VA Medical Care Budget for FY 2000

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YEAR 2000 (Y2K) MEDICAL DEVICE ISSUES AND THEIR IMPACT ON THE DEPARTMENT OF VETERANS AFFAIRS

THURSDAY, SEPTEMBER 24, 1998
House of Representatives,
Subcommittee on Oversight and Investigations,
Committee on Veterans' Affairs,
Washington, D.C.

    The subcommittee met, pursuant to notice, at 9:34 a.m., in room 334, Cannon House Office Building, Hon. Terry Everett (chairman of the subcommittee) presiding.
    Present: Representatives Everett, Evans, Snyder, and Mascara.
    Mr. EVERETT (presiding). Good morning. The hearing will come to order. The purpose of this morning's hearing is to examine the preparations of the Department of Veterans Affairs and the Food and Drug Administration for the Year 2000, Y2K, as we call it, compliance of medical devices used for the health care of veterans.
    The basic question we want an answer to is can veterans be confident that the VA's medical equipment will work right on January 1, 2000. The answer to this very serious question is the same for the general public as it is for veterans.
    This is the subcommittee's third hearing on Y2K issues. The last hearing was one year ago on September 25, 1997, also with GAO, VA, and FDA witnesses. I first publicly raised this medical equipment Y2K compliance issue at that hearing, and this hearing is to follow up on the specific issues and review progress.
    As one of the largest health care systems in the country and the largest Federal system, the VA is one of the largest users of medical equipment, about $3 billion worth at 711 facilities. Obviously, the VA uses much of the same medical equipment for treating veterans that other public and private hospitals, clinics, and doctors' offices use for treating every American.

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    This subcommittee has been concerned for more about a year about the Y2K question relating to the VA's medical equipment. Because of our concern, in July 1997 I asked the General Accounting Office to do a careful study of the VA's health care delivery systems and Y2K. I asked GAO to include the Food and Drug Administration in the study because the FDA regulates the manufacturers of medical devices, including those used by the VA. Today, I am releasing the report, ''Year 2000 Computing Crisis: Compliance Status of Many Biomedical Equipment Items Still Unknown.'' The title of this report tells us what it has found. (See p. 33.)
    With only 464 days left until January 1, 2000, I find this information profoundly unsettling. We are running out of time to identify the medical equipment manufacturers who have produced equipment that has Y2K problems and get the critical equipment fixed or get it out of service. Some of these manufacturers are out of business. This is a very complex picture, because of the large number of and many kinds of medical devices in use.
    We are confronted with a major public safety issue. It can't be left to chance or the hope that everyone will do the right thing. Of the thousands and thousands of medical devices out there, it only takes one critical noncompliant device to cause injury or perhaps even death. We can't tell veterans and the public, ''Don't worry, you and your family can sue.''
    The VA and the FDA's jobs are to enforce or ensure safe health care for veterans and the public. We don't want to know if they are going to do it; we want to know how and when. Nothing less is acceptable. The objective should be coming as close as humanly possible to 100 percent certainty on the critical medical issue of compliance.
    This morning, the first scheduled witness is our distinguished colleague, Senator Charles Grassley who has just been notified that they have back-to-back votes over in the Senate, and he is going to submit his comments for the record. I urge all here today to read those comments. They are very, very good. They are short, but very much to the point.

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    [The statement of Senator Grassley appears on p. 79.]

    Mr. EVERETT. In addition to that, we have representatives of GAO, the VA, and FDA, and the Health Industry Manufacturers Association. I appreciate the cooperation of all to discuss this serious topic. They are all here voluntarily, and I welcome them.
    Mr. Clyburn hasn't arrived yet, but I would recognize Mr. Mascara.
    Mr. MASCARA. Thank you, Mr. Chairman. I would ask unanimous consent that the Washington Post article be placed into the record.
    Mr. EVERETT. Without objection.
    [The information follows:]



Offset folio 1 insert here

Makes p. 3

    Mr. MASCARA. And I also ask unanimous consent that I be given the right to submit an opening statement for the record.
    Mr. EVERETT. Without objection. I was going to do it myself, but that is fine.
    Mr. MASCARA. Thank you.
    [The statement of Mr. Mascara appears on p. 88.]

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    Mr. EVERETT. Dr. Snyder, you are welcome to submit anything for the record you like.

    We will just move to panel two, and at this time I will recognize Joel Willemssen, Director of Civil Agencies Information Systems, Accounting and Information Management Division of the GAO, and ask him to introduce his panel.
    Mr. Willemssen, before you begin, I want to commend GAO's work in producing this important report on the Y2K compliance status of medical devices. The GAO has performed a valuable public service by documenting for Congress and the public the current lack of compliance information about many medical devices.
    This is a public safety issue, and I believe your report has led in this issue, even before it is released, to redoubled and more effective efforts so that these critical devices will be ready on January 1, 2000, or they will be identified as noncompliant devices and removed from service. If you will, go ahead.
STATEMENT OF JOEL WILLEMSSEN, DIRECTOR, CIVIL AGENCIES INFORMATION SYSTEMS, ACCOUNTING AND INFORMATION MANAGEMENT DIVISION, GENERAL ACCOUNTING OFFICE; ACCOMPANIED BY HELEN LEW, ASSISTANT DIRECTOR, CIVIL AGENCIES INFORMATION SYSTEMS, ACCOUNTING AND INFORMATION MANAGEMENT DIVISION, GENERAL ACCOUNTING OFFICE, AND NABAJYOTI BARKAKATI, TECHNICAL ASSISTANT DIRECTOR, OFFICE OF THE CHIEF SCIENTIST, ACCOUNTING AND INFORMATION MANAGEMENT DIVISION, GENERAL ACCOUNTING OFFICE

    Mr. WILLEMSSEN. Thank you, Mr. Chairman, Congressmen. Thank you for inviting us here today to testify on biomedical equipment and Y2K. Accompanying me are Helen Lew and Dr. Naba Barkakati. As requested, I am going to briefly summarize our statement, and in doing so, I will cover two areas. First the status of VHA's and FDA's programs, and second, our recommendations detailing what we believe needs to be done in this area.

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    As you noted, Mr. Chairman, our report is being released at your hearing today, and that provides additional details beyond our statement.
    First, regarding VHA, it has made progress in implementing its Year 2000 strategy, but it still does not know the full extent of the Year 2000 problems for its biomedical equipment. This is because it has not received compliance information from many of the manufacturers on its list of suppliers.
    For example, about 100 manufacturers from VHA's list are no longer in business. In addition, the Postal Service returned to VHA slightly over 200 letters that were marked with no forwarding addresses. Further, among the manufacturers who have yet to respond is one who supplies high dollar, high value equipment to VHA.
    Like VHA, FDA has also issued letters to manufacturers. However, the response rate to these letters has been disappointing, only about 12 percent as of July 30. In addition, according to FDA, it does not perform technical evaluations of manufacturers' responses to determine their adequacy. Rather, it reviews the responses only to determine whether all questions posed in the letters were answered.
    Further, FDA does not plan to request test results from manufacturers that have renovated medical devices. FDA's list of compliant equipment also does not contain information on the equipment's make and model. In contrast, VHA's list does contain such information. Further, the Year 2000 compliance information publicly available through FDA does not include responses from many of the manufacturers that have responded to VHA.
    Given where VHA and FDA stand, we have several recommendations to offer. Let me summarize those briefly. First, because some noncompliant equipment could pose a risk to patient safety, and because the Year 2000 compliance status of many items in VHA's inventory is not known, it is critical that VHA finalize its Year 2000 Contingency Guidebook and ensure that its medical facilities complete Year 2000 business continuity and contingency plans for equipment in their inventories.

