Medical Device Company Tells Hospitals They're No Longer Allowed to Fix Machine That Costs Six Figures

Hey there,

Here's a story that begins to scratch the surface on why medical costs continue to skyrocket in the United States. Hospitals have entire staffs of trained repair technicians whose job is to repair a hospital's medical devices when they break. But manufacturers are increasingly forcing hospitals into first-party repair contracts, which means a hospital's own staff are often prevented from repairing devices that they had long been able to fix.

-Jason

The manufacturer of a machine that costs six figures used during heart surgery has told hospitals that it will no longer allow hospitals’ repair technicians to maintain or fix the devices and that all repairs must now be done by the manufacturer itself, according to a letter obtained by 404 Media. The change will require hospitals to enter into repair contracts with the manufacturer, which will ultimately drive up medical costs, a person familiar with the devices said. 

The company, Terumo Cardiovascular, makes a device called the Advanced Perfusion System 1 Heart Lung Machine, which is used to reroute blood during open-heart surgeries and essentially keeps a patient alive during the surgery. Last month, the company sent hospitals a letter alerting them to the “discontinuation of certification classes,” meaning it “will no longer offer certification classes for the repair and/or preventative maintenance of the System 1 and its components.” 

This segment is a paid ad. If you’re interested in advertising, let's talk.

Stop Robocalls, Spam Emails, Stalkers, Frauds, and More.

Every day, data brokers profit from your sensitive info—phone number, DOB, SSN—selling it to the highest bidder. And who's buying it? Best case: companies target you with ads. Worst case: scammers and identity thieves. Try Incogni—not only does it delete your personal data from the web, but it also removes your info from sites used for stalking.

Don't wait! Use code INCOGNI404 today to get an exclusive 55% discount.

This means it will no longer teach hospital repair techs how to maintain and fix the devices, and will no longer certify in-house hospital repair technicians. Instead, the company “will continue to provide direct servicing for the System 1 and its components.” 

On the surface, this may sound like a reasonable change, but it is one that is emblematic of a larger trend in hospitals. Medical device manufacturers are increasingly trying to prevent hospitals' own in-house staff from maintaining and repairing broken equipment, even when they are entirely qualified to do so. And in some cases, technicians who know how to repair specific devices are being prevented from doing so because manufacturers are revoking certifications or refusing to provide ongoing training that they once offered. Terumo certifications usually last for two years. It told hospitals that “your current certification will remain valid through its expiration date but will not be renewed once it expires.”

Hospitals are increasingly being pushed into signing maintenance contracts directly with the manufacturers of medical equipment, which means that repair technicians employed by hospitals can no longer work on many devices and hospitals end up having to employ both their own repair techs and keep up maintenance contracts with device manufacturers. 

“One of my fears is that if a device goes down, we’re going to be subject to their field engineers’ availability,” a source who works in hospital medical device repair told 404 Media. 404 Media agreed to keep the source anonymous because they were not authorized by their hospital to speak to the media. “They may not be able to get here that same day or the next day, and if you’ve got people waiting to get an open-heart surgery, you have to tell them ‘Oh, the machine’s down, we’re going to have to postpone this.’ That’s detrimental to a patient who has a life-altering, very serious thing that they’re having to cancel and reschedule.” 

Having to rely on a manufacturer’s repair network is the exact situation that farmers have found themselves in with John Deere tractors. Last week, the Federal Trade Commission sued John Deere for its monopolistic repair practices. The FTC specifically cited the fact that farmers have often been forced to wait days or weeks to get a John Deere “authorized” repair tech out to fix their tractors, which has resulted in farmers losing crops at critical harvest times. During the peak of the COVID-19 pandemic, some hospitals found themselves pirating repair software from Poland to repair broken ventilators because manufacturers’ repair technicians were spread so thin that hospitals had to wait weeks for repairs. 

This specific ventilator repair crisis during COVID led experts at Harvard Medical School to write that “For years, manufacturers have curtailed the ability of hospitals to independently repair and maintain medical equipment by preventing access to the necessary knowledge, software, tools, and parts” in a piece calling for right-to-repair legislation. The FTC, meanwhile, suggested in a report that medical device manufacturers sometimes charge two-to-three times what an independent repair tech would charge for the same repair. 

“It's scary to think that you could buy a piece of medical equipment for your hospital, just to have the manufacturer wake up one day and decide they will monopolize all repairs for that product,” Nathan Proctor, senior director of consumer rights group PIRG’s campaign for the right to repair, told 404 Media. “The people who are trained to fix that equipment won't suddenly forget all they know, but they will suddenly be restricted from doing the repairs. I think that's just absurd.”

Manufacturer contracts like this lead, across the board, to higher costs for hospitals. 

“It’s no secret that America’s healthcare system is the most expensive, and this is one of the reasons why. These machines are actually highly reliable, we’ve had a low cost of service for it over the last few years. And when something isn’t right, we have people in-house who can fix it,” the source familiar with Terumo machine repair said. “But the cost of having a service contract with a manufacturer, you’re probably talking 10 times the cost. It’s not a big deal having a contract for one device, but when that starts happening across many devices, it adds up in the end. If you took every hospital in America and said for every medical device in the hospital, you need to put it on an OEM [original equipment manufacturer] maintenance contract, it would tank your financial system. You just can’t do that.”

Medical equipment manufacturers have strongly lobbied against right to repair legislation all over the country, and have been successful in getting medical devices exempted from right to repair legislation by claiming that the machines are too sensitive and complex to be repaired by anyone besides the manufacturer. The medical device giant AdvaMed, for example, says “the risk to patient safety is too high.” 

But, again, the people working on medical equipment in hospitals are often hospital employees or contractors whose job is to repair medical equipment, and who are being prevented from fixing equipment that a hospital has purchased. “Just because a guy has Terumo on his shirt doesn’t mean he’s a more competent technician” than an in-house hospital technician, the source familiar with Terumo device repair said.

In a brochure for hospitals, Terumo advertises both its device and its maintenance program: “Advanced, precision medical equipment requires genuine parts and top-quality, specialized service – just as getting the best medical care from qualified specialists. Terumo Cardiovascular Service has the unrivaled expertise, experience, equipment, and parts to provide the optimal level of planned service and repairs needed. Use Terumo Cardiovascular Service and avoid exposure to liability issues.” 

A spokesperson for Terumo told 404 Media that the company “saw declining participation in this program and determined that the best way forward was to require servicing through Terumo Cardiovascular’s genuine in-house Service team to continue to ensure Terumo devices are properly maintained.”

“Terumo Cardiovascular’s Biomed Certification Program was originally structured to train non-Terumo personnel (hospital Biomeds) to service Terumo heart-lung machines and associated hardware. Properly maintained medical devices are necessary for optimal performance which is essential for quality of patient care and outcomes,” they added. “Hospitals’ existing Terumo Cardiovascular Biomed certifications will remain valid through their expiration dates but will not be renewed once they expire.”