s Honor Roll U.S. hospitals have reprocessing programs, and many hospitals depend in their budget on savings from the use of reprocessed single-use devices. This is because the use of reprocessed single-use devices is more than a nice source of funds for the annual Christmas party: Savings are considerable – in some hospitals, millions of dollars a year. The practice established itself during the 1990s and has been tightly regulated by FDA since 2000. During the years since, clinicians and others have spoken out with concern over the practice, demanding that using reprocessed single-use devices was not safe and would result in malfunction of the devices in question. However, such concerns have largely evaporated, as administrators have come to rely on the savings, clinicians have become comfortable with re-use, and statistics have failed to show added risk or device failure.

However, the VA is one health system that stands out from the rest: For many years, it has been the policy of the agency to not engage in the reprocessing of single-use devices. In its VA Handbook 7176 from August 16, 2002, part 7, section 2, the organization prescribes that no single-use device will be reprocessed. In spite of several attempts to call attention to the problems in this policy in the years and decades that followed, the policy still stands. 

Single-Use Device Reprocessing and the VA

In 2008, the Government Accountability Office (GAO) issued its second report about single-use device (SUD) reprocessing and concluded that its findings “do not suggest that reprocessed SUDs currently in use pose an increased safety threat.” The report also found that “the Department of Defense […] allows individual medical facilities the option of using SUDs that are reprocessed […] in contrast […] the Department of Veterans Affairs has had an agency-wide policy prohibiting the use of reprocessed SUDs in any of its medical centers since at least 1991.” This put the spotlight on the VA and its anti-reprocessing policy in the trade press and even in the Wall Street Journal, where Kenneth Kizer (ironically a former undersecretary for health at the U.S. Department of Veterans Affairs) stated that, “Single-use labeling is a real scam for a lot of devices, and by not using reprocessed devices where possible it is wasteful and not environmentally responsive, since these items have to be disposed of as biomedical waste. The reuse of medical devices that are labeled for single-use only is a well-established and safe practice regulated by the FDA and utilized by most of the top-ranked hospitals in the country.”

After a formal request for policy review, the Association of Medical Device Reprocessors (AMDR) sent a letter in April 2008 to then Director of VA’s National Infectious Diseases Program Dr. Gary A. Roselle, explaining in detail the strict FDA control of single-use device reprocessing, the general support of reprocessing by the clinical community, and the strong safety record of reprocessed single-use devices. 

The result of this review was provided in an executive decision memorandum dated Feb. 17, 2009, which states that “The Single-Use Devices (SUDs) Work Group recommends continuing the current policy that does not permit the reprocessing of any medical device labeled for single-use.” The VA bases this decision, the document shows, on undocumented safety concerns that run counter to the highly involved FDA clearance and oversight process, on the lack of studies showing actual environmental impact, and even an obscure questioning of the reality of substantial cost savings. Interestingly, the document does consider the risk that “VHA could be accused of fiscal irresponsibility for failing to take an opportunity to reduce unnecessary costs,” but this clearly does not drive the ultimate decision-making. The decision was rescinded due to Handbook review and then reinstated in 2012. 

Since then, AMDR and its members have made several attempts to have the VA reconsider their position, particularly in the light of a growing safety record and the adoption of single-use device reprocessing by almost all U.S. hospitals. 

At the same time, the VA has recently been under scrutiny for their own internal reprocessing of reusable medical devices, indicating restrictive policy doesn’t always align with rigid, safe practices in VA hospitals. And the VA has recently been called out by the GAO for not strategically pursuing cost savings and efficiency. 

Lost reprocessing savings at VA hospitals

The explanation provided in the VA’s policies is outdated and reflects an inaccurate perception of added safety risk. Even in recent years, when approached about reprocessing, the VA has refused to change its practice. Now, the VA has the right to establish its own policies, but when it coincides with an inability to purchase sufficient PPE in a health crisis, such policies represent irresponsible economics and sub-optimal patient care. How can the VA be a steward of its mission and at the same time decline millions in savings that would have enabled its hospitals to provide proper care in the pandemic and beyond?

The loss of savings at the VA from this policy is significant. In Cardiology/Electrophysiology, it is staggering. Out of the VA’s 170 hospitals, 84 offer cardiovascular services. Out of these, 60 percent – or 50 hospitals – have an electrophysiology lab where EP procedures, including ablation procedures, take place. Assuming VA hospitals have the same mix between complex and less complex procedures as non-VA hospitals, potential savings from reprocessing are $2,300 per EP procedure. Assuming (conservatively) that each lab does 250 procedures per year, each hospital loses $575,000 in savings annually. As such, the entire VA loses around $30 million per year by not reprocessing EP devices alone

Importantly, these are savings that do not require any change – no change in clinical practice, no change in technology, no change in device brand. Most initiatives to reduce costs require some level of change in behavior that can be disruptive to hospital staff.

Finally, the VA is committed to environmental stewardship through its Energy Management Program Service (EMPS). VA’s commitment to the environment points to waste prevention and recycling: “Reduce, reuse, and recycle materials and waste and maintain, and improve, life-cycle cost-effective waste prevention and recycling programs. Provide training and education to employees on the VA’s waste prevention and recycling policies and programs.” If VA hospitals with EP procedures started using reprocessed devices for both ablation and less complex procedures, the VA could reduce medical waste by almost 50 tons per year. There seems to be a gap between the reprocessing policy and the VA’s commitment to reuse. 

I am encouraged by the new administration’s strong focus on the environment and healthcare costs and expect it will demand better environmental and financial stewardship and compliance from its third largest agency. VA’s current policy on single-use device reprocessing would be a good place to start. 

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