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    Second, it is imperative that health care providers and users have access to compliance information from manufacturers so that they can take action on noncompliant equipment in their inventories.
    Therefore, we recommend that the Secretaries of VA and HHS work together in developing a single data clearinghouse that provides compliance information to everyone. Among the items that we believe should be in that clearinghouse are model-specific information, the names of manufacturers that have not responded to requests for information, the names of manufacturers that are no longer in business, and the names of those who have not provided test results certifying Y2K compliance.
    Finally, because health care providers are relying on manufacturers to validate, test, and certify that their equipment is compliant, there are no independent assurances that manufacturers have adequately addressed the Y2K problem for noncompliant equipment.
    To address this, we are recommending that the Secretaries of VA and HHS first determine what actions should be taken on those manufacturers that have not responded to requests for compliance information. Second, determine what actions are needed to address equipment produced by manufacturers no longer in business. Third, review test results for critical care and life support equipment once determined to be noncompliant, but now deemed by manufacturers to be compliant.
    And finally, determine what legislative regulatory or other changes are necessary to obtain assurance that the equipment is indeed compliant, including performing independent verification and validation activities of manufacturers' assurances.
    Mr. Chairman, that completes a summary of our statement, and we would be pleased to address any questions that you may have.
    [The prepared statement of Mr. Willemssen appears on p. 89.]

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    Mr. EVERETT. Thank you very much. Again, I think your entire report is worth everybody reading, and I hope they will take the time to do so.
    Do you consider medical device Y2K compliance to be a serious public safety issue?
    Mr. WILLEMSSEN. Yes, we do, Mr. Chairman, and in large part, it remains a critical issue because of the significant amount of unknowns that are out there. We are in a better position today than we were when you held your hearing a year ago. But as you mentioned, with the limited amount of time left, we've got a long way to go and we've got to get better knowledge on exactly where we stand, especially for those critical life-support related devices.
    Mr. EVERETT. I mentioned earlier that your report is very thorough, and it is also very disturbing in that the still-unknown Y2K compliance status of many medical devices should light a fire under government agencies and the country's health care equipment manufacturers to put their efforts on an urgent basis.
    You referred to the relatively short amount of time left. Does the GAO believe that the focus of the government's efforts should be critical medical devices, and by that, I mean the devices which would cause harm to patients and users if the date-sensitive functions do not operate properly?
    Mr. WILLEMSSEN. We would definitely go in that direction. It is very parallel and similar to the kind of message we have delivered at other agencies for their standard information systems. You have got to set priorities and focus on the most critical items. That, clearly, is the case with biomedical equipment also.
    And as we are recommending, for those items which are in the critical care life support area, we don't think it's enough just to rely on the manufacturer's assurance that everything is okay. We believe that you need to take it one step further and have some independent assurance that indeed, those critical devices are going to be okay.

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    Mr. EVERETT. And from your report, I gather the FDA knows some of these devices, but more importantly, there are others out there that they don't know about, is that correct?
    Mr. WILLEMSSEN. That is correct, Mr. Chairman.
    Mr. EVERETT. The FDA does not believe that listing all compliance products is necessary or cost-effective. I believe I read that you differed with that. What does GAO recommend?
    Mr. WILLEMSSEN. You are correct, Mr. Chairman. We do have a disagreement with FDA on that. We think, as VHA has done, listing specific make and model information for biomedical equipment is especially useful in making sure that providers and users are aware of the status of those particular items.
    It is especially important where you have situations where a company may have merged or bought out another company, with those companies making a general statement of Y2K compliance. It raises questions as to whether they have actually thoroughly checked all their devices.
    And what kind of time period are we talking about? Are they fully aware that they have dealt with everything that they have sold over a given period of time? I might point out as an analogy, what we see in many agencies as they initially went into their Y2K programs, were initial declarations that we think everything is okay, we've got it under control. As they went into further depth and detail in their programs, they found out differently.
    Therefore, statements, for example, on FDA's website that Y2K doesn't apply to us, or that there is just a general statement of compliance, I think that should give everyone cause for concern.
    Mr. EVERETT. Thank you. Mr. Mascara.
    Mr. MASCARA. Thank you, Mr. Chairman. I had to step out and there was a question here, I hope if I missed it, maybe you can repeat the answer. But your testimony briefly cites some examples of potential risks to patient safety if certain manufacturers fail to ensure that their products are not Year 2000 compliant.

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    Can you give me some examples?
    Mr. WILLEMSSEN. The risks really vary quite a bit. If you look at lower level risk, you could have a situation where the date is printing out as 00, and the medical provider would know right away that that is just a nuisance issue. You could have another situation where the date would be in a series of dates and may be ordered or arrayed chronologically, and if the medical provider didn't look at that carefully, they may misread that.
    And then taken to a greater extreme, you could have calculations that are actually part of providing care to the patient. For example, one that has been identified is a radiation-related device that calculates dosage based in part on the age of patients. If that age is wrong, then you might get a wrong dosage.
    So there really is a range of potential impacts here.
    Mr. MASCARA. Thank you. Thank you, Mr. Chairman.
    Mr. EVERETT. I know our next speaker has a professional, as well as a legislative interest, in it. Dr. Snyder.
    Dr. SNYDER. Thank you, Mr. Chairman. Actually, Mr. Chairman, I found out a couple of days ago I passed my Family Medicine Boards that I have to take every seven years. I had to take them back in July. So I can still call myself a family doctor.
    Mr. EVERETT. Congratulations.
    Dr. SNYDER. Thank you. I just had one question. I noticed Dr. Kizer is on the witness list and is in the audience. The title of our hearing is the Hearing on Y2K Medical Device Issues and their Impact on the Department of Veterans Affairs.
    From your perspective as you have looked at this issue, is there anything inherently different in the challenges facing Dr. Kizer versus a head of a hospital, say, a private hospital chain or a hospital in a town, or even the challenge facing a practitioner that prescribes and uses some of these devices.

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    Mr. WILLEMSSEN. In giving you an answer from a lay perspective, I don't think the challenge in terms of the questions that need to be pursued, varies dramatically. In fact, that is one of the reasons that we want to push for a single clearinghouse nationwide.
    I have been with Chairman Horn at a series of field hearings and one of the issues that has come up is in the health area. One of the unfortunate things you hear is that all the different providers or major health facilities are trying to reinvent the wheel and collect information from manufacturers, what we see VHA and FDA doing. So it is not the most efficient process that we have.
    We need to make it clear and publicize that we have one single clearinghouse that everybody can access, and it will have as rich and comprehensive information as possible, so that all these separate efforts don't have to go on. I can imagine the manufacturers certainly don't want to get all these letters repeatedly from different organizations asking for the same information.
    Dr. SNYDER. I suppose the response, in terms of the need for a clearinghouse like you are talking about, we have some hospitals in Arkansas as there are all across the country, very small hospitals that still face the same challenge. Obviously, they are going to have to rely on somebody. They are not going to be able to evaluate all this themselves.
    Mr. WILLEMSSEN. That's right and that's why it's critical that the word get out to those kind of hospitals: here's where you can go to get the information you need. Now, given that VHA and HHS have concurred with our recommendation to establish a single clearinghouse, we'd like to see when they are going to actually put it up and what it is going to contain. And we need to get that going as quickly as possible.
    Dr. SNYDER. And obviously, there is liability concerns here, not only for the manufacturers of the products, but also for those of us who may prescribe or use these products. In terms of looking at the impact or potential liability concerns, if something goes awry when the Year 2000 kicks in, have those concerns—in your opinion, are they helping the process or hurting the process of coming to a resolution? Or do you have an opinion?

