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Hospital Healthcare Europe
Hospital Healthcare Europe

To outsource or not to outsource? That is the question …

Jean-Marie Kaiser
1 July, 2006  

Jean-Marie Kaiser
Sterilisatioan unit
Pitié Salpêtrière Hopsital

Is it necessary to sterilise all medical devices in-house, or can it be outsourced to a public or private company? There are two possibilities open to those who wish to proceed with outsourcing: either centralise sterilisation services between several care establishments by giving one control over sterilisation procedures (or create a special structure dedicated to this), or approach a manufacturer who is able to offer a specialist service.

It should be noted that this subject is better tackled from a technical and strategic perspective given that the conditions imposed by law remain, despite some European harmonisation, relatively different from one country to another. The fact that the question regarding outsourcing is being asked shows that the market for it already exists and choosing this option no longer depends on local or national strategic analyses. The decision to outsource is, nevertheless, an extremely important one because it means the hospital giving up its ability to respond to its own needs.

The objectives of outsourcing
There are eight questions relating to the technical objectives of outsourcing:

1. Cost reduction
Measuring the actual costs brought about by hospital sterilisation is the first obstacle that must be overcome when analysing the outsourcing question, as there are several hidden costs in sterilisation activities. There are methods that can be used to calculate the real costs, but costing out an external service must be done with precision. Generally, the proposed cost relates to an estimated volume and does not include a complementary service that can account for the individual needs of a particular hospital. It is these extra services that can dramatically increase the costs.

If, however, outsourcing is calculated to reduce costs then the gains will be made in relation to the actual investment rather than the operation. However, costs can only be compared for identical services, which is very difficult. In any event, the chosen service must have the necessary comparable level of certification (ISO 9001), and quality indicators should be monitored to ensure the costs reflect the required levels of performance.

2. Adapting to changes in volumes and timeframes
Where outsourcing occurs between a hospital and a manufacturer who serves more than one hospital, it is easy to imagine that the peaks in activity will be better absorbed by the manufacturer than the hospital. The larger the installation, the easier it will be to manage any fluctuations. However, workload management already exists in hospitals since one single sterilisation unit can treat up to 40 operating theatres, absorbing those peaks of activity that occur at different times in all the theatres.

How one adapts to these fluctuations in workload volume will depend on the capacity of the installation/number of clients and not on whether work is outsourced or not. The variations in required turnaround times are difficult to evaluate. If a hospital asks for a quick turnaround that is not covered in the contract, they will be billed for the extra cost of this quicker turnaround. For in-house sterilisations where a quick turnaround is required, a solution will be brought in that incurs costs that are supported by the hospital (eg, using undercapacity equipment, moving staff from other jobs, not sticking to procedures).

3. Maintaining skills at a high level
With intrahospital quality systems, sterilisation staff should only use a team to carry out a given task that has the necessary skills. A compulsory training programme and preliminary evaluation must therefore exist at every stage of the sterilisation process. The experiences of several countries show that while this objective is common, it is not always achieved.

With outsourcing companies, hospitals must check on the qualifications of the staff who will carry out the work as noted in the contract. Currently, there are no skill referentials for sterilisation and there is no sterilisation “school”. Sterilisation staff come from many different backgrounds (eg, factory workers, technicians, carers) and their level of quality is therefore variable.

4. Workforce management
The capacity of an organisation to adjust its workforce to its production needs depends on law and the status of its staff. If the outsourcer has a high client turnover it is probable that it will adjust its workforce by hiring or making redundancies as much as possible. If a hospital sees that its sterilisation needs change significantly then it can change its staff allocation in this regard. It is likely that outsourcing will not change how hospital staff are managed – except for reducing the number of staff who treat medical devices.

However, it is important not to forget that outsourcing is not a panacea; when a surgical intervention has been completed there are contaminated materials in the operating room (OR). A qualified person must be on hand to clean up the OR and move these materials to the dedicated areas for disposal.

Reusable medical devices should be placed in containers destined either for transportation or immersed for predisinfection before transportation (this is a practice required in France but not, for example, in the Netherlands). After the devices are transported and regrouped, their service history is documented before they are collected. The reception, control and verification of the now sterile instruments must be arranged along with the supporting documents, where outsourcing is involved. All these stages require staff that have special training. Staff management cannot therefore return to an all-or-nothing system, whether or not outsourcing is adopted.

5. Choosing a specialist outsourcing company
Outsourcing companies should be able to respond to all sorts of individual needs, such as sterilising thermosensitive material at low temperatures, or undertaking an establishment’s sterilisation procedures when their unit is closed for building works or when there is a breakdown. In practice, however, this theory does not work as the development of industrial installations can only happen in relation to the needs that are known and sufficiently constant to make the installation more profitable. In addition, the process must be defined in advance so it is very difficult to respond to unexpected needs.

When new sterilisation technologies appear, but are too expensive for hospitals to buy, this method could be useful. An example of the difficulties faced with outsourcing is that the types of instruments treated in the hospital are different, which is unlike industrial production. Medical instruments used to be outsourced for sterilisation by ethylene oxide, but that was unable to be carried out to EN ISO 14937 standards, which require each stage to be validated and necessitates batches of homogenous and reproducible instruments. This also brought about considerable extra costs for each validation. Finally, it is likely that the outsourcing company’s proposal will not be able to answer the needs within the hospital.

