[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]



 
            Y2K AND MEDICAL DEVICES: TESTING FOR THE Y2K BUG

=======================================================================

                             JOINT HEARING

                               before the

                            SUBCOMMITTEE ON
                         HEALTH AND ENVIRONMENT

                                and the

                            SUBCOMMITTEE ON
                      OVERSIGHT AND INVESTIGATIONS

                                 of the

                         COMMITTEE ON COMMERCE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 21, 1999

                               __________

                           Serial No. 106-69

                               __________

            Printed for the use of the Committee on Commerce

                    ------------------------------  



                    U.S. GOVERNMENT PRINTING OFFICE
60-362 CC                   WASHINGTON : 1999



                         COMMITTEE ON COMMERCE

                     TOM BLILEY, Virginia, Chairman

W.J. ``BILLY'' TAUZIN, Louisiana     JOHN D. DINGELL, Michigan
MICHAEL G. OXLEY, Ohio               HENRY A. WAXMAN, California
MICHAEL BILIRAKIS, Florida           EDWARD J. MARKEY, Massachusetts
JOE BARTON, Texas                    RALPH M. HALL, Texas
FRED UPTON, Michigan                 RICK BOUCHER, Virginia
CLIFF STEARNS, Florida               EDOLPHUS TOWNS, New York
PAUL E. GILLMOR, Ohio                FRANK PALLONE, Jr., New Jersey
  Vice Chairman                      SHERROD BROWN, Ohio
JAMES C. GREENWOOD, Pennsylvania     BART GORDON, Tennessee
CHRISTOPHER COX, California          PETER DEUTSCH, Florida
NATHAN DEAL, Georgia                 BOBBY L. RUSH, Illinois
STEVE LARGENT, Oklahoma              ANNA G. ESHOO, California
RICHARD BURR, North Carolina         RON KLINK, Pennsylvania
BRIAN P. BILBRAY, California         BART STUPAK, Michigan
ED WHITFIELD, Kentucky               ELIOT L. ENGEL, New York
GREG GANSKE, Iowa                    THOMAS C. SAWYER, Ohio
CHARLIE NORWOOD, Georgia             ALBERT R. WYNN, Maryland
TOM A. COBURN, Oklahoma              GENE GREEN, Texas
RICK LAZIO, New York                 KAREN McCARTHY, Missouri
BARBARA CUBIN, Wyoming               TED STRICKLAND, Ohio
JAMES E. ROGAN, California           DIANA DeGETTE, Colorado
JOHN SHIMKUS, Illinois               THOMAS M. BARRETT, Wisconsin
HEATHER WILSON, New Mexico           BILL LUTHER, Minnesota
JOHN B. SHADEGG, Arizona             LOIS CAPPS, California
CHARLES W. ``CHIP'' PICKERING, 
Mississippi
VITO FOSSELLA, New York
ROY BLUNT, Missouri
ED BRYANT, Tennessee
ROBERT L. EHRLICH, Jr., Maryland

                   James E. Derderian, Chief of Staff

                   James D. Barnette, General Counsel

      Reid P.F. Stuntz, Minority Staff Director and Chief Counsel

                                 ______

                 Subcommittee on Health and Environment

                  MICHAEL BILIRAKIS, Florida, Chairman

FRED UPTON, Michigan                 SHERROD BROWN, Ohio
CLIFF STEARNS, Florida               HENRY A. WAXMAN, California
JAMES C. GREENWOOD, Pennsylvania     FRANK PALLONE, Jr., New Jersey
NATHAN DEAL, Georgia                 PETER DEUTSCH, Florida
RICHARD BURR, North Carolina         BART STUPAK, Michigan
BRIAN P. BILBRAY, California         GENE GREEN, Texas
ED WHITFIELD, Kentucky               TED STRICKLAND, Ohio
GREG GANSKE, Iowa                    DIANA DeGETTE, Colorado
CHARLIE NORWOOD, Georgia             THOMAS M. BARRETT, Wisconsin
TOM A. COBURN, Oklahoma              LOIS CAPPS, California
  Vice Chairman                      RALPH M. HALL, Texas
RICK LAZIO, New York                 EDOLPHUS TOWNS, New York
BARBARA CUBIN, Wyoming               ANNA G. ESHOO, California
JOHN B. SHADEGG, Arizona             JOHN D. DINGELL, Michigan,
CHARLES W. ``CHIP'' PICKERING,         (Ex Officio)
Mississippi
ED BRYANT, Tennessee
TOM BLILEY, Virginia,
  (Ex Officio)

                                  (ii)

              Subcommittee on Oversight and Investigations

                     FRED UPTON, Michigan, Chairman

JOE BARTON, Texas                    RON KLINK, Pennsylvania
CHRISTOPHER COX, California          HENRY A. WAXMAN, California
RICHARD BURR, North Carolina         BART STUPAK, Michigan
  Vice Chairman                      GENE GREEN, Texas
BRIAN P. BILBRAY, California         KAREN McCARTHY, Missouri
ED WHITFIELD, Kentucky               TED STRICKLAND, Ohio
GREG GANSKE, Iowa                    DIANA DeGETTE, Colorado
ROY BLUNT, Missouri                  JOHN D. DINGELL, Michigan,
ED BRYANT, Tennessee                   (Ex Officio)
TOM BLILEY, Virginia,
  (Ex Officio)

                                 (iii)


                            C O N T E N T S

                               __________
                                                                   Page

Testimony of:
    Benson, James S., Executive Vice President for Technology and 
      Regulatory Affairs, Health Industry Manufacturers 
      Association; accompanied by Bernie Liebler, Director, 
      Technology and Regulatory Affairs..........................    48
    Grob, George, Deputy Inspector General, Department of Health 
      and Human Services.........................................    26
    Horowitz, Bruce, Director of Product Assurance, Advanced 
      Neuro-modulation Systems, Inc..............................    53
    Hubbard, William K., Senior Associate Commissioner for 
      Policy, Planning and Legislation, accompanied by Thomas 
      Shope, Special Assistant to the Director, Office of Science 
      and Technology, U.S. Food and Drug Administration..........     7
    Neill, C. Thomas, Vice President of Corporate Services, 
      Quorum Health Group........................................    57
    Willemssen, Joel C., Director, Civil Agencies Information 
      Systems, Accounting and Management Division, General 
      Accounting Office..........................................    14

                                  (v)

  