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    Mr. WILLEMSSEN. My nonlegal view of that is, for the most part, they have impaired the free exchange of information, not only in the biomedical equipment area, but all the other areas where we have been doing Y2K work.
    Dr. SNYDER. Give me some examples of that, if you would.
    Mr. WILLEMSSEN. Well, there would be a concern, for example, if a manufacturer tells FDA that, well, all of our products are Y2K compliant. When January 1, 2000 hits, one isn't compliant, and it has a significant impact on patient safety. Company x said it was compliant. Obviously, whatever the legal term is, negligent or whatever the case, you did not state the exact nature of the status of that device. Those are among the concerns that might arise.
    Dr. SNYDER. Thank you, Mr. Chairman.
    Mr. EVERETT. Thank you. Did your report request that VA and HHS create a Year 2000 biomedical equipment clearinghouse?
    Mr. WILLEMSSEN. Yes, we did make that recommendation, and I understand that VA and FDA plan to do that.
    Mr. EVERETT. I have a release here in my hand where they have done that now. Thank you very much for your testimony.
    Mr. WILLEMSSEN. Thank you, Mr. Chairman. Thank you, Congressmen.
    Mr. EVERETT. Now I would like to recognize Dr. Kizer, the Under Secretary for Health, Department of Veterans Affairs.
    Dr. Kizer, before I ask you to introduce your colleagues, let me just say that you have a tough time running and modernizing the VA and I, for one, appreciate your efforts that you have made, and the association we have had and your willingness to cooperate with this committee. We may not always agree on everything, but I certainly appreciate the job that you are doing.

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    I want to say, however, that often the focus of some of our hearings are on what's gone wrong and not what's gone right. With the Y2K compliance of medical devices, clearly, the VA has been out front, setting the example for the rest of the health care arena. In part, the VA has been doing a job it shouldn't have needed to do, because it wasn't VA's primary responsibility to find out what devices were going to be compliant.
    But to protect veterans, under your leadership, the VA has compiled the best data base in existence on the subject. I shudder to think where this would be if the VA weren't a large department with the resources and expertise to have accomplished that task.
    However, the job isn't finished. But I do want to say that I highly commend the VA for the efforts it has made and the progress that you have thus far. After that endorsement, I know that you won't let veterans down, that you will make sure we will get there on time.
STATEMENT OF KENNETH W. KIZER, UNDER SECRETARY FOR HEALTH, DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY LEONARD BOURGET, YEAR 2000 PROJECT MANAGER, VETERANS HEALTH ADMINISTRATION, DEPARTMENT OF VETERANS AFFAIRS, AND STEVEN WEXLER, CHIEF BIOMEDICAL ENGINEER, VETERANS HEALTH ADMINISTRATION, DEPARTMENT OF VETERANS AFFAIRS

    Dr. KIZER. Thank you, Mr. Chairman. Your kind words are very much appreciated.
    Let me introduce the two gentlemen with me at the table. On my right is Mr. Len Bourget, the Y2K Project Manager for VHA. On my left is Mr. Steve Wexler, the Chief Biomedical Engineer for VHA.
    I appreciate this opportunity to testify before the committee, and especially with regard to biomedical equipment and medical devices. I would underscore that we share the committee's, the chairman's, and the Congress' concern about this matter.

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    I have included in my written testimony much more detail about many of the things that VA is doing in this regard and the things that we will comment about this morning, and I would ask that that be included in the record.
    Mr. EVERETT. Without objection.
    Dr. KIZER. As a preface to my further comments, I must say that it is somewhat ironic that advanced technology, which is the basis for so many of the wonders of modern health care, now presents potential hazards to patient care when the 21st century begins.
    The committee is very familiar with the genesis of the Y2K problem, so I am not going to comment on that aspect of the issue.
    As has already been commented upon this morning, there are thousands of medical devices that may be affected by one or more of the Y2K-related problems presented by this technology. While many of the problems that have been identified to date are relatively minor and can be fixed, I would underscore some of the comments made already this morning that emphasized that the critical problem we face today is that too many health care institutions across the country simply are not positioned to accomplish those repairs, and in too many cases, simply don't know the extent of the problem they may have.
    We have been working on this problem since 1996. Many of the details are in my written testimony. With regard to biomedical equipment, as I believe you know, we identified about 1,600 manufacturers that we have done business with over the past years out of the universe of approximately 16,000 manufacturers of medical devices and goods.
    I think we are typical of many institutions in American health care systems in that a typical hospital has some 7,000 to 8,000 different devices or pieces of equipment. These have been purchased over the last 20 or 30 years. Much of the equipment, at least that which has been purchased in recent years, is not subject to this problem, but older equipment that may still be very workable and that is being used, is subject to a Y2K problem.

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    Of the 1,600 manufacturers that we have contacted over the last two years, I can report to you at this time that 728 of those manufacturers have certified to us that their products are Y2K compliant, and at least, per the manufacturer's report, there should not be any problem with these products, although I would hasten to add that we will be doing some testing to verify compliance to ourselves.
    Sixty-five manufacturers have reported that their devices are not compliant and that they will no longer be supported by the manufacturers, that their equipment or device is considered obsolete and won't be fixed, even though many of these devices are actually functional and commonly used.
    There are 130 manufacturers who reported models that are currently not compliant, but that they anticipate making compliant. These manufacturers intend to repair or fix the problem, although one of the concerns that we have at this point is that we don't know exactly how they intend to do that or what the specific nature of the problem is that has to be fixed.
    I would also note in this regard that the way the fix will be accomplished varies widely across the industry. In some cases, manufacturers will come to the facility and repair the device; for others we have to send the device back to the company to be repaired. In some cases manufacturers will charge for the repairs; in others they won't. The nature of how the fix will be accomplished varies widely.
    Forty-six manufacturers have reported that they are still doing their analysis on their products and, at this time, cannot tell us whether their products will be compliant or not. As the GAO testified, we have not been able to contact over 200 manufacturers—222 to be precise—despite having attempted contact at least four times. At this point, as part of our contingency planning, we are assuming we are probably not going to be able to get information from them and will have to make specific plans to deal with those pieces of equipment.

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    We know over 100 manufacturers have either gone out of business or have merged or otherwise are no longer the entity that produced the piece of equipment in the first place.
    And then finally, we have just a little over 100 manufacturers that have not responded to us, despite our multiple requests.
    Overall, at this time, we know that we have more than 1,000 models of devices that are not Y2K compliant, and approximately 20 percent of these will not be made compliant by the manufacturer. We still, as I say, have a problem with getting responses from quite a number of manufacturers.
    In response to questions that were raised earlier this morning, as far as VHA experience relative to the rest of the health care industry, it is worthwhile to keep in mind the size of customer that we are and the fact that good business practices would suggest that manufacturers would be compliant or responsive to an entity that purchases as much equipment as we do. We believe the only difference between manufacturers response to VA and the rest of the health care industry is that there may not be as much incentive to respond to small hospitals or individual practitioners as there are to large systems like VA.
    Let me just conclude these opening comments by addressing two points that were made in the prior testimony. A comment was made about our contingency book. I would note that it has been promulgated and is currently in the channels of distribution of the VA system.
    Secondly, as the chairman commented very briefly, and as I believe you know, a few months ago, VA joined with the American Medical Association, the American Hospital Association and several other entities of the National Patient Safety Partnership calling for a single national clearinghouse where information on these medical devices would be available. I should note that we have now reached agreement with FDA on this matter and the nature of the information that will be provided on the clearinghouse.

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    Quite simply, and I think I can speak for the other member organizations of the National Patient Safety Partnership in this regard, the idea is that both professional organizations and facility or system management should have access to this information; we also think that individual practitioners, whether it's a nurse in the intensive care unit or the physician or the technician using the EKG machine, should be able to access the Internet, look for the specific piece of equipment they are using, and assure themselves that indeed what they are using is compliant, or if it is not, what may be done to correct the problem.
    With those comments, I will be happy to respond to your questions.
    [The prepared statement of Dr. Kizer appears on p. 103.]

