South Florida Hospital News
Tuesday May 18, 2021
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January 2014 - Volume 10 - Issue 7
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Compliance, Risk Management Top Concerns for Hospitals and Medical Device Companies

Huge changes are taking place in the health care industry as medical professionals, facilities and insurers try to keep up with the latest regulations and innovations in the field. This is also true of medical equipment and supply companies that are now facing new taxes under the Affordable Care Act (ACA), as well as dealing with compliance issues focused on patient safety.
 
“One of the largest trends that we’re seeing in the industry is companies working toward compliance with USP 797, which is a set of rules that governs any pharmacy that prepares compounded sterile preparations,” said Jon Vitello, president of International Medical Industries, Inc. “This has become even more important as a result of the meningitis outbreak last year that happened as a result of an NECC (New England Compounding Center) error.”
 
International Medical Industries (IMI), established in 1969, provides products for compounding and nuclear pharmacies, including tamper-evident products for sterile I.V. syringes and oral non-sterile applications. The company, located in Pompano Beach for the past 17 years, stocks and manufactures products in its FDA-licensed facility that enhance compliance with USP 797.
 
“Clearly, compliance and risk management are more than buzzwords in the industry—they are a major focus. As a result, a lot of products and services are being developed as solutions to minimize errors in pharmacies or in the dispensing process,” added Vitello. “We’re also seeing strong implementation of color coding, bar coding, recording of the product and recording of the chain of custody. This is becoming more prevalent as a way to ensure patient safety.”
 
The medical supply and equipment industry is also being affected by the implementation of the Affordable Care Act, which is causing hospitals and other medical facilities to look for cost-containment options. “Medical providers are looking for ways to recycle drugs that are not used on the floor, which is why products with tamper-evident caps are growing in use,” said Vitello. “These caps allow a nurse or technician to determine if a syringe has been opened and used; if not, that syringe can be recycled for use, providing additional cost savings.”
 
ACA regulations are also changing the way in which hospitals and buying groups are working with manufacturers. “There is definite pressure on price,” said Vitello, adding that some companies are exploring the option of going straight to manufacturers instead of through the regular distribution network.
 
“While our audience remains the same, there is definitely a challenge as a manufacturer as to how we manage the channel,” added IMI Director of Marketing Bryan McGurn. “Our distributors are extraordinarily valuable partners and we don’t want to compromise those relationships. But we do see a need to take the lead in promoting our products and making ourselves more visible, which will also help with their marketing and sales initiatives. Outside of that, we’re also looking at extending beyond borders to other health markets outside the U.S.”
 
One of the major challenges facing medical equipment suppliers and manufacturers is the medical device tax, which helps to fund the Affordable Care Act. This 2.3 percent tax is applied to the gross sale of every medical device. “When I sell a medical device that is innovative, reduces costs and improves the efficacy of treatment, I now have to add 2.3 percent tax to that sale,” said Vitello. “This tax is very painful and cuts into the research and development budget as well as our headcount—it makes it very difficult to run a business.”
 
The result of this tax, according to Vitello, is that companies will have to lay off employees and the market will also see fewer new products coming out in the future. “Stryker has announced a plan to lay off 5 percent of its workforce,” he said. “There is overwhelming support to repeal this tax, but ‘politics’ have not allowed it to happen. It is a very bad trend in the industry.”
 
Having weathered 44 years in the ever-evolving medical field, IMI is confident that it will adapt to whatever changes come. In the meantime, however, they are focusing on an issue closer to home—creating ways to better serve the south Florida population. “There is so much need for the products we provide, and we haven’t really penetrated our own ‘backyard’ as well as we’d like,” said McGurn. “One of our goals in 2014 is to focus on the hospitals and pharmacies in this area and make sure that we are meeting their needs.”

To learn more, visit International Medical Industries at www.imiweb.com or call 800-344-2554.

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