Originally Published MPMN September 2005

INDUSTRY NEWS

Recycling Program Optimizes the Investment in Surgical Instruments

Susan Shepard

An international recycling program collects, tracks, and redistributes orthopedic instrument kits. The program, created by Millstone Medical Outsourcing (Fall River, MA; www.millstonemedical. com) provides OEMs with visibility into their available inventory, an effective way to redeploy instruments in time for scheduled surgeries.

Surgical instruments have long been a costly burden for orthopedic OEMs because hospitals typically only pay for the implants used in a procedure. OEMs are required to provide the necessary tools, which means managing thousands of instrument kits nationwide for multiple product lines. According to Millstone Medical, this year alone many OEMs of orthopedic and spine products will spend more than $50 million each on instrumentation.

As new items enter the market, instruments are commonly misplaced and discarded, leaving millions of dollars of idle inventory scattered across the country.

Recycling lets OEMs deploy already-manufactured instruments much more effectively and turns a potentially marginal market into a highly profitable one. "With recycling, OEMs can provide the instruments that clients need, at 10% of the cost," says Shannon Tillman, president of Millstone Medical Outsourcing. "It’s a great service, at a great price, with substantial return on investment for our clients."

Tillman continues, "And it solves a problem that has been undermining performance in the medical equipment industry for decades: how to better optimize the required investment in surgical instrumentation."

Millstone Medical currently recycles surgical instruments for two orthopedic OEMs. By the end of this year, the company will have redeployed as many as 20,000 surgical instruments for just one of its customers, saving the client at least $3.6 million in less than six months. Companies with 100 surgical sets can save upwards of $9 million annually, since each set may contain 500 or more instruments, valued at approximately $200 each.

The recycling program gives orthopedic OEMs access to a secure Web site that lets field agents fulfill sales in as little as 12 hours with recycled instruments. By handling the cleaning, sorting, inspecting, repackaging, warehousing, online-system management, and redistributing of acceptable devices on behalf of the OEM, Millstone lets manufacturers focus on their core business of creating new products and developing new markets.

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