    Mr. EVERETT. Thank you very much, Dr. Kizer. We are joined by our distinguished ranking member of the full committee and former chairman of this subcommittee, Lane Evans. Do you consider medical device Y2K compliance to be a serious public safety issue, not just a VA issue?
    Dr. KIZER. I do, and let me just amplify on that a little bit. While the absolute proportion, or percent, of equipment that may be affected may be very small, or even tiny, I think that this figure may be misleading. When you consider the number of patients that are treated on any given day in this country—probably four million individuals will be treated in hospitals, clinics, nursing homes, et cetera, every day, in addition to those treated in the home setting—and when you consider the fact that those patients may have anywhere from a handful to several hundred interactions with information systems, devices, or biomedical equipment, and then when you do the math, you will see the numbers become huge.
    So even if it is a very tiny percentage of devices that are affected, the potential for harm, I think, is very real.
    Mr. EVERETT. I read that in your statement. I was astonished. I had never thought about the interaction that would take place on just one patient. I think about 3.8 or 4 million patients a day are using health care services.

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    If I understand your testimony on page three correctly, some medical equipment Y2K malfunctions could have potentially dangerous consequences. Would you please elaborate on those dangerous consequences.
    Dr. KIZER. In a couple of ways. For example, we did bring some devices with us. The committee staff had asked if we would bring some with us to exemplify this, and one device that brings that point to mind is the monitor like the one that we have here which is used in a critical care setting.
    The software is such that come the Year 2000, the alarm may not sound when a patient develops a serious arrhythmia. And in the typical intensive care unit setting, the nursing staff and other staff rely on both the visual cues (i.e., looking at the monitor) as well as auditory cues, because they are often doing lots of things at the same time. Conceivably, if they are busy doing other things and the alarm does not sound, then one might miss the fact that the patient has developed a potentially life-threatening arrhythmia, such as ventricular fibrillation or ventricular tachycardia which, if not treated, literally within seconds or a minute or so, could have a fatal outcome.
    Likewise, in a somewhat different scenario, a defibrillator like the one we have brought with us may simply print the date incorrectly on the rhythm strip that comes out of the machine. But if you are trying to decide what medication that you gave at a certain point in time and match it with the rhythm to see what the response to the drug was in an effort to determine the most effective drug to give the patient in one of these life-threatening situations, if you have the wrong date printed on it, then the physician may come to the wrong conclusion as far as what was effective in stopping the arrhythmia or what's being done. That could potentially lead to a serious adverse outcome.
    Also, just as one last example, the GAO already commented on the radiation devices in which dates are critical to calculating dose because these materials decay over time and you need to know exactly the decay and the age of the patient, et cetera, to factor the right dose. If that information is computed incorrectly, then you may end up giving within an inadequate dose or one that is too large, both of which could have deleterious effects for the patient.

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    Mr. EVERETT. Does the VA health care system have significant authority and resources to be ready for Y2K?
    Dr. KIZER. I believe we are exercising all of the authorities we have. We put language in our contracts, and we are trying to use our market leverage. However, we do not have any specific regulatory authority per se over this area, if that is what you're asking.
    Mr. EVERETT. I want to recognize Mr. Evans for a moment—he has another engagement—and let him make any comments he would like to.
    Mr. EVANS. Thank you, Mr. Chairman, and I salute you for scheduling this all-important follow up to last year's hearing on the VA's efforts to achieve Year 2000 compliance.
    And I would also like to note that this is the last hearing that Adam Sachs, our counsel for the subcommittee, will be attending in his capacity as a member of the professional staff here. We salute him for his several years of hard work and hope he will do well in the future.
    Mr. EVERETT. Absolutely.
    Mr. EVANS. Thank you, Mr. Chairman.
    [The statement of Mr. Evans appears on p. 82.]

    Mr. EVERETT. Let me continue. The bottom line is being ready. Will the VA health care system be ready for Y2K?
    Dr. KIZER. It is certainly our intent and expectation to be ready. I think, in all candor, we are still working through some of the issues. Our goal is to have all the information available and start making contingency plans—I mean, they are already being worked on, but in January of 1999, to start making contingency plans based on all of the information that we have at that time so that we have a year to work through this to do whatever testing and independent verification we feel is necessary, so that when the clock rolls around on January 1, 2000, we will, in fact, be prepared.

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    Mr. EVERETT. Of the almost 400 nonresponding manufacturers, how many of their devices are in the VHA's inventory, and how many will be replaced or retired?
    Dr. KIZER. I do not have that specific figure. I will be happy to provide it for the record.

    (Subsequently, the Department of Veterans Affairs provided the following information):

    VHA does not have an actual count of the devices from these manufacturers. we will survey all VA facilities and will provide the information to the Committee.

    Mr. EVERETT. Do you have any idea how many of these devices are considered to be critical care devices?
    Dr. KIZER. I believe all of our devices that are in critical care arenas, we have information on. Let me ask Mr. Wexler to comment on that.
    Mr. WEXLER. That's true. In addition, we have created a high-profile list of manufacturers who provide equipment to us that are either critical care, high-dollar value, or high volume in the VA health care system. And we have heard from all those manufacturers. So we don't believe that any of those on that list of remaining manufacturers we haven't heard from represent anything in our critical care inventory.
    Mr. EVERETT. Thank you. Mr. Mascara.
    Mr. MASCARA. Thank you, Mr. Chairman. The GAO, Dr. Kizer, has estimated that it will take approximately $40 million to solve this problem within the VA. Do you think that is sufficient or underestimated? Do you have any idea what it would take in dollars to resolve this problem?

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    Dr. KIZER. I am not confident at this time that that is an adequate amount. I think it is a good place to start the discussion. Again, we haven't heard from everyone yet. We don't have the full extent of information.
    So while I don't argue with that figure, I think it should be viewed as a floor and not the maximum amount that may be needed. I think, in fact, it may be substantially more than that.
    Mr. MASCARA. Thank you. I was going to ask the question, and you sort of answered it, about being involved with and coordinating with the health care industry generally about the problem.
    Isn't the problem the same regardless of where we are. It is the inability of the computer to recognize the change from, since we dropped the first two digits originally, to recognize the change at the year 2000. If someone could find a solution to that, wouldn't it be universal? Aren't we all looking, even though we might be going off in different directions as it related to the health care industry, whether it be the IRS or the issuing of pension checks or veterans' retirement checks, isn't the problem universal?
    Dr. KIZER. The genesis of the problem is universal. The way that it may manifest and how it may affect a given device or information system varies widely. It is really all over the board.
    But I think the more important point that you are asking is one that I would agree with. And it goes beyond Y2K. Many of the issues that VA is wrestling with in health care today are the same ones that are confronting the private sector.
    That's one of the reasons why, about a year ago, we initiated efforts to establish this National Patient Safety Partnership with the American Medical Association, the American Hospital Association, the American Nurses Association, the Joint Commission on Accreditation of Health Care Organizations, the Association of American Medical Colleges, the Institute for Health Care Improvement and the National Patient Safety Foundation—I believe those are all the founding members—and why we have issued invitations to a number of other public and private entities to join with us as we try to maximize what we can do in the public sector with what is being done in the private sector to find solutions to these common problems.

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    Y2K happens to be an excellent example of that and one of the reasons why the National Patient Safety Partnership targeted this issue as one of the first issues it took on.
    Mr. MASCARA. I see. So there is a coordination of some sort going on throughout the industry.
    Dr. KIZER. We are trying. Not everyone is at the table yet, though.
    Mr. MASCARA. What can you tell us about VA's progress towards implementation of facility by facility contingency plans for addressing the potential Year 2000 failures? And do you agree with GAO's view that individual contingency plans should be put in place, and how long do you believe it will take the VA to implement such plans?
    Dr. KIZER. Yes, I do agree that this is something that does have to be done facility by facility. Indeed, it has to be done service by service within the facility. We have issued a guidebook to facilities in this regard. Efforts are underway across the entire VA system.
    We have set the tentative date—and others in the industry agree—that by January 1999, we need to start contingency planning on all the information that we have at that point. We have set that, if you will, as a target date for the biomedical device and medical equipment industry to get all their information to us. We know in some cases that patches or fixes to the problems will be available by that time.
    So while efforts are, in fact, underway now, we do want a full year to work through both contingency planning, as well as independent verification where we feel that's necessary.
    Mr. MASCARA. Well, you've answered part of my next question, which was what, in your view, is the drop-dead date for receiving compliance information from manufacturers? Do you have some kind of a date?