            Y2K AND MEDICAL DEVICES: TESTING FOR THE Y2K BUG

                              ----------                              


                       THURSDAY, OCTOBER 21, 1999

              House of Representatives,    
                         Committee on Commerce,    
            Subcommittee on Health and Environment, and    
              Subcommittee on Oversight and Investigations,
                                                    Washington, DC.
    The subcommittees met, pursuant to notice, at 10 a.m. in 
room 2123, Rayburn House Office Building, Hon. Fred Upton, 
Chairman, Subcommittee on Oversight and Investigations and Hon. 
Michael Bilirakis, Chairman, Subcommittee on Health and 
Environment, presiding.
    Members present Subcommittee on Health and Environment: 
Representatives Bilirakis, Upton, Greenwood, Deal, Burr, 
Bryant, Brown, Green, and Barrett.
    Members present Subcommittee on Oversight and 
Investigations: Representatives Upton, Bryant, and Green.
    Staff present: Lori Wall, majority counsel; John Manthei, 
majority counsel; Chris Knauer, minority investigator; and Amy 
Davidge, legislative clerk.
    Mr. Upton. Good morning, everyone. As they say in Ann 
Arbor, welcome to the big house.
    Today the Subcommittee on Oversight and Investigations and 
the Subcommittee on Health and the Environment are holding a 
joint hearing on the issue of the Year 2000 problem as it 
relates to medical devices. Over the past year, the Committee 
on Commerce has undertaken an extensive review of the progress 
that the Health Care Financing Administration's Medicare 
contractors and its hospitals, nursing homes, doctors and other 
providers have made in becoming Y2K compliant.
    Earlier this year, these two subcommittees held hearings on 
the Y2K status of computer billing and financial systems as 
well as the Y2K compliant status of medical devices. Today, our 
hearing will follow up on the progress that the FDA, as well as 
the medical device manufacturers in hospitals, have made in 
ensuring the Y2K compliance of medical devices.
    Medical devices and equipment such as cardiac monitoring 
systems, cardiac defibrillators and x-ray machines are critical 
to providing health care treatment in a variety of health care 
settings. These devices have the potential to adversely affect 
patient safety if they perform any type of date or time 
calculation. The degree of risk increases significantly if the 
machine is a critical care or life support device.
    In 1997, the FDA began collecting data from device 
manufacturers regarding Y2K compliant status of their devices. 
After several letters and a small response rate from the 
manufacturers, the FDA joined in partnership with the VA, the 
Department of Defense and Health Industry Manufacturers 
Association to assemble a single database clearinghouse. The 
goal of the clearinghouse was to provide a centralized source 
of information on the Y2K compliance status of biomedical 
equipment in the U.S.
    Since FDA began its database, the flow of information has 
increased significantly. However, the FDA is not ensuring that 
the information displayed on their clearinghouse is accurate or 
complete. In other words, the clearinghouse serves as a central 
point for data, but not a guarantee by the FDA that the data 
provided is accurate or complete.
    In order to assess the reliability of the information 
submitted to the clearinghouse, the FDA announced at our last 
hearing that they would develop a list of potentially high risk 
devices that could cause serious consequences for the patient 
if they were to fail because of data related problems. The FDA 
would then identify those domestic and foreign manufacturers 
that have high risk devices for marketing in the U.S. and hire 
third party contractors to perform onsite visits to a random 
sample of manufacturers. The contractors would assess the 
manufacturers procedure and records, both for Y2K assessment of 
potentially high risk devices and for validation of any Y2K 
corrections made to those devices. We will hear today about the 
results of that study.
    While information regarding the Y2K status of medical 
devices continues to increase, recent surveys from the HHS 
Office of Inspector General show that less than half of 
Medicare fee for service providers who responded to their 
survey reported that all of their biomedical equipment was Y2K 
ready. Although more than 90 percent of all providers who 
responded to the survey reported that their biomedical 
equipment will be completely ready by December 31st, there 
obviously is work remaining.
    I hope that this hearing will demonstrate the need for all 
health care providers to ensure that their medical devices are 
Y2K compliant. It is crucial at the turn of the century that 
service to Medicare beneficiaries is uninterrupted, and that 
patient safety will never be jeopardized. The news we will hear 
today will not doubt be more encouraging than what we heard a 
few short months ago.
    However, we must remain committed to ensuring that medical 
devices, particularly those that are potentially high risk 
devices, will be Y2K ready as we enter the new year.
    I would like to welcome all of our panelists that are here 
to testify. Thank you for coming. At this point, I yield to the 
ranking member of the Health Subcommittee, Mr. Brown.
    Mr. Brown. Thank you, Mr. Chairman. I am pleased to 
participate in our third joint hearing on Y2K issues. I would 
like to thank our distinguished panelists for joining us and 
thank Chairman Upton and Chairman Bilirakis for calling this 
hearing. I will keep my remarks brief.
    The purpose of today's hearing is to get a progress report 
on efforts to forestall Y2K related problems affecting 
patients. I understand it remains difficult to assess Y2K 
preparedness on the part of hospital and physician providers, 
due in part to low survey response rates from those providers. 
I am interested in hearing the views of our witnesses on the 
significance of this information gap, and what if anything is 
being done at this point to remedy it.
    I look forward to an update from FDA and the medical device 
industry on their progress in their potential areas of concern. 
I think it would be useful to hear our witnesses' views on what 
is most and what is least likely to go wrong, and most 
importantly, to get a feel for your public awareness efforts 
and other strategies you plan to deploy as we move closer to 
Y2K.
    Finally, I want to commend the FDA and those in the 
industry and health care communities who have made good faith 
efforts to resolve the public's concerns regarding Y2K. The 
product of your efforts will hopefully contribute to a 
blessedly uneventful New Year's.
    I thank you, Mr. Chairman.
    Mr. Upton. I yield to the chairman of the Health and 
Environment Subcommittee, Mr. Bilirakis from Florida.
    Mr. Bilirakis. I thank the gentleman, and it is so very 
nice to be able to agree 100 percent with the ranking members' 
opening statement. It is a rarity, I am afraid.
    Mr. Chairman, I am pleased that we have again reconvened 
our two subcommittees to examine the readiness of medical 
devices and ensure that the delivery of health care will not be 
impacted by the arrival of the new century. And I, too, would 
like to welcome all of our witnesses who have taken the time to 
share their expertise on these important issues.
    I believe that it is critical, as others have said, that we 
work together to convey a sense of security to the American 
people. The Y2K issue has received a great deal of publicity. 
Many Americans have expressed a sense of uncertainty and are 
seeking assurances that the new millennium will be a cause for 
celebration and not concern.
    At the same time, we must convey a sense of urgency to 
members of the health care community. Any failed medical device 
is one too many. And 100 percent compliance is the only 
acceptable goal.
    In our first panel, the FDA will update us on the Y2K 
readiness of biomedical equipment. Medical devices play a 
critical role, as we know, in the daily delivery of health 
care. And as most of us know, these can range from basic 
thermometers to more complex devices such as electrocardiograms 
and infusion pumps. If devices that utilize computer software 
fail to operate or give improper readings, patients all over 
the country and the world may be put at an unnecessary risk.
    The FDA will describe the progress it has made on this 
issue since our hearing earlier this year. I also look forward 
to hearing from GAO and the HHS Office of the Inspector 
General.
    Our second panel will describe the steps taken by 
individual hospitals and device manufacturers to address the 
unique challenges posed by the Y2K problem. Manufacturers are 
often the only parties that have complete access to all of the 
design and operating parameters of an individual device. 
Therefore it is essential to know what is being done by medical 
device manufacturers to ensure that computer software will 
operate properly without interruption.
    I was particularly impressed by the testimony we received 
at our last hearing. I look forward to learning more from our 
witnesses today about the specific steps they have taken to 
ensure that patients will not be put at risk.
    In that regard, Mr. Chairman, I would just like to 
communicate that I was very pleased to learn of the efforts of 
Tampa General Health Care, which serves many of my constituents 
in the Tampa Bay area. As of yesterday, Tampa General Hospital 
had individually tested more than 5,700 pieces of equipment 
crucial to delivering uninterrupted health care.
    In so doing, it was able to report 100 percent compliance 
of respiratory therapy equipment, 97 percent compliance of 
biomedical devices and facilities, and 82 percent compliance 
for radiology equipment. Furthermore, I was assured that any 
equipment that is not determined to be Y2K compliant by 
December 15th will be removed from service.
    So again, I want to thank all of our witnesses for joining 
us and I yield back the balance of my time. Thank you, Mr. 
Chairman.
    Mr. Upton. Thank you, Mr. Chairman. I yield to the 
gentleman from Tennessee, Mr. Bryant.
    Mr. Bryant. Thank you, Mr. Chairman.
    And I do thank both of my chairmen, with whom I serve on 
the two committees that are conducting this joint 
investigation. I appreciate very much your holding this hearing 
today.
    Mr. Chairman, if you walk down Pennsylvania Avenue just 
past the Library of Congress, there is an interesting display 
in the front window of one of our local shops. It has a digital 
clock which counts down the actual days, hours, minutes, 
seconds, I think even microseconds, before the end of the 
millennium. Standing in front of the rapidly moving numbers 
gives one a strange sense of urgency, and maybe even a hint of 
concern about what will happen when the display finally reads 
zero across all of the numbers.
    I think the clock is meant to persuade you to buy your New 
Year's Eve champagne before supplies run out. But it does serve 
an important reminder to all of us that New Year's Eve may be a 
little different than our past celebrations.
    Talk to 10 different people and you will probably get 10 
different answers about what will happen at 12:01 on January 1, 
2000. The answers can be as extreme as the end of the world, or 
as mild as a possible shortage of aspirin and Rolaids for those 
who have been over-served the night before. Personally, I do 
not have any predictions, but I am glad to see for the most 
part our schools and businesses and Government institutions 
have taken a very serious approach on the problem.
    And likewise in Washington, we have actually passed a 
liability bill as concerns Y2K problems that might come up. 
Certainly with an interest in trying to remediate those types 
of concerns. But in the health care industry, we face a little 
different situation, that we are simply not dealing with 
business records and those kinds of things that we are 
concerned about in the general commerce, but we are dealing 
with potential human life here. So I think it is very important 
that we take a serious approach to this and as GAO has pointed 
out in the past, the question of whether medical devices, such 
as MRIs, x-ray machines, pacemakers, and even fetal monitors, 
can be counted on to work reliably after the stroke of midnight 
on December 31st is of critical importance to our Nation's 
health care system.
    While I am glad to see the FDA has been working over the 
past couple of years to ensure compliance of our medical 
devices, I do have some questions regarding the FDA approval 
process and the Y2K problem. I would be interested in knowing 
how and when the FDA incorporated the millennium bug into its 
approval process. For instance, GAO lists several devices as 
high-risk, including the implantable pacemaker, pulse generator 
and the implanted cerebral stimulator. When, if ever, did such 
devices have Y2K compliance in order to gain approval? At what 
point could FDA and the device manufacturers, for that matter, 
know that the year 2000 could pose a serious health risk? And 
when did the FDA act upon this knowledge?
    In the short, we should all be focusing on ensuring that 
our medical equipment and facilities will be functioning 
normally in January. But we should not ignore the long-term 
questions regarding how this problem might have been prevented. 
And I thank the Chair again for holding this hearing, and look 
forward to hearing from our two distinguished panels, including 
an expert witness, a truly expert witness, because he is from 
Tennessee, Mr. Neill, who is with Quorum Resources Group in 
Nashville, Tennessee. I welcome him and again, the other 
distinguished witnesses that will be testifying in the two 
panels before us today.
    Thank you.
    Mr. Upton. Thank you very much.
    I would note to the audience that we have a number of 
subcommittee and full committee meetings going on this morning, 
and the House is in session, so members will be coming in and 
out. At this point, I would ask unanimous consent that all 
members may enter their opening statement as part of the 
record, by unanimous consent.
    [Additional statements submitted for the record follow:]
 Prepared Statement of Hon. Tom Bliley, Chairman, Committee on Commerce
    For the past year, this Committee has conducted an in-depth look at 
the health care industry and its efforts to become ready for the Year 
2000.
    This Committee has received regular updates on the progress the 
Department of Health and Human Services and industry has made in 
addressing their Y2K problems. The subcommittees on Oversight and 
Investigation and Health and the Environment held two previous hearings 
on Y2K readiness as it relates to health care.
    Today, we are holding a follow-up hearing to determine the Y2K 
status of biomedical equipment, specifically critical care and life 
support devices. Medical devices are critical to medical treatment and 
research in both our federal as well as our private sector health care 
facilities. Any equipment that performs a date or time calculation is 
potentially susceptible to the Y2K bug.
    Since this process began over two years ago, much progress has been 
made with regards to Y2K readiness. However, work remains to be done. 
For example, a recent survey conducted by the Health and Human Services 
Office of Inspector General stated that only 27 percent of hospitals 
who responded to their survey reported that their biomedical equipment 
was Y2K ready. Although most hospitals reported that they intend to be 
Y2K compliant by the Year 2000, only time will tell.
    I hope this hearing will allow us all to gain a better insight into 
the process that medical device manufacturers, Medicare providers and 
the FDA have undertaken in order to ensure that medical devices and 
equipment will be Y2K compliant. And, to the extent that more work 
needs to be done, we must ensure that work is completed before the new 
year. The health and safety of Medicare patients is of the utmost 
importance.
    I would like to welcome all of our panels here today. Thank you all 
for coming and testifying before us today.
                                 ______
                                 