6. The best capacity for innovation?
If new techniques do appear, is a hospital’s capacity to adapt different from that of an outsourcing company? There is not an easy answer to this question, as both will move onto new technologies in relation to the expected performances and their strategies.

7. Reducing investments
This is one of the major motivations when choosing to outsource. Reducing investments will equally reduce debts/depreciation and reduce the capacity to renew equipment/systems. Estimating the value of this criteria depends on the establishment’s financial situation and the type of treatment methods/care plans that are in place in the country and the individual establishment. The advantage of giving priority to equipment or servicing costs is different in every country, timescale and economic situation.

8. The concentration of equipment and staff
When several hospitals regroup their sterilisation activities together, mastering quality systems (eg, maintaining equipments, training staff, rationalising production) can be simplified as long as the management is efficient. The guarantees that must be built into this are those related to breakdowns (eg, emergency sprinkler systems) as any break in activity can have serious consequences for patients. By taking such security precautions, regrouping can lead to economies of scale and improvements in quality. Unfortunately, there is no study that looks at the critical size of sterilisation installations above which the process becomes unmanageable. Nevertheless, it is certain that the treatment of sterile medical instruments cannot be a large-scale activity, but one that should identify precisely the needs of each client, each surgical discipline and each type of intervention to bring an adapted performance/ service and take into account nonconformity. Sterilisation staff must have a good knowledge of each medical instrument to master its cleaning, dismantling, working order and reconditioning. In certain cases, if a device is put back together incorrectly, it can be fatal when used in surgery.
In conclusion, this technical analysis shows that, despite an increase in scale, sterilising reusable medical devices remains closer to handcrafted, rather than industrial, production.

Strategic perspective
How care is organised will depend on an analysis of the establishment’s local context by integrating tasks and patients, deciding how critical the care is (whether there are emergency services or operating areas that can be used in an emergency), the density and diversity of establishments in the region, and whether or not they have the same functions and disciplines.

One mistake that is frequently made in strategically analysing sterilisation procedures is to confuse those activities that help in the care process and those that are not directly concerned. With these latter activities (eg, bedding, food, cleaning, clothing), the hospital is free to choose whatever means it feels will suit it best. If there is a problem with one of these then there will always be time to change the way it is done, without serious consequences.

The activities that are vital to patient care are those relating to diagnostics, treatment, support and food necessary for keeping a body healthy or alive. None of these can be considered secondary. Equally, sterilistion is a service that is dedicated to care. It concerns several sterile medical devices that must be available at the precise moment of need, and cannot be substituted for a default replacement.

A “needs planning” strategy is possible, but it must include levels of security that increase in relation to the distance and the risks associated with the stages of the process. In other words, when a process is outsourced, new risks are encountered that do not conform to the needs. For example, the stock of surgical instruments increases and adapts in relation to the number being treated or used at any one time, but more time must be added into a strategy to account for delays or sharp increases in patient numbers.

A strategic decision should integrate the dependence level created by outsourcing; if an outsourcing company fails, there is not sufficient time to rebuild a hospital’s sterilisation unit. Where does sterilisation take place – are there other services capable of picking up the slack? Legally, is there service continuity even if a service is having difficulties? And what happens if shareholders decide it is no longer profitable?

The economic perspective of outsourcing versus intrahospital sterilisation has already been mentioned, and the corresponding financial strategy will turn towards operating costs or investments. Outsourcing can cost more than expected if certain noninclusive services are needed. On the other hand, there are no hidden costs, unlike in intrahospital sterilisation, which often has many.

If sterilisation costs are to be kept under control then it is necessary to analyse very closely the needs and assess whether certain reusable articles can be replaced by single-use ones. One last aspect of economic strategy concerns long-term costs. In terms of outsourcing, it is desirable that competition exists so you are not tied to one provider if costs increase.

Methods of outsourcing
Once a decision has been taken, the establishment should outsource while respecting the following security principles :

  • Do not abandon any skills. Keep some skills internally in order to evaluate the quality of the new service.
  • Plan for every type and size of service required in the contract.
  • Plan for breakdowns and have a solution in place.
  • Settle conflicts: loss, breakages or replacement of instruments.
  • Have provider continuity in case of a dispute.
  • Get authorisation to give orders to the provider’s auditor and to get access to their installations and documents (ensure the audit’s terms of reference are in the contract).
  • Set control levels and acceptability limits for each critical stage of the process.
  • Ensure there are methods in place to control nonconformity.

Care establishments would benefit from regularly evaluating satisfaction levels of users so that the services can be assessed when outsourcing is used, or the results between an establishment that uses outsourcing and one that keeps its services in-house can be compared. Satisfaction levels should be evaluated by surgeons as they are the direct users. As such, sterilisation procedures may be better served by being part of a continuous quality improvement procedure, whether the service is internal or external.

The sterilisation of medical devices is a sensitive activity by virtue of the fact that patients are directly affected. Healthcare staff are a key part of this process in terms of the quality of care that occurs between the patient and the doctor – and this cannot be outsourced. The decision to outsource sterilisation services directly implicates another body in the care structure, as well as economic and quality plans. Drawing up contracts, contractor consultions, validation procedures and continuous quality evaluation should all be guaranteed. Finally, the decision to know where and how to sterilise is one that must be taken by the community, ensuring that all the necessary precautions are taken to guarantee the availability instruments and the absence of nosocomial infections.

French Sterilisation