COCIR refurb standards could hurt preowned equipment market

By Wayne Webster, AuntMinnie.com contributing writer

July 29, 2009 -- Over the past year, while everyone has been distracted by the Great Recession, the European Coordination Committee of the Radiological, Electromedical, and Healthcare IT Industry (COCIR) moved forward with a plan to promote so-called quality assurance and safety standards for refurbished equipment that may very well make it impossible for small and medium-sized enterprises to compete with OEMs.

Wayne Webster of Proactics Consulting.
We should all be watching this carefully. If the smaller sellers and refurbishers of preowned medical imaging devices pass from the scene, the cost of providing and paying for medical imaging services is sure to increase at a faster pace than it is today -- both in Europe and in the rest of the world.

If adopted, COCIR's good refurbishment practice (GRP) proposal will likely establish an accreditation body to review quality assurance/control documentation and put others, presumably the OEM representatives, in control of dictating the standards by which preowned equipment is sold, installed, and serviced.

This may not seem like a bad thing if you are not in search of lower healthcare costs, or are one of the few who can afford a full-time staff member to document, respond to audits, and interface with accreditation bodies. At least not until you realize that the COCIR proposal doesn't require OEMs to provide the information needed to support the efforts of the non-OEM sellers and servicers of preowned equipment, such as passwords, copies of equipment manuals, or software (at a reasonable cost) or access to training (if tuition-paid).

It appears that under the COCIR proposal, OEMs can continue to withhold critical information from others selling preowned equipment. Limiting the ability of companies to serve a market by withholding the information they need to survive, and then supporting standards/regulations that demand they have the information to compete, appears to be inconsistent with a level competitive playing field.

The COCIR plan

So, what is COCIR? Founded in 1959, COCIR represents the medical technology industry in Europe. COCIR appears to be actively seeking support for its "quality assurance" plan in the U.S. and elsewhere. Simultaneously, COCIR seems reluctant to adopt protections within the plan for small businesses and to address healthcare cost containment.

If the COCIR plan to establish a GRP standard is promulgated in the U.S. and elsewhere around the world, the ability of buyers to determine for themselves when a piece of equipment is serviceable and useable appears limited. In addition, the ability of a non-OEM company to meet the requirements appears questionable.

Without non-OEM sellers and servicers of preowned equipment, it will most likely be more costly for many clinical diagnostic providers to offer diagnostic imaging services in their region in Europe and around the globe. Without available, affordable preowned medical imaging devices and independent service companies to provide parts and maintenance, the cost of healthcare could increase unnecessarily while essential diagnostic services may be impossible to support in lower-income markets.

Another nonprofit industry association, called IAMERS, the International Association of Medical Equipment Remarketers and Servicers, made many stakeholders aware of the COCIR-recommended standards when they discovered the publication on the COCIR Web site in late 2007.

IAMERS, founded in 1993, represents about 130 companies and more than 600 people worldwide, all engaged in some aspect of the sale, servicing, or financing of preowned medical imaging devices. As the technical editor for IAMERS, I was one of the first to receive the so-called COCIR "Green Paper" for review.

The document was ostensibly meant to deal with a serious issue in the used medical device market, according to Heinrich von Wulfen, COCIR chairman. In the foreword, he writes, "In recent years, some regional healthcare markets have been flooded with used medical equipment of questionable and inconsistent quality. This is why COCIR decided to design a new concept called 'Good Refurbishment Practice' that would provide requirements for making sure that used equipments are as safe and effective as when new."

I interpreted the statement to be an indictment of an entire segment of the medical imaging device industry, and this was done without any specifics whatsoever. One could imagine an uninformed regulator or legislator adopting the COCIR GRP standard as a way of rescuing a troubled industry segment. However, it doesn't appear to me that this segment of the industry is in trouble or in need of rescue.

IAMERS went to the U.S. Food and Drug Administration (FDA) and asked for records of recent adverse events concerning medical diagnostic equipment. According to FDA, there are no records of recent adverse events. As far as I know, when questioned about this claim, COCIR did not identify the extent or type of "flooding" in recent years -- the reason claimed for producing the GRP standard, which is now apparently a final document following its publication in June 2009 on the COCIR Web site. Without a retraction, one has to wonder how many sales of used equipment were lost as a result.

Who wouldn't want to stop the recent flooding of "healthcare markets with ... used medical equipment of questionable and inconsistent quality" as stated by COCIR? The answer is no one, but it never happened. The best evidence offered is that there may have been some instances of used medical equipment reaching China over a decade ago that may have been of questionable quality. But even this claim is provided by COCIR without specifications or detail.

A counterproposal

Here's a counterproposal for COCIR and its GRP standard. Everyone wants to produce the best product possible. In the preowned medical imaging device market, those who market, refurbish, install, and service equipment would find it much easier to meet the high standards set within the document if those backing the GRP standard and its implementation agree to publish all of the information required to meet the GRP standard and cooperate fully with passwords, training, and manuals.

Once this information is available to the general public for the proper handling, feeding, and upgrading of preowned medical imaging devices, the preowned equipment vendors could then possibly address the requirements and the customers could confirm that all necessary steps have been taken. To do any less means the disassembling of a group of vendors with demonstrated ability to recycle and refurbish equipment. It is appropriate to help hold the line on medical equipment costs and bring medical imaging services to areas where there is demand but not the capital budget to purchase new devices.

Today, safety should be a concern for those who sell and service medical imaging devices. Therefore, it's appropriate to sound the call for emergency safety help when there is a true safety emergency. The reputations of good people who responsibly sell preowned medical imaging devices should not be impugned for the sake of market advantage. It's time for dialogue. No one organization or group alone holds the keys to better healthcare.

By Wayne Webster
AuntMinnie.com contributing writer
July 29, 2009

Wayne Webster is the principal of Proactics Consulting, which he founded in 2003 to provide business planning and strategic acquisition support for diagnostic imaging clinics and hospitals seeking new opportunities in medical diagnostic imaging. Prior to founding Proactics Consulting, he held executive and senior management positions at several companies over three decades. He can be reached at info@Proactics.net.

The comments and observations expressed herein do not necessarily reflect the opinions of AuntMinnie.com, nor should they be construed as an endorsement or admonishment of any particular vendor, analyst, industry consultant, or consulting group.

Refurbished equipment helps imaging facilities do more with less, March 1, 2007

Copyright © 2009 Wayne Webster

 

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