  Prepared Statement of Hon. Gene Green, a Representative in Congress 
                        from the State of Texas
    Thank you Mr. Chairmen for scheduling today's important hearing.
    I am very concerned that health care consumers of all ages will be 
adversely effected by computer glitches caused by Y2K.
    To date, there has been a great deal of confusion and uncertainty 
about the Y2K readiness of just about every public and private sector.
    However, some things have a more pressing need to be fixed because 
of our reliance on them for survival.
    I believe medical devices are as critical to protect against Y2K 
failure as anything else.
    In today's technology-driven health care era, our reliance on 
complex and computer driven medical devices has never been greater.
    Americans of all ages rely on these devices to not only maintain 
their health, but to keep them or their loved ones alive.
    This is not the first hearing that we have had on this subject, and 
I would like to commend those who have cooperated with our efforts on 
this matter.
    I look forward to hearing from our witnesses today to learn more 
about the Y2K readiness of medical devices and also to hear what work 
is left to be done on this critical issue.
    The time for action is now, so that we can ensure the safety of all 
Americans.

    Mr. Upton. Our first panel today includes the following 
individuals. If you could come to the witness table. Dr. Thomas 
Shope, Special Assistant to the Director, the Office of Science 
and Technology, Center for Devices and Radiological Health, 
from FDA. Mr. William Hubbard, Senior Associate Commissioner 
for Policy, Planning and Legislation, again from U.S. FDA. Mr. 
Joel Willemssen, Director of the Civil Agencies Information 
Systems, from the GAO. And Mr. George Grob, Deputy Inspector 
General, Department of HHS.
    As you gentlemen know, as some of you have testified 
before, the Oversight and Investigations Subcommittee always by 
practice has taken testimony under oath. Do you have any 
objection to that?
    [Witnesses respond in the negative.]
    Mr. Upton. And under House and committee rules, you are 
entitled to have counsel. Do any of you require or need counsel 
this morning?
    [Witnesses respond in the negative.]
    Mr. Upton. If you would stand and raise your right hand. Do 
you swear to tell the truth, the whole truth and nothing but 
the truth, so help you God?
    [Witnesses respond in the affirmative.]
    Mr. Upton. You are now under oath. And as you know, your 
testimony will be made part of the record in its entirety. If 
you could limit your remarks to 5 minutes, it would be 
terrific.
    Dr. Shope, we will start with you. Thank you very much.
    Mr. Shope. I don't have any opening remarks. Mr. Hubbard is 
going to deliver those for FDA, and I will be here to help 
respond to questions.
    Mr. Upton. Terrific. Mr. Hubbard.