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    Dr. KIZER. January 31, 1999.
    Mr. MASCARA. Do you have an opinion concerning which noncompliant medical equipment provides the greatest Year 2000 risk to patient safety? And how big of a risk do other facility-related systems and equipment pose? For instance, what steps has the VA taken to ensure that elevators, heating and cooling systems, and disaster recovery systems will be operational when we ring in the next millennium.
    Dr. KIZER. Thank you for the clarification. We have reviewed those. I am going to ask either Mr. Bourget or Mr. Wexler to comment further on that. We think we are in good shape in that regard, although we haven't finished everything that needs to be done.
    Mr. BOURGET. That's right, Dr. Kizer. We are still in the process of assessing our facility-based systems. We have identified some noncompliant products that need to be replaced, repaired, or upgraded. We are seeking further information from manufacturers in that arena, working with the General Services Administration and with the Department of Defense to leverage our efforts so that we are not, as Mr. Willemssen said, duplicating efforts. We feel that that will be a management problem.
    Mr. MASCARA. Thank you, Dr. Kizer. Thank you, Mr. Chairman.
    Mr. EVERETT. Thank you. Dr. Kizer, VA's Acting General Counsel informed manufacturers in June 1998 of plans to release Y2K compliance information. Has the release of that information occurred?
    Dr. KIZER. We have released it to a variety of forums. Just in the way of background, we had made multiple queries to many manufacturers before June 1998, as you know. We felt that making this information public might help the response rate for some of those who had not been compliant. But we also felt we needed to give the industry, those who had not responded, notice that we were going to make the information publicly available, so we did notify them and gave them time to respond. Since, then, we have made this information available to a number of sources that have inquired about it. We also have provided all of our information to FDA for the clearinghouse that has been agreed upon.

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    Mr. EVERETT. Since the VA is one of the largest medical device customers, should the VA declare a procurement moratorium with all those nonresponding manufacturers?
    Dr. KIZER. I think that is certainly possible.
    Mr. EVERETT. Or should I say, where it is possible.
    Dr. KIZER. I was going to say, there are a host of complexities involved there, and that is one of the options that would be available. Let me give you an example of how I look at it. Many people in the room here have had the experience of getting a notice from an automobile manufacturer that they are conducting a recall on a vehicle you have purchased, and you need to take it back to the dealer to get it serviced.
    When you take it in, if you get good service and the dealer takes care of the problem, then you feel good about doing business with them. If you get a hassle, or if they don't want to fix it, then you are not as inclined to do business with them in the future.
    I think that is in many ways the way I feel about this. This is a problem in which there is a flaw in the equipment. If the company fixes it, then that will probably make us feel good. If they don't, then we are probably not going to feel very good about doing business with that company in the future.
    Mr. EVERETT. Finally, from my questioning, was the FDA invited to join the National Patient Safety Partnership? If they were, when were they invited, and did you receive any response?
    Dr. KIZER. The FDA has been invited, as have essentially all the agencies in DHHS, as well as the DOD, the American Association of Retired Persons, and a number of other entities. To date, FDA has indicated interest in exploring the matter, and they may have a representative at an upcoming meeting at the end of this month. The National Institute for Occupational Safety and Health (NIOSH) has indicated that they would like to join with us, as has the Agency for Health Care Policy and Research (AHCPR). The DOD's health care program has indicated a desire to join the partnership. CDC has declined, as has AARP. We are continuing to invite and work with entities. We feel this is a great area for public-private interaction.

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    Mr. EVERETT. Can you tell us when the invitation was first issued to FDA?
    Dr. KIZER. I don't know if I have it here. It was some months ago. I believe it was in early June, but I can get that for the record.

    (Subsequently, the Department of Veterans Affairs provided the following information):

    An invitation to join the partnership was sent to the Food and Drug Administration on May 26, 1998.

    Mr. EVERETT. Dr. Kizer, thank you again for appearing before this subcommittee. Again, I appreciate the work you do and the difficult task you have and the service you perform for our veterans, and I look forward to our next meeting, whenever that may be.
    Dr. KIZER. Thank you, Mr. Chairman, and I also again thank you for your kind words.
    Mr. EVERETT. Thank you. I would now like to recognize Dr. John Callahan, Assistant Secretary for Management and Budget for the Department of Health and Human Services.
    Dr. Callahan, if you would please introduce your colleagues and then proceed with your statement.
STATEMENT OF JOHN J. CALLAHAN, ASSISTANT SECRETARY FOR MANAGEMENT AND BUDGET AND CHIEF INFORMATION OFFICER, DEPARTMENT OF HEALTH AND HUMAN SERVICES; ACCOMPANIED BY BRUCE BURLINGTON, M.D., DIRECTOR, CENTER FOR DEVICES AND RADIOLOGICAL HEALTH, FOOD AND DRUG ADMINISTRATION, AND WILLIAM BRISTOW, CHIEF INFORMATION OFFICER, FOOD AND DRUG ADMINISTRATION

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    Mr. CALLAHAN. Yes, Chairman Everett, I am accompanied by Dr. Bruce Burlington, who is the Director of the Center for Devices and Radiological Health of the FDA, and Mr. Bill Bristow, who is the Chief Information Officer of the Federal Food and Drug Administration.
    Chairman Everett, and other distinguished members of the subcommittee, I am pleased to testify here today before you about the efforts of the Department of Health and Human Services to ensure that biomedical devices regulated by the FDA will by Year 2000 compliant.
    At this point, I would like to offer my written testimony for inclusion in the record, and I will summarize.
    Mr. EVERETT. Without objection.
    Mr. CALLAHAN. I would summarize our testimony by making the following key points about FDA's actions to ensure Year 2000 compliance of biomedical devices.
    First, the FDA has, since June of 1997, been notifying the biomedical device industry of the need for Year 2000 compliance for their devices. On five separate occasions, FDA has sent letters and action transmittals to the industry about the issue. I believe it is fair to say that the industry is fully aware, or should be fully aware of their need to have Year 2000 compliance for their biomedical devices.
    Second, the FDA has operated a Year 2000 biomedical website since March of 1998. Recently, the Department has signed a formal agreement, as of three or four days ago, with the Department of Veterans Affairs to expand that website, populating it with additional data supplied by the Veterans Administration.
    The website is also being expanded almost on a daily basis by further information that is now being received from biomedical device manufacturers. And we would like to submit for the record the agreement that we concluded between ourselves and the Veterans Administration.

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    Mr. EVERETT. Without objection.
    (See p. 29.)
    Mr. CALLAHAN. Third, the industry is on full notice that it is in their, and clearly, the public interest to comply fully with FDA's request for information to be posted on this new and expanded website. While the FDA cannot require or compel the submission of information to the website, it does intend to post all responses and nonresponses to its request for information.
    Medical providers and the general public undoubtedly will take due notice of the failure of an equipment manufacturer to indicate the Year 2000 status of its equipment. Again, I would emphasize it is clearly in the economic and commercial self-interest of a health equipment manufacturer to post all relevant information on this website.
    Biomedical equipment manufacturers should also take due note of the fact that as of January 1, 2000, that if their devices prove in any way to be Year 2000 noncompliant and they prove to be a health hazard, they will be immediately subject to recall and other public health protections of the law. The FDA will move aggressively on this point. All biomedical device manufacturers should be fully aware of this fact.
    FDA does report progress on posting Year 2000 biomedical device information, even though more progress has to be made. While there are a total of about 13,500 medical device manufacturers overall, FDA estimates that approximately 1,935 of these manufacturers produce equipment that may be Year 2000 date-sensitive.
    Of these 1,935 manufacturers, over 50 percent or 1,019, as of last night, have responded to the website with Year 2000 information. FDA will continue to seek information from the other 916 biomedical device manufacturers who have not responded.
    Some companies have indicated that they are still assessing their products and cannot supply information at this time. FDA has informed them to provide information in a timely fashion and to indicate when their assessments will be complete and when they will be able to provide information to the website. We will also post that information on our website.

