Product quality is a critical element that supports our mission at Spectrum Health: to improve the health of the communities we serve. However, we receive hundreds of recalls from manufacturers every year which require investigation and internal actions beyond expected daily activity. It is extremely costly for a health system to conduct the initial risk triage, research where products were shipped/used within our system, sort through and quarantine inventory, validate alternatives, communicate across the system, return product and administer the overall program. As pressure continues to build to keep health care costs manageable, Spectrum Health cannot continue to absorb the downstream expense caused by the previously mentioned containment activities.
Spectrum Health has implemented a Supplier Quality Notification (SQN) program to recover our administrative costs associated with either supplier recalls of medical supplies, devices, equipment and pharmaceuticals purchased by Spectrum Health or internally identified quality issue(s) found to be supplier cause. The following classifications serve as a guideline to illustrate potential cost recovery that may be sought by Spectrum Health using the FDA classification scheme and will depend on the scope of containment action encountered per event:
- Class I: Dangerous or defective products that predictably could cause serious health problems or death - approximately $13,000 -$25,000 administrative cost recovery fee.
- Class II: Products that might cause a temporary health problem, or pose only a slight threat of a serious nature - approximately $8,000 – $12,000 administrative cost recovery fee.
- Class III: Products that are unlikely to cause any adverse health reaction, but that violate FDA labeling or manufacturing laws - approximately $1,000 - $7,000 administrative cost recovery fee.
In the event that we incur disproportionate costs in addressing a particular recall, Spectrum Health may issue additional charges to cover our costs.
We’re confident that your organization shares our belief and expectation that it is in all of our best interest to proactively prevent quality problems from occurring in the first place. It’s the right thing to do for patient health and to manage health care costs in an economically sustainable manner. We thank you in advance for ensuring that your products are of the highest quality level. If you have any questions regarding this SQN program, please refer to the FAQ page.