TESTIMONY OF WILLIAM K. HUBBARD, SENIOR ASSOCIATE COMMISSIONER 
  FOR POLICY, PLANNING AND LEGISLATION, ACCOMPANIED BY THOMAS 
SHOPE, SPECIAL ASSISTANT TO THE DIRECTOR, OFFICE OF SCIENCE AND 
    TECHNOLOGY, U.S. FOOD AND DRUG ADMINISTRATION; JOEL C. 
   WILLEMSSEN, DIRECTOR, CIVIL AGENCIES INFORMATION SYSTEMS, 
ACCOUNTING AND MANAGEMENT DIVISION, GENERAL ACCOUNTING OFFICE; 
AND GEORGE GROB, DEPUTY INSPECTOR GENERAL, DEPARTMENT OF HEALTH 
                       AND HUMAN SERVICES

    Mr. Hubbard. Thank you, Mr. Chairman. And we of course have 
a written statement for the record, Mr. Chairman. So I will 
just summarize some of the points.
    When we were last here, the committee had concerns about 
medical device failures, and concerns about drug availability. 
And although you are not focusing on that today, I would like 
to mention it briefly.
    But let me update you on what we have done since we were 
last here. For medical devices, as we testified last spring, we 
have identified those manufacturers of devices that are 
potentially high risk if a Y2K failure should occur. That 
turned out to be just over 300 manufacturers who make about 90 
different types of computer-controlled devices. We then 
launched an intensive audit initiative to sample 80 of those 
300 manufacturers, about 25 percent, to determine if there were 
any problems, and as I said that was a random sample, with the 
intent that if we found problems in those 80, we would do more.
    And I am pleased today to tell you that none of those 
audits raised any significant concerns about failures of 
manufacturers to properly address computerization of their 
devices. So we do believe that the industry has done what it 
needs to do in this area, and that while we can't claim success 
until after January 1, we are very, very optimistic that things 
are moving very well.
    For drugs and medical supplies, things like tubing and 
blood bags and those sorts of things, we surveyed the industry 
to ask if their manufacturing processes were Y2K compliant. 
This was done both to gather safety information but also to be 
able to say to the public that they don't need to worry when 
they get their prescriptions filled at the end of December or 
January 1, that those drugs and other products will be in 
stores.
    We have followed that survey with comprehensive audits of a 
list of the priority manufacturers, the people that are the 
sole source manufacturers of a drug or hospital supply, orphan 
drugs, and the makers of the top selling 200 prescribed drugs. 
And again, I am pleased to inform you today that the vast 
majority, over 95 percent of these priority manufacturers, are 
Y2K compliant, and that none of those manufacturers, we 
believe, will experience problems that will deprive patients of 
critically needed drugs and hospital supplies.
    In addition, we have done quite a bit in the way of 
outreach. One of the important things is to get the word to 
hospitals that there is a way to get information about these 
devices, to know whether they are compliant or not, and if they 
are not compliant, how to get the fix they need. So we and the 
Health Care Financing Administration and the industry and 
others have attempted to reach out intensively to the hospitals 
to let them know that.
    We have also done various public announcements and have 
other things in the works to tell the public they don't need to 
worry about these products and do things like over-purchase and 
that sort of thing. We have a toll-free number, a web site, 
brochures, and I believe the committee has been given a 
consumer article, a major article about how we are doing this, 
and why consumers can be reassured. We also have an emergency 
operations center going up at FDA which we will staff 24 hours 
a day, so that if any evidence comes to us in late December or 
early January that there is a problem, investigators, engineers 
and other scientists can rush into that problem and make sure 
it gets fixed promptly.
    I would like to close with the comment that I think the 
real praise here is deserved by the industry, that the device 
and drug manufacturers have done what they needed to do, 
invested the resources and otherwise made sure that these 
products are not going to be a problem, by and large. There may 
be a few isolated instances which we will attempt to track 
down.
    And in fact, we are still looking and asking hospitals and 
others to tell us if they find a medical device that may fail 
that we did not know about. Dr. Shope is constantly hearing 
stories or rumors and trying to track those down. So far, we 
have not found them and we are glad of that.
    So with that, Mr. Chairman, I will be glad to take 
questions.
    [The prepared statement of William K. Hubbard follows:]
Prepared Statement of William K. Hubbard, Senior Associate Commissioner 
   for Policy, Planning and Legislation, Food and Drug Administration
                              introduction
    Good morning, my name is William K. Hubbard. I am the Senior 
Associate Commissioner for Policy, Planning and Legislation, Food and 
Drug Administration (FDA or the Agency). I am pleased to be here today 
to provide an update on the Year 2000 (Y2K) date issue as it relates to 
medical devices, drugs and biologics. In May of this year, I appeared 
before the Committee and discussed with you the need for FDA to allay 
the fears of the American public whether life-sustaining medical 
devices will function as intended and whether there will be a 
sufficient supply of high priority pharmaceuticals due Y2K issues. At 
that time, I told you that we were optimistic that the industries were 
taking the necessary steps to guard against Y2K breakdowns. Now that it 
is October and the year 2000 draws near, I am here today to tell you 
about FDA's efforts to validate our optimism.
    FDA stepped up its efforts to gather more information on the Y2K 
readiness from industry through additional surveys and audits. This 
additional data provides FDA with a high degree of confidence in 
assuring the health care community and the American public that 
essential medical supplies will be available; and medical devices will 
function as intended; and that there will be a safe and adequate supply 
of drugs available. The Agency's efforts to obtain additional data and 
the high degree of confidence we have today is a tribute to the 
collaborative efforts among the Federal sector, healthcare community 
and industry. Let me summarize for you the Agency's efforts.
                    y2k status of biomedical devices
    FDA has taken a number of steps to enhance the confidence of the 
American public that medical devices will function as intended as the 
year 2000 approaches. For the past two years, FDA has continued to add 
to its knowledge of the Y2K status of medical devices and to make this 
information available to healthcare facilities. In developing this high 
level of confidence FDA has taken a number of constructive actions to 
work with manufacturers and provide information to users about the Y2K 
compliance of medical devices.
                           fda's y2k database
    An important tool for obtaining information about biomedical 
equipment is FDA's Federal Year 2000 Biomedical Equipment Clearinghouse 
database. It is available via the World Wide Web at www.fda.gov. While 
the database has proven to be useful to healthcare facilities, 
professionals and consumers--receiving over 236,691 ``hits'' from 
197,461 users over a period of 17 months--FDA has continued to collect 
information from medical device manufacturers. FDA believes that 
approximately 2,300 of the 16,000 biomedical equipment manufacturers 
could produce equipment that could be affected by the Y2K problem. The 
vast majority of these 2,300 manufacturers have responded to FDA's 
requests for Y2K status information, and every effort is being made to 
locate the remaining companies .
                        surveys and assessments
    To bolster public confidence in industry's efforts to identify and 
resolve Y2K problems and to assure a continued supply of needed 
pharmaceuticals, biologics and essential medical supplies, FDA 
conducted a voluntary survey of manufacturers of drugs, biologics and 
consumable medical devices for Y2K readiness. These surveys assessed 
manufacturers' preparations and plans to continue operations after 
January 1, 2000. FDA then audited the survey results for a sample of 
the firms, as well as a high proportion of high priority firms to 
confirm the survey reports. These surveys indicate that the regulated 
industries have devoted considerable efforts to Y2K preparations and we 
do not expect significant interruptions of necessary supplies.
                 potentially high risk devices (phrds)
    Although FDA firmly believes that its normal regulatory processes 
provide the necessary assurances that Y2K problems with high-risk 
devices will be carefully addressed, FDA implemented a plan to provide 
additional assurance to the public and healthcare facilities about the 
Y2K status of medical devices. FDA addressed concerns about the 
adequacy of the medical device industry's actions taken to avoid 
serious Y2K problems by independently validating their Y2K self-
assessments.
    FDA developed and posted on the FDA Y2K website a list of types of 
potentially high risk devices (PHRDs) that are likely to be computer-
controlled and that could present a significant risk of immediate harm 
to the patient should the devices fail to operate as expected due to a 
Y2K problem. The PHRDs list contains 90 types of potentially high-risk 
devices for which FDA has identified 803 PHRDs manufacturers. An FDA 
contractor contacted these 803 firms and learned that approximately 60 
percent have no computerized devices.
    FDA initiated a special study designated as a ``Special Year 2000 
Data Gathering Request'' to examine the Y2K programs of a random sample 
of potentially high-risk device (PHRD) manufacturers. Eighty of the 
PHRDs manufacturers were randomly selected for an on-site assessment by 
an FDA contractor with extensive experience in information technology 
and Y2K verification and validation. The study was designed to:

 provide a high level of assurance that manufacturers have 
        properly assessed the Y2K status of their computer-controlled 
        medical devices;
 examine manufacturers' processes to evaluate how they assess 
        the Y2K status of their products;
 verify that the manufacturers have developed and properly 
        validated appropriate upgrades to correct any Y2K problems for 
        these devices; and,
 confirm the information provided by manufacturers for the 
        Federal Year 2000 Biomedical Equipment Clearinghouse database 
        by examining the supporting documentation of the manufacturers.
                      results of phrds assessments
    As of October 15, 1999, the contractor has completed all 80 on-site 
reviews of records to assess the existence and adequacy of 
manufacturers processes and procedures implemented under a quality 
system. The assessments are intended to assure that potentially 
vulnerable devices have been adequately assessed and that upgrades are 
correctly implemented and appropriately tested and evaluated by the 
manufacturer. As part of this process, FDA is evaluating the reports as 
they are completed and to date has found no serious problems related to 
Y2K. The contractor will provide FDA with a final report of the 
assessments in early November. FDA will review the contractor's report 
and will issue a summary report in early November. FDA is confident 
that the evaluation of these manufacturers will demonstrate the 
thoroughness with which manufacturers have assessed and provided 
information and corrections for non-compliant products.
    Now that manufacturers should have completed their assessments of 
Y2K compliance status and identified non-compliant devices, FDA will 
review this information to identify any manufacturers of PHRDs for 
which information is not available, or whose non-compliant products 
pose an actual significant risk to patient health. For firms that have 
declined to voluntarily participate in the PHRDs assessments, if these 
firms have not been inspected recently by FDA, the Agency will consider 
by the middle of November whether an FDA inspection of the firm should 
be conducted, based on the possible level of risk that the product may 
present. In these situations, FDA will review the steps taken by the 
manufacturers to notify users regarding any problems that might exist 
and to assure that appropriate corrections are implemented.
    In any case where the action by the manufacturer has been 
inadequate to assure patient safety, FDA will use its statutory 
authorities to require corrections and publicize the situations. FDA is 
prepared to take action which would include public advisories to device 
users, suggestions to manufacturers regarding voluntary recalls, 
mandatory recalls or seizure of the non-compliant devices in extreme 
risk situations. FDA expects, however, that the situations where such 
actions will be required will be rare as there are many incentives in 
addition to possible FDA regulatory action which lead manufacturers to 
address any such potentially high risk situations before FDA regulatory 
action is needed.
               pharmaceutical industry and y2k compliance
    FDA also has been examining the intersection of Y2K risk mitigation 
and the availability and quality of certain prescription drugs. In 
fact, government agencies and organizations within the pharmaceutical 
industry supply system (including manufacturers, distributors, 
pharmacies, hospitals, physicians, pharmacists, insurers and others) 
have been working closely together to prepare for the year 2000 date 
change and its potential impact on the supply of pharmaceuticals.
    In an effort to obtain additional data on this issue, on April 21, 
1999, the FDA Commissioner, Dr. Jane E. Henney, sent a letter to the 
Presidents and CEOs of approximately 4,228 pharmaceutical 
manufacturers, which includes prescription, over-the-counter, and bulk 
drug manufacturers; distributors-repackagers; and, medical gas 
manufacturers. The letter requested their assistance in assuring FDA 
and the American public that their firms have addressed the Y2K problem 
as it affects the adequate supply of safe and effective drugs. Included 
with the letter was a ``Y2K Assessment Survey'' concerning the status 
of actions pharmaceutical firms have taken to address this issue and 
assess Y2K readiness within the pharmaceutical industry. The focus of 
this effort is on prescription products with emphasis on the priority 
firms (sole source, orphan and the top 200 prescribed products).
Survey of Pharmaceutical Manufacturers
    As of October 8, 1999, 3,132 or 74.1 percent responded to the 
survey, including 1,053 of the 1,070 or 98 percent of the prescription 
drug manufacturers that were surveyed. Of the approximately 274 
priority manufacturers (160--excluding subsidiaries) which includes 
sole source, orphan and top 200 prescribed, 270 or 99 percent have 
responded. Of the firms that completed the survey, 95 percent state 
they will be ready for Y2K by the end of October with both the foreign 
and domestic firms having a similar pattern of Y2K readiness. Priority 
companies who indicated a later date are being contacted to determine 
their Y2K readiness and to make sure they are on track for meeting 
their goals. FDA is committed to maximizing the response rate 
particularly from the 274 priority manufacturers.
Pharmaceutical Audits
    Many have urged that FDA take additional actions beyond the survey 
program that will provide independent assurance of the adequacy of 
manufacturers' Y2K assessments and any resulting Y2K corrections. As a 
result, FDA decided to have a contractor, with extensive experience in 
information technology and Y2K verification and validation, audit each 
of the 160 highest priority pharmaceutical firms, as well as a random 
sampling of other drug manufacturers. The surveys, by the contractor 
via telephone or on-site interview, were begun on July 19, 1999.
    As of October 8, 1999, 88 percent of the assessments have been 
completed. It is important to note that to date the audit results have 
confirmed the findings of the survey. These results provide the basis 
for a clear message to reassure the American public that prescription 
drugs will continue to be available.
    FDA and the pharmaceutical industry will continue to monitor the 
Y2K status and availability of pharmaceutical supplies. FDA has 
processes in place to address product availability and has used these 
procedures to help get necessary products to patients. FDA will 
continue to work with the health professional community, industry and 
patient groups regarding Y2K readiness and product availability.
                 biologics industry and y2k compliance
    Another section of the pharmaceutical industry produces biological 
drugs as well as vaccines and blood products. We took the same survey/
audit approach with these manufacturers as well.
Survey of Biologics Manufacturers for Y2K Manufacturing Processes
    On June 30, 1999, a survey was mailed to 1,576 licensed biologics 
manufacturers and registered blood establishments. Letters to the 
biologics trade organizations requesting their assistance in 
encouraging participation in the survey effort were sent on June 30, 
1999. Of the responses that have been received, 92 percent report that 
they will be Y2K ready by the end of October.
    As of October 15, 1999, we have received responses from 1,483 or 94 
percent of the firms. Highest priority has been placed on 110 priority 
firms, which include licensed manufacturers of vaccines, therapeutics, 
allergenic products, viral marker test kits and major blood 
organizations. As of October 15, 1999, 101 or 90 percent of the high 
priority firms have responded.
Biologics Audits
    Telephone/site visit audits of these 110 high priority firms began 
in late August and as of October 14, 1999, audits have been completed 
for 83 or 75 percent of the high priority firms. To date, we have no 
reports of problems regarding firms that have been audited. We also 
have begun audits of a random sample of the firms that are not in the 
high priority group. As of October 14, 1999, we have completed audits 
of 48 of these firms with no problems identified.
         consumable medical supply industry and y2k compliance
Survey of Manufacturers of Consumable Medical Supplies for Y2K 
        Manufacturing and Distribution Processes
    On June 18, 1999, surveys were mailed to 3,070 consumable medical 
supplies manufacturers (approximately 2,000 domestic, 1,000 foreign). 
The focus of the survey is on those manufacturers that produce 
essential medical devices that are used and consumed on a recurring 
basis during the delivery of essential healthcare services and whose 
availability is critical to the uninterrupted delivery of health care 
and patient welfare. The survey requests information on mission 
critical automated manufacturing and distribution systems rather than 
Y2K status information on specific products. A follow-up letter was 
sent to non-respondents on July 23, 1999. As of October 14, 1999, 2,074 
responses and/or returned mail have been received with approximately 90 
percent of the fully analyzed responses (1309) reporting Y2K readiness 
by October 31.
Consumable Medical Supplies Audits
    For a sample of survey respondents, validation of survey responses 
by the contractor via telephone or on-site interview is being 
conducted. Highest priority for these assessments will be the 225 
manufacturers that produce a device only manufactured by 3 or fewer 
firms, so called ``few sources'' devices, and the 57 manufacturers that 
are the sole source for a supply (the 57 manufacturers are included in 
the 225). Of the 225 ``few sources'' firms, 197 have responded, and of 
the 57 sole source firms, 48 have responded. Attention also will be 
focused on those manufacturers with inconsistent responses. As of
    October 14, 1999, approximately 58 percent of the assessments of 
the priority firms have been completed with no serious problems 
reported. Eighty-nine percent report that they will be Y2K ready by the 
end of November. It is important to note that the initial audit results 
confirm the survey results. We will continue to follow-up with those 
manufacturers that are not Y2K ready and whose supplies, if not 
available, could have a significant impact on health care delivery.
                  recent agency wide outreach efforts
    The FDA website, including the Federal Y2K Biomedical Equipment 
Clearinghouse database, provides much of the information needed by 
healthcare providers and consumers regarding Y2K and FDA-regulated 
products. For answers to questions that can not be found on the Y2K 
website, FDA recently established a Y2K telephone hotline which can be 
reached by calling FDA's main information line toll-free at 1-888-INFO-
FDA or using the Y2K e-mail form on the FDA Y2K website.
    FDA also has developed an extensive outreach initiative that will 
provide video and audio news releases, brochures and articles designed 
to address the concerns of the consumer and the healthcare community 
regarding Y2K issues. Additional FDA outreach efforts are noted in the 
Appendix.
                               conclusion
    In summary, Mr. Chairman, there is now extrinsic and objective 
evidence that drug and device manufacturers have taken the necessary 
steps to ensure that their products and production facilities are ready 
for Year 2000 conversion.
    Indeed, I believe that manufacturers, wholesalers, and retailers of 
these products should be commended for taking this issue seriously and 
for devoting the necessary resources to protect their customers and, 
ultimately, patients from Y2K related failures. For those few firms 
that have not taken these steps, FDA will be vigilant in following up 
on any reports.
    FDA will continue to work with other Federal agencies, patient 
groups, healthcare provider associations and industry to optimize data 
collection and information sharing. Together we can provide the 
American public with the needed assurances that manufacturers will be 
Y2K ready. We all share a common goal of having medical devices that 
will function as intended and a safe and adequate drug supply available 
for the American public as we continue through the year-end transition.
    Thank you for the opportunity to testify.
                                Appendix
                   letters to medical device industry
1997
 June 25, 1997, notice to all medical device manufacturers 
        (8,322 domestic and 5,085 foreign) registered with FDA's Center 
        for Devices and Radiological Health (CDRH) indicating that they 
        needed to address this issue and review both embedded and non-
        embedded software products.
1998
 January 21, 1998, letter which was sent by DHHS to 
        approximately 16,000 medical device and biomedical equipment 
        manufacturers to ask them to voluntarily provide information on 
        the Year 2000 compliance status of their products.
 June 29, 1998, targeted, follow-up letter to specific 
        manufacturers of potentially vulnerable computerized devices.
 September 2, 1998, follow-up to the June 29, 1998, letter 
        directed to the manufacturers of potentially computerized 
        devices who had not responded to the previous requests.
 August 14, 1998 and September 2, 1998, letters from Dr. Bruce 
        Burlington, then Director, CDRH, and Dr. Friedman, then Acting 
        Commissioner of the Food and Drug Administration, to the Health 
        Industry Manufacturers Association (HIMA) requesting that the 
        Association take aggressive and immediate actions to encourage 
        and assist medical device equipment manufacturers in providing 
        information to FDA.
 Late September 1998, FDA posted on the website those 
        manufacturers of selected product categories that are likely to 
        include vulnerable products that had not provided a response to 
        FDA's inquiries.
1999
 March 3, 1999, letter requesting that the 2,300 targeted 
        biomedical equipment manufacturers carefully review the Year 
        2000 status information that they have provided or intended to 
        submit, and, where necessary, provide more specific information 
        on non-compliant products.
 March 29, 1999, letter requesting that targeted medical device 
        manufacturers submit a complete list of individual product 
        models that are Year 2000 compliant. Responses from 572 
        manufacturers have been received as of June 1, 1999.
 July 16, 1999, Public Health Notification regarding date-
        related computer controlled medical devices to administrators, 
        risk managers and biomedical/clinical engineers of 67,000 
        hospitals and healthcare facilities. The notification urged 
        them to develop contingency and remediation plans to avoid 
        serious adverse events; provided information to assist them in 
        contingency planning; provided information about the Federal 
        Y2K Biomedical Equipment Clearinghouse website; and encouraged 
        them to report problems or adverse events associated with Y2K 
        and computer-controlled devices to FDA's MedWatch Program.
Additional Outreach and Guidance
    In an effort to reach the widest group of individuals, both to get 
information and to spread information, CDRH also has been conducting 
extensive outreach to the device industry and to other consumers on 
this issue. These efforts are as follows:

 CDRH's Division of Small Manufacturers Assistance provided an 
        article in May 1998 entitled ``Biomedical Equipment 
        Manufacturers Urged to Share Year 2000 Information'' to 12 
        medical device trade press contacts and to 65 U.S. and 35 
        foreign medical device trade associations in order to 
        facilitate the dissemination of information to their members 
        regarding the website database and to encourage the posting of 
        data by manufacturers.
 The website and database were mentioned in the FDA Column of 
        the June 3, 1998, Journal of the American Medical Association 
        and in an article in FDA's Medical Bulletin that was sent to 
        approximately 700,000 healthcare practitioners this past 
        summer.
 In the spring of 1998, CDRH developed a Guidance Document on 
        FDA's expectations of medical device manufacturers concerning 
        the Year 2000 date problem. The guidance is available on the 
        FDA website.
 FDA also developed an article addressed to the users of 
        radiation treatment planning systems regarding the need to 
        assess these systems. The article was published in the 
        newsletters of relevant professional associations.
 Staff of CDRH have participated in numerous conferences and 
        video teleconferences devoted to the Year 2000 problem in 
        healthcare in order to communicate with healthcare facilities 
        regarding the Biomedical Equipment Clearinghouse and the need 
        to address the Year 2000 issue with devices.
 March 29, 1999, memorandum issued by the Director, Division of 
        Emergency and Investigational Operations, Office of Regulatory 
        Affairs (ORA), to the FDA field instructing investigators to 
        expand the Year 2000 activities to include asking questions 
        regarding what the firm has done to assure that the computer 
        controlled and date-sensitive products, manufacturing processes 
        and distribution systems are Year 2000 compliant.
 On May 17, 1999, the President's Council on Year 2000 
        Conversion in conjunction with the Veterans Health 
        Administration hosted a Roundtable event. The discussion 
        focused on those services and supply chains that are critical 
        to the health and well-being of all Americans, and in 
        particular the ready availability of pharmaceuticals from their 
        manufacture to the filling of prescriptions at the drug store. 
        The consensus of those present at the Roundtable (the brand 
        name and generic drug manufacturers, wholesalers, and health 
        care providers, payers, along with consumer advocates and 
        government regulators) is that allowing patients to obtain a 
        substantial advance (buying or stockpiling) is not necessary 
        and may actually cause the shortage that this kind of action is 
        trying to prevent. FDA continues to work with the 
        pharmaceutical industry, associations, and other Federal 
        agencies to assure a safe and adequate pharmaceutical supply.
 In a letter to providers, Health Care Financing Administration 
        (HCFA) noted the FDA website for providers to obtain 
        information on medical devices and Y2K compliance status 
        information.
 FDA has participated in 18 national and regional HCFA 
        conferences and three National Association of Rural Health 
        Clinics regional conferences which included discussions of 
        FDA's Y2K activities, status of the Federal Y2K Biomedical 
        Equipment Clearinghouse, pharmaceutical supply issues and 
        future Agency activities.
 On April 16, 1999, a Guidance for Industry and the Clinical 
        Community on ``Medical Device Reporting for Date-Related 
        Problems Including Y2K.''
 On June 7, 1999, FDA participated in a President's Council on 
        Year 2000 Conversion Roundtable event on medical supplies.
 On August 18, 1999, FDA staff participated in a Health 
        Resources and Services Administration (HRSA) teleconference 
        entitled ``Making Your Health Facility Y2K Compliant'' directed 
        to HRSA funded rural health clinics.
 On August 24, 1999, FDA issued a Talk Paper entitled ``The 
        Year 2000 Date Problem and Medical Devices.''
    Although most devices are regulated by CDRH, FDA's Center for 
Biologics Evaluation and Research (CBER) regulates blood bank software, 
which is of particular concern for potential Year 2000 problems. In 
January 1998, CBER posted guidance for industry entitled ``A Year 2000 
Date Change for Computer Systems and Software Applications Used in the 
Manufacture of Blood Products'' on the FDA website. The guidance 
provided specific recommendations to assist industry in its evaluation 
of computer and software systems used in the manufacture of blood 
products and to assist in evaluating the impact of potential Year 2000 
problems. CBER is aware of the status of these individual products and 
believes that the blood bank software will be Y2K compliant or will 
have a ``patch'' or ``work-around'' for the systems to ensure that the 
systems will work through Year 2000.