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    Thus far, the Year 2000 website information that we have indicates that we believe that the Year 2000 problems are going to be manageable. Among the postings, most devices indicate that they have no Year 2000 date problem. Some devices will, in fact, show an incorrect display or printing of a date, and there are patchworks or work-arounds, as they say in the trade, to deal with that.
    Other reported devices will work properly, provided that the connecting personal computer which works the device or which runs the device, is Year 2000 compliant. And I might add at this point, while the committee's concern is about the device itself, they should have appropriate concerns for the personal computers in these medical institutions which run these devices.
    Yet there are reported incidents where the device will not work unless and until the Year 2000 date problem is corrected. That means that FDA, in cooperation with the VA and other health partners, will maintain a high vigilance about this problem. Through the Patient Safety Coalition, which Dr. Kizer has worked tirelessly on, and through such efforts as FDA's bulletin on the subject sent to 700,000 health care practitioners last summer, FDA will also continue its outreach to the American health industry.
    In conclusion, the Department of Health and Human Services, in cooperation with its health care partners inside and outside of the government, intends to meet its responsibility to ensure that biomedical devices are Year 2000 compliant.
    We believe that the industry fully understands our obligations in that regard and will again, for their own best interest, provide a full range of Year 2000 compliant biomedical devices in order to best serve the health care needs of our veterans and the American people.
    Thank you, and I would be happy to answer any questions you may have.
    [The prepared statement of Mr. Callahan appears on p. 111.]

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    Mr. EVERETT. I find some of your testimony, frankly, puzzling. You are responsible for regulating this industry, yet you are willing to sit there and tell me that you don't have the authority to tell some manufacturer to respond to a request.
    Mr. CALLAHAN. I will defer to Dr. Burlington for a further answer on this, but by law, by legal authority, we cannot compel them to require the information.
    Mr. EVERETT. Have you asked for that authority? Have you asked the Congress for that authority?
    Mr. CALLAHAN. Let me defer to Dr. Burlington on that.
    Dr. BURLINGTON. We have not made a specific request for that authority.
    Mr. EVERETT. Why not, considering the seriousness of this? Well, first of all, do you think this is a serious problem?
    Dr. BURLINGTON. Mr. Chairman, I certainly think this is a serious problem. Hopefully, it will be manifest in a very small number of cases, because of the steps taken by this committee, by the Veterans Administration, and by FDA, among others, to deal with the problem, to understand it.
    We have been working with the manufacturers. We have asked them repeatedly for this information, and we have started down the track of saying let's find out where the problem is and let's provide this clearinghouse of information.
    Mr. EVERETT. In other words, you are responsible for regulating the industry, yet you are essentially toothless to do so. Is that your testimony?
    Dr. BURLINGTON. We have many authorities which are effective. We are not in a position today where we can compel the sorts of reports that would require advance posting of compliance status.

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    Mr. EVERETT. Let me ask you, testimony has been given that you are not a member of the National Patient Safety Partnership. Why on earth would you not want to be at the table to discuss these issues?
    Dr. BURLINGTON. Mr. Chairman, we are founding members of the National Patient Safety Foundation, the AMA body that started this. Dr. Kizer——
    Mr. EVERETT. I didn't ask you about that. I asked you about the National Patient Safety Partnership that Dr. Kizer referred to. I am not interested in what you are a founding member of. I want to know why you are not a member of that, and why you are not at that table.
    Mr. CALLAHAN. Mr. Chairman, if I may.
    Mr. EVERETT. Yes.
    Mr. CALLAHAN. I can assure you that we will be a member of the Patient Safety Coalition, and that will be done forthwith, sir.
    Mr. EVERETT. And I can assume that you do consider the medical device Y2K compliance to be a serious public safety issue?
    Mr. CALLAHAN. Absolutely, sir.
    Mr. EVERETT. While we all recognize that the VA committee is not the authorizing committee for HHS and FDA, do HHS and FDA have sufficient authority and resources to do the job—never mind authority, I think we have already discussed that. Sufficient resources to do the job for Y2K?
    Mr. CALLAHAN. Let me respond to that, Chairman Everett. As you know, currently, in the Senate Treasury and Postal Appropriations Bill there is an emergency appropriation which is being set forth for approximately $3.25 billion for Y2K work across the government, affecting all departments.
    We would intend to participate in that appropriation once it is passed by the Congress.

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    Mr. EVERETT. But do those funds include looking at the biomedical devices?
    Mr. CALLAHAN. Yes, sir, they do.
    Mr. EVERETT. Are there medical devices that could have potentially dangerous Y2K malfunctions?
    Mr. CALLAHAN. Let me defer to Dr. Burlington on that.
    Dr. BURLINGTON. Mr. Chairman, there certainly are. We would agree with the testimony that has already been heard this morning that there are some devices that, if a fix is not put in place, could endanger patients. And there are many devices where there could be confusion in medical practice about dates and about other information in patient records unless fixes are put in place.
    Mr. EVERETT. Does the FDA have a contingency plan if, as Y2K approaches, compliance status of some or much medical equipment remains still unknown?
    Mr. CALLAHAN. Let me offer one part of the answer to that question, Chairman Everett. As Dr. Kizer has indicated—and he is on the right track, since he is servicing the facilities—the facilities themselves have to have the contingency plans in place for replacing or repairing or discarding biomedical equipment.
    That would be the same case for the Department of Health and Human Services, for example, in its Indian Health Service facilities. We will, as part of the FDA's effort with the biomedical website, move as aggressively as we can, as I indicated earlier, in populating that website with the best information possible so that the providers will be able to take appropriate action to remedy any biomedical device problem.
    Mr. EVERETT. But if we don't have the information on what devices may malfunction, then how can we put a contingency plan out?
    Mr. CALLAHAN. Let me say this, Chairman Everett. As I indicated today, as of last night, we now have responses from 1,019 biomedical equipment device manufacturers. You are correct, and this committee is correct, that in the past we have not received sufficient response from the industry with that regard.

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    Your efforts, and certainly efforts of your colleagues in the Senate side, have, I believe, raised the temperature, if you will, for the manufacturers, and they are supplying our website with further information. We will move as aggressively as we can to get that information into the website for all the providers.
    Mr. EVERETT. How does FDA plan to address medical devices that were made by the nearly 100 manufacturers that are not even in business, so there's nobody to find?
    Dr. BURLINGTON. Mr. Chairman, the issue about devices that were put into service and for which there is no company continuing in business, or for which a company continuing in business has declared them obsolete, is a problem that we believe the institutions who own that equipment are going to have to take the responsibility in assessing what do they do.
    The agency is not in a position for equipment which is obsolete or where the entity has gone out of business, to direct an action, and it does pose a real and significant problem for many hospitals.
    Mr. EVERETT. I haven't any idea how small companies are supposed to do that. Let me just get one final question here and then I will go to my colleague.
    As I mentioned to Dr. Kizer, the bottom line is being ready. Will HHS and FDA know the Y2K compliance status of medical equipment and be in position to assure American veterans and the public that medical equipment in use on January 1, 2000 will be safe and effective?
    Mr. CALLAHAN. We believe that we will, but obviously, as you have indicated here, it will require our continued aggressive efforts with the manufacturers to make sure they give us that information and populate this biomedical website which we have now combined forces with VA with.
    Mr. EVERETT. Mr. Mascara.

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    Mr. MASCARA. I'd like to go off in a different direction and perhaps engage in some conjecture. How much of the reluctance of the manufacturers is driven by greed? That is, it costs money to solve the problem. On the other hand, they can have new equipment that doesn't have the problem, the Year 2000 problem. Are they dragging their feet because they would rather sell new equipment that doesn't have the problem than spend the money to solve the problem?
    And if so, Mr. Chairman, I think an investigation—let's drag those manufacturers in here and find out what's really going on, because if that's the case, that is an utter disgrace to think that manufacturers of this biomedical equipment would intentionally drag their feet so as to hopefully be able to sell when the Year 2000 is right around the corner. We are all going to be desperate and spend a lot of money buying their new equipment that doesn't have the problem. I think we need to investigate that.
    Mr. EVERETT. We've dragged them in here now. You will have your opportunity with the next panel to pose those questions.
    Mr. MASCARA. All right. Maybe that's why I see some smiles out there.
    The other subject I would like you to briefly explain is—and you spoke to it just a few moments ago, about the agreement with the VA to provide an Internet clearinghouse for medical equipment Year 2000 compliance information. Is that going on, and how soon will that site be available?
    Mr. CALLAHAN. Yes, we signed that agreement, as I indicated, several days ago. We are now in the process with the Veterans Administration of having their data transmitted and put up on our website. That will take approximately, we believe, another two or three weeks to get that done. So the website will be expanded within that time.
    And again, as I say, we have increased the number of responses from manufacturers who we have asked for information, from approximately 300 or 400 responses several weeks ago to now over 1,000. These are among the biomedical device manufacturers which we feel are most Year 2000 date-sensitive. So over half of the targeted manufacturers have provided us that data, and we will continue to work aggressively and cooperatively with the industry to get that additional information.

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    Mr. MASCARA. Thank you, Dr. Callahan. Thank you, Mr. Chairman.
    Mr. EVERETT. Thank you. Counsel for the minority would like to ask a couple of questions.
    Mr. SACHS. Dr. Callahan, your own testimony has indicated that so far the overall response from manufacturers has been, in your words, disappointing and incomplete. If you were to strip away all the resource concerns and the personnel concerns within your department, would you at least agree that some authority from Congress to mandate that the manufacturers respond would perhaps help push these manufacturers along, or is it your position that that is just not necessary.
    Mr. CALLAHAN. I think clearly, since the committee has raised it, we should engage in direct consultation with the committee about that matter. But whether that legislation comes to pass in the near or the short term, we intend to be as aggressive as we can under our current authorities with the manufacturers.
    I think they are showing a greater level of responsiveness, again, in no small part to the efforts of this committee and committees in the Senate, as well. I just clearly don't think, in the broad vein, if you will, it is in the economic or commercial self-interest of biomedical device manufacturers not to give us this information and not to cooperate, not only with this committee, but with other committees, to ensure that their devices are safe and effective. I just don't understand a business that would not want to operate in a safe and effective fashion in this area.
    Mr. SACHS. Without dwelling on this point too much, can you provide some explanation for the hesitancy of your department in the past to support one-time authority in this area to give some more teeth to your enforcement power? Is it a resource and personnel issue, or is there some other explanation?
    Mr. CALLAHAN. There are clearly, as in the case with any agency—and you have seen it in your own jurisdiction when you deal with the Veterans Administration—there are some resource constraints. This year, for example, in our appropriations process, for FDA, we have not received the President's budget request for all the operations of the FDA. They have another whole variety of other operations beyond biomedical device operations, food safety, a whole variety of other things. And we have not received as much resources, obviously, as we would like, for the variety of our concerns. So there is a resource dimension that would come into play.

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    Mr. SACHS. Thank you, Dr. Callahan. Thank you, Mr. Chairman.
    Mr. EVERETT. Certainly. Dr. Callahan, let me give you that I recognize the universe that you have to operate in is much larger and perhaps more complex in some ways than that of the VA. But I feel compelled to say that I don't understand why HHS did not take the lead in putting a database together and perform the service that VA has been compelled to perform, not only for the VA, but for the public safety.
    As I said, I give you the fact that your universe is a lot larger, but I do think that HHS or FDA was remiss in not taking the lead in this. I do, however, thank you for your testimony today and for appearing here before the subcommittee. Thank you very much.
    Mr. CALLAHAN. Thank you very much, Chairman.
    Mr. EVERETT. I would like to now call Dr. Alan Magazine, President of the Health Industry Manufacturers Association.
    Dr. Magazine, I would ask you to hold your comments to five minutes and we will submit your complete comments for the record. You may proceed, sir.
STATEMENT OF ALAN H. MAGAZINE, PRESIDENT, HEALTH INDUSTRY MANUFACTURERS ASSOCIATION

    Mr. MAGAZINE. Thank you, Mr. Chairman. My name is Alan Magazine. I am President of the Health Industry Manufacturers Association, a D.C. based trade association representing more than 800 manufacturers of medical devices, diagnostic products, and medical information systems, whose members make nearly 90 percent of the $58 billion in device products purchased annually in the United States.
    Thank you for this opportunity to speak about the readiness of our industry to ensure the safe and reliable operation of medical devices in the Year 2000. It goes without saying that the health and safety of patients constitute the paramount concerns of our industry.

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    Mr. Chairman, let me begin by answering a question that you have asked previous witnesses. I think I can safely say on behalf of the entire industry that we believe the Y2K issue is a potentially serious public safety issue. That is why we have taken the many steps and actions we have taken to try to assure industry compliance.
    Mr. Chairman, I want to make three points today. First, the device industry is extremely concerned about the potential hazards associated with the Year 2000 problem and has put substantial effort into assuring that devices function safely after the century change.
    Second, HIMA strongly supports the interests of HHS, FDA, the VA and others in determining the Year 2000 compliance status of device manufacturers.
    And three, HIMA members recognize that timely access to Year 2000 compliance information about their products is integral to the solution of the problem.
    Earlier this year, we pledged before Congress to work with the Federal Government and other concerned parties to make industry Year 2000 compliance information publicly available. I am here today to renew that pledge and to report to you on our efforts so far.
    We are as conscious as anyone that the clock continues to tick toward January 1, 2000, and we will do whatever patient health and safety require. HIMA continues to encourage our members to work to ensure their devices are Year 2000 compliant, to use the FDA website to communicate their compliance status, and to ensure that information about their compliance status is available to their customers.
    And we have created a Year 2000 section on HIMA's website which includes instructions on how to submit information to the FDA website. HIMA has also communicated its Year 2000 messages to more than 6,000 nonmember companies.
    I am pleased to report that these efforts are beginning to bear fruit. Of the thousands of FDA-registered device companies, the Agency has identified 1,935 whose products likely have a date-dependent function, as you have heard. We are encouraged that over 1,000 device companies have now responded to FDA's request for compliance information. That number has doubled since mid-July and is growing by 30 to 40 companies per day.

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    Nonetheless, we still have a ways to go. I should point out that in the current mergers and acquisitions environment, it is quite complicated to track compliance information. For example, HIMA's membership of slightly more than 800 companies actually consists of 300 parent companies and their more than 500 subsidiaries. It is difficult for anyone to determine whether a corporate headquarters has responded for all of its subsidiaries or whether each subsidiary has provided compliance information just for itself.
    Thus, as a second phase of our Year 2000 campaign, HIMA is publicly committing today to contact each of our 300 parent companies at the senior executive level to facilitate their corporate and subsidiary compliance efforts.
    We are going to work with the FDA and the VA to identify and contact companies that have not responded to their inquiries, and to ensure their communications are going to the appropriate company contacts. And we are organizing educational seminars for our members to help provide guidance in assessing and addressing Year 2000 issues.
    Earlier this year, the National Patient Safety Partnership referred to by Dr. Kizer and others—a coalition comprising the VA, the American Hospital Association, the AMA, and others concerned about the impact of the Year 2000 problem on patient safety—suggested that a central clearinghouse be established to make Year 2000 information publicly available. I am pleased to say we have been working closely with the FDA to make this happen.
    We also applaud the recent VA and HHS agreement to use the FDA website as the central Year 2000 biomedical equipment clearinghouse.
    The Year 2000 problem for our industry is not simple. Each company faces unique technological circumstances involving its products, and solutions developed by one firm will not be applicable to, or feasible for, others.
    The device industry encompasses more than 50 scientific and engineering disciplines, including such diverse fields as solid state physics and holography in the development of its products. Our products are used in applications throughout the human body, and in more than 50 different medical specialties, such as orthopedics, cardiology, and ophthalmology. There are more than 3,000 major product lines and approximately 84,000 individual products.

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    Nonetheless, we agree with FDA's assessment that most medical devices will not prove to be date-dependent.
    In closing, I would like to say that the Year 2000 problem for our diverse industry cannot be resolved with an easy one-size-fits-all solution. But we are confident that by working together we can achieve what we all want, which is that on January 1, 2000, medical technologies on which millions of patients depend, function safely and effectively.
    We are open to your suggestions and look forward to working with the members of this committee to achieve our shared goal.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Magazine appears on p. 118.]

    Mr. EVERETT. Thank you, Dr. Magazine. Let me ask, does Senator Bob Bennett's bill, S. 2392, the Year 2000 Information Readiness and Disclosure Act, address the liability issue for the medical device manufacturers to disclose noncompliance?
    Mr. MAGAZINE. Sir, I think it goes a long way towards solving a problem that really, in fact, has slowed down the compliance by manufacturers. We did hear from many manufacturers that they were very concerned about sharing the information because of liability concerns.
    For example, putting information on the Web that indicates that something is Y2K compliant, and then if something should happen, they'd be wiped out. So sharing the information really does help.
    I think the committee should understand that approximately 80 to 85 percent of the companies in the industry are very small and have less than 50 employees. Many of them have one or two products. And all it takes is one lawsuit to wipe out the company. And as we all know, some of these lawsuits, many lawsuits, can be frivolous.

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    So there really was a concern about liability issues and I think this bill will go a long way towards resolving those concerns.
    Mr. EVERETT. Having said that, you know from our conversation that I really feel that the industry perhaps did not take the lead in this when it should have. As I commented to you, after all, this is not brain surgery. This could have been looked at and predicted some time ago by industry that has, what, I think some $83 billion worth of business a year, or whatever that figure might be.
    Let me ask you, the National Patient Safety Partnership recommends that all U.S. medical equipment manufacturers take immediate action to identify their devices' compliance and make the information freely available to the public. This manufacturers' information should be provided no later than January 31, 1999. Do you think that's doable?
    Mr. MAGAZINE. Mr. Chairman, we represent about 800 companies. There are about 12,000 or 13,000 companies on the FDA registration list. What I can tell you is that we are making every effort to make sure that at the very least, our membership complies with those requests.
    We have made efforts as well and will continue to make efforts to try to get the rest of the industry to comply. And we are certainly open to any suggestions this committee would like to make for other actions that we could take.
    Mr. EVERETT. Well, we are kind of at the eleventh hour. Mr. Mascara.
    Mr. MASCARA. Thank you, Mr. Chairman.
    Perhaps, Dr. Magazine, you can try to respond to my earlier question to the previous panel. Did you say there was only 800 in your organization out of 12,000?
    Mr. MAGAZINE. Eight hundred companies that manufacture——

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    Mr. MASCARA. That belong to your organization.
    Mr. MAGAZINE. That's right.
    Mr. MASCARA. So we have 11,200 out there running around that belong to no organization or other organization? So you represent really a small portion of the manufacturers who make medical equipment.
    Mr. MAGAZINE. In numbers of companies, yes. In volume of production sales, it is over 90 percent.
    Mr. MASCARA. Okay. Today's testimony from the Department of Health and Human Services indicates concern over the apparent unwillingness of health industry manufacturers to respond to repeated inquiries concerning the 2000 compliance.
    In fact, the testimony states that so far the overall response from manufacturers has been disappointing and incomplete. How do you respond to this concern and how do you explain the spotty and often incomplete responses by members of your industry to these inquiries? In your view, would manufacturers be more inclined to respond if their future ability to contract with a Federal agency such as the VA were at risk?
    Mr. MAGAZINE. Congressman, admittedly, the industry got off to a slow start. And we were certainly taken to task by Senators Dodd and Bennett on the Senate side for that, and it clearly got our attention.
    But I would also say that there are many companies that have been working on this problem for years, literally, for years, solving the problems that do exist. First they had to find out whether their products were date-dependent. For those that are date-dependent, solving the problem is not something that can be done overnight.
    And in fact, there are many companies still working on the problem that have not reported to FDA, and we are asking them to do that and let FDA know the status of their situation. So I think it is a very complex issue that has taken time to get industry attention.

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    However, you also heard, I think, Dr. Kizer or one of his colleagues indicate that they didn't see any problems in any of the cardiac care areas, that those products seemed to be in compliance and the companies are working on it. So I think you have to sort of break down the industry, you have to stratify the industry and look at size of company, product line, etc. It is a very complicated situation.
    However, having said all that, I really think it's headed in the right direction. FDA has identified about 1,900 companies. More than 1,000 have complied; 30 to 40 are sending in information on a daily basis. I think that is very positive. I understand the concern and we share the concern, but I do think the glass is half full. We have seen a tremendous increase in compliance just in the last 60 days.
    Mr. MASCARA. So do you think it might be an incentive if these manufacturers could not contract with agencies like the VA if they didn't come to the table or didn't provide the information that they have, either their company or jointly with other manufacturers, to solve the 2000 problem.
    Mr. MAGAZINE. Well, let me put it this way, Congressman. These companies are very concerned about their customers. These companies are going to do whatever it takes to make sure that they don't lose customers. Clearly, the VA is a very large purchaser for many companies.
    But I would say this: I think we do now have the attention of the companies. I am not sure actions like that really are warranted. I would ask the committee to give it a little more time and to see what kind of compliance you see. As I said, in the last 60 days, it has increased significantly, and I think that will continue.
    Mr. MASCARA. Thank you, Mr. Chairman.
    Mr. EVERETT. Thank you. And thank you, Dr. Magazine.
    The House schedule today is very busy. It is very crowded and many of the members of the subcommittee could not be here today. Much media attention is obviously focused on another committee. But this hearing has raised a matter that should be of concern to every American.

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    On January 1, 2000, almost 4 million Americans will get sick or hurt, just as they do every other day, and they will need medical treatment. You heard Dr. Kizer say that each of these 4 million Americans will interact with devices maybe as much as 8, 10, 12 times. The FDA's effort on Y2K compliance for medical equipment appears to be finally coming together at what amounts to the eleventh hour, however. I just hope and pray that the database work can be done in time and if it can't, adequate contingency plans can be in place.
    The VA's health care system, by contrast, now seems to be a leader on Y2K for health care providers. And I know that the VA will cooperate with the FDA and share its information with everyone to the greatest extent possible.
    Medical equipment manufacturers have their work cut out for them also. They are in the best position to know or find out what is in Y2K compliance and what is not. The manufacturers have a public responsibility, as well as a legal obligation, to have safe products for health care and to disclose if any products may become unsafe on January 1, 2000. These manufacturers have put so many wonderful, life-saving devices on the market that I cannot believe they would not live up to their responsibilities and their obligations to the veterans of this country and to the American public.
    But if they do not, I support listing these manufacturers not disclosing Y2K status of their products on the FDA's website for the whole world to see. Further, the Federal Government should stop doing business with them, where and when possible.
    Finally, there is still time for another hearing or two, and no matter what happens in the November elections and the results of those elections, I would just guarantee you this subcommittee will continue to monitor the Y2K situation very closely next year regardless of who is in this chair.
    Thank you all for attending today. The hearing is adjourned.
    [Whereupon at 11:01 a.m., the subcommittee adjourned subject to the call of the chair.]

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