    Mr. Upton. Thank you.
    Mr. Willemssen?

                 TESTIMONY OF JOEL C. WILLEMSSEN

    Mr. Willemssen. Thank you, Mr. Chairman, Chairman 
Bilirakis, Ranking Member Brown, members of the subcommittees, 
thank you for inviting GAO to testify today.
    As requested, I will briefly summarize our statement. Over 
4,000 manufacturers have submitted data to FDA's biomedical 
clearinghouse. And about 61 percent of them reported having 
products that do not use a date, while about 8 percent or 342 
manufacturers reported having date related problems. According 
to FDA, these manufacturers reported about 1,000 products with 
date-related problems.
    FDA also accepts links to manufacturers' web sites for 
compliance information, rather than requiring individual 
submissions. And 429 companies have provided these links. As we 
testified before you in May, FDA stated it did not know the 
total number of products reported by these companies and how 
many had date-related problems.
    We reviewed all of those web sites and identified a total 
of more than 32,000 biomedical products, and we found that 
about 4,000 are considered non-compliant by the manufacturer. 
This is about four times the total number of non-compliant 
products that manufacturers individually reported to FDA.
    In addition, the quality of the compliance information on 
web sites varied significantly ranging from general assurances 
of compliance to detailed information on specific make and 
model. We believe it is critical to have that kind of detailed 
information and therefore think FDA should request 
manufacturers to provide this information on their web sites.
    Let me next turn to FDA's review of biomedical 
manufacturers. Last year, we recommended that HHS take steps to 
review manufacturers' compliance test results for critical care 
and life support biomedical equipment to give added assurance 
that such equipment was compliant. At your hearing in May, FDA 
agreed that it would compile a list of computer controlled 
potentially high risk devices and develop a list of 
manufacturers of these devices and select a sample of them for 
review.
    FDA has now done that, and has identified 90 types of 
products considered potentially high risk devices and 803 
manufacturing sites for these products. It should be noted that 
about 200 of those sites are in other countries.
    Our review of the first 25 site assessment reports that 
were available to us showed that most of the assessments were 
identifying a low level of concern and that until recently, no 
assessments were showing a level of concern that would be 
considered a risk to patient safety. However, earlier this 
week, FDA informed us that a report had been submitted showing 
a high level of concern for one site.
    Next, turning to health care providers, available data 
indicate that most providers responding to surveys who have 
used the FDA clearinghouse view it as helpful. However, many of 
the providers who have responded to surveys stated that they 
have not used the clearinghouse.
    And finally, the question of whether to test biomedical 
equipment for Y2K compliance is a difficult one that confronts 
many users such as hospitals and physicians' offices. In 
contrast to FDA's position that manufacturers' submissions of 
Y2K certifications provide sufficient assurance of compliance, 
some hospitals believe that testing of equipment is necessary 
to prove that they have exercised due diligence in the 
protection of patient health and safety.
    Our review of manufacturers' web sites disclosed that 
manufacturers' opinions on whether users should test equipment 
vary, with many providing information on Y2K testing and others 
saying that testing could disrupt the operation of software. We 
continue to believe that the overriding criterion in deciding 
whether to independently test is patient health and safety.
    That concludes a summary of my statement, and I would be 
pleased to address any questions.
    [The prepared statement of Joel C. Willemssen follows:]
  Prepared Statement of Joel C. Willemssen, Director, Civil Agencies 
 Information Systems, Accounting and Information Management Division, 
                                  GAO
    Messrs. Chairmen and Members of the Subcommittees: Thank you for 
inviting us to participate in today's hearing on the Year 2000 (Y2K) 
compliance status of biomedical equipment.1 The question of 
whether medical devices, such as magnetic resonance imaging (MRI) 
systems, x-ray machines, pacemakers, and cardiac monitoring equipment, 
can be counted on to work reliably on and after January 1, 2000, 
continues to be one of critical importance to our nation's health care. 
To the extent that biomedical equipment uses computer chips, it is 
vulnerable to the Y2K problem.2 In the medical arena, such 
vulnerability carries with it possible safety risks.
---------------------------------------------------------------------------
    \1\ Biomedical equipment refers both to medical devices regulated 
by FDA, and scientific and research instruments, which are not subject 
to FDA regulation.
    \2\ As is widely known by now, for the past several decades 
computer systems have often used two digits to represent the year, such 
as ``98'' for 1998, in order to conserve electronic data storage and 
reduce operating costs. In this format, however, 2000 is 
indistinguishable from 1900 because both are represented as ``00.'' As 
a result, if not modified, systems or applications that use dates or 
perform date- or time-sensitive calculations may generate incorrect 
results beyond 1999.
---------------------------------------------------------------------------
    Responsibility for oversight and regulation of medical devices, 
including the impact of the Y2K problem, lies with the Food and Drug 
Administration (FDA)--an agency within the Department of Health and 
Human Services (HHS). Since the fall of 1998, FDA has been providing 
information collected from medical device and scientific and research 
instrument manufacturers through its Federal Y2K Biomedical Equipment 
Clearinghouse.3
---------------------------------------------------------------------------
    \3\ This site can be accessed on the Internet World Wide Web at 
http://www.fda.gov/cdrh/yr2000/year2000.html.
---------------------------------------------------------------------------
    My testimony today will discuss (1) the status of FDA's Federal Y2K 
Biomedical Equipment Clearinghouse; (2) compliance status information 
on manufacturers' web sites referred to in FDA's clearinghouse; (3) 
FDA's efforts to review the Y2K activities of manufacturers of 
computer-controlled, potentially high-risk devices; (4) information on 
the compliance status of health care providers' biomedical equipment; 
and (5) information on compliance testing of equipment.
                               background
    Biomedical equipment is indispensable; it plays a central role in 
virtually all health care. It is defined as any tool that can record, 
process, analyze, display, and/or transmit medical data--some of which 
may include medical devices, such as pacemakers, that are implanted in 
patients--and laboratory research instruments, such as gas 
chromatographs 4 and microscopes. Such equipment may use a 
computer for calibration or for day-to-day operation. If any type of 
date or time calculation is performed, susceptibility to a Y2K problem 
exists, whether the computer is a personal computer that connects to 
the equipment remotely, or a microprocessor chip embedded within the 
equipment itself. This could range from the more benign--such as 
incorrect formatting of a printout or incorrect display of the date--to 
the most serious--incorrect operation of equipment with the potential 
to decrease patient safety. The degree of risk depends on the role of 
the equipment in the patient's care.
---------------------------------------------------------------------------
    \4\ Such instruments are used to separate the components of a 
solution with heat and measure their relative quantities.
---------------------------------------------------------------------------
    As part of its oversight and regulatory responsibility for domestic 
and imported medical devices, FDA has been collecting Y2K compliance 
status information on these devices, as well as on some scientific and 
research instruments. Its goal has been to provide a comprehensive, 
centralized source of compliance information on biomedical equipment 
used in the United States, and make this information publicly available 
through an Internet World Wide Web site. In addition, the Veterans 
Health Administration (VHA)--a key federal health care provider 
5--took a leadership role in determining the Y2K compliance 
status of biomedical equipment. Specifically, it obtained information 
from manufacturers on the compliance status of biomedical equipment in 
its inventory, and shared this information with FDA.
---------------------------------------------------------------------------
    \5\ A component of the Department of Veterans Affairs (VA).
---------------------------------------------------------------------------
    FDA has also acted to identify products within the array of medical 
devices used in health care where Y2K problems could pose a risk to 
patient health and safety. It identified 90 types of products that it 
refers to as computer-controlled, potentially high-risk devices 
(PHRD).6 These medical devices are characterized by their 
potential for immediate and serious adverse health consequences for a 
patient if they fail to function as designed or expected, including a 
failure to initiate or continue operation. These devices are

    \6\ Appendix I lists the 90 PHRD product types.
---------------------------------------------------------------------------
 used in the direct treatment or therapy of a patient, the 
        failure of which could result in patient injury or failure of 
        an intended treatment;
 used in the monitoring of vital patient parameters, 
        information that is needed immediately for effective treatment; 
        or
 necessary to support or sustain life during treatment or 
        patient care.
    PHRD products identified by FDA include breathing frequency 
monitors, electroanesthesia apparatus, hemodialysis systems and 
accessories, and fetal ultrasonic monitors and accessories.7 
Also included on the list of PHRD products is equipment used to collect 
human blood and manufacture blood products.8
---------------------------------------------------------------------------
    \7\ An electroanesthesia apparatus uses electricity to induce and 
maintain anesthesia during surgical procedures. Hemodialysis systems 
cycle blood from a patient's body to filter out body waste before 
returning the blood to the patient. Fetal ultrasonic monitors use sound 
to measure the heart rate of the fetus and uterine contractions of the 
mother during pregnancy and childbirth.
    \8\ Examples of such equipment include automated blood cell and 
plasma separators for therapeutic purposes and instruments used to 
screen the blood supply for blood-borne pathogens.
---------------------------------------------------------------------------
     biomedical equipment status information available through fda 
                             clearinghouse
    HHS, on FDA's behalf, initiated action to collect biomedical 
equipment information in January 1998 by issuing a letter to domestic 
and foreign manufacturers requesting information on the Y2K compliance 
of their product lines. All information received from these 
manufacturers was then to be made available to the public through an 
FDA web site.
    As we reported in September 1998, FDA's database did not include 
product compliance information from many manufacturers that had already 
provided such information to VHA; 9 further, VHA was not 
making this information available to the public. We therefore 
recommended that HHS and VHA jointly develop a single data 
clearinghouse containing information on the Y2K compliance status of 
biomedical equipment, and make this information publicly 
available.10 In response to our recommendation, FDA--in 
conjunction with VHA--established the Federal Y2K Biomedical Equipment 
Clearinghouse.
---------------------------------------------------------------------------
    \9\ Year 2000 Computing Crisis: Compliance Status of Many 
Biomedical Equipment Items Still Unknown (GAO/AIMD-98-240, September 
18, 1998).
    \10\ GAO/AIMD-98-240, September 18, 1998.
---------------------------------------------------------------------------
    VHA, the Department of Defense, and the Health Industry 
Manufacturers Association all assisted FDA in obtaining compliance 
status information from manufacturers. According to FDA, 4,288 
biomedical equipment manufacturers had submitted data to the 
clearinghouse as of October 4, 1999.
    Based on the data submitted, FDA places a manufacturer into one of 
four categories:

 Products that do not employ a date--manufacturer reported 
        status as ``All Products Do Not Use a Date.''
 Products that are all compliant--manufacturer reported all 
        products ``Y2K compliant.''
 Products with date-related problems--manufacturer reported 
        status as ``Products With Date-Related Problem.''
 Product status on manufacturer's web page--manufacturer 
        reported status to be ``Product Status Specified on a (Web) 
        Page.''
    As shown in figure 1, as of October 4, 1999, 61 percent of the 
manufacturers reported having products that do not employ a date, while 
8 percent (342 manufacturers) reported having date-related problems 
such as incorrect display of date/time. According to FDA, the 342 
manufacturers reported 1,035 specific products with date-related 
problems. Compliance data for 429 manufacturers were reported on their 
web sites and linked through the FDA clearinghouse.
 Figure 1: Biomedical Equipment Compliance-Status Information Reported 
             to FDA by Manufacturers as of October 4, 1999.
[GRAPHIC] [TIFF OMITTED] T0632.001

    Note: Total number of manufacturers = 4,288.
    Source: FDA.

    This total (4,288) excludes 132 manufacturers who, according to 
FDA, had not responded to the agency's request for product compliance 
information as of October 4, 1999. According to a top official in FDA's 
Center for Devices and Radiological Health, most of these manufacturers 
have gone out of business, do not make computerized products, or just 
cannot be located. This official added that FDA nevertheless continues 
to follow up with these manufacturers through letters and telephone 
contact. The clearinghouse lists the names of these manufacturers who 
have not responded to FDA's requests for product compliance 
information.
    Our September 1998 report also noted that information on the FDA 
web site was not detailed enough to be useful.11 
Specifically, the list of compliant equipment contained no information 
on equipment make or model. We therefore recommended that VA and HHS 
include in the clearinghouse information on the compliance status of 
all biomedical equipment by make and model. FDA agreed, subsequently 
requesting this information from manufacturers; users can now find 
specific information on the make and model of compliant medical devices 
on-line.
---------------------------------------------------------------------------
    \11\ GAO/AIMD-98-240, September 18, 1998.
---------------------------------------------------------------------------
 quality of compliance information on manufacturers' web sites varies 
                             significantly
    As an alternative to obtaining biomedical equipment product 
compliance information from manufacturers and posting it to the Federal 
Y2K Biomedical Equipment Clearinghouse, FDA accepts equipment 
manufacturers' references to their own web sites for compliance 
information. The clearinghouse provides users with a direct link to 
these web sites. As of October 1, 429 manufacturers had chosen this 
option, linking their web sites through the clearinghouse.
    While FDA is aware of the number of products and their reported 
compliance status for those manufacturers providing this information to 
the clearinghouse, in testimony before these Subcommittees this past 
May, officials stated that they did not know the total number of 
biomedical equipment products reported by manufacturers on their web 
sites, or how many of them were noncompliant. We subsequently reviewed 
information available through these web sites and reported in June that 
the quality of information available through them varied 
significantly.12 Specifically, while most sites contained 
compliance information on at least one product, some contained 
insufficient information or did not clearly distinguish biomedical 
equipment from nonbiomedical products.
---------------------------------------------------------------------------
    \12\ Year 2000 Computing Challenge: Concerns About Compliance 
Information on Biomedical Equipment (GAO/T-AIMD-99-209, June 10, 1999).
---------------------------------------------------------------------------
    Because of the Subcommittees' interest in the compliance 
information on the manufacturers' web sites, we reviewed this 
information to identify the total number of biomedical equipment 
products reported, and categorized their compliance 
status.13 We also reviewed these sites to assess the clarity 
and completeness of the information reported.
---------------------------------------------------------------------------
    \13\ We summarized the results of our review in four compliance 
categories--products that do not employ a date, products that are 
compliant, products that are noncompliant, and products whose 
compliance status is currently unknown. This last category includes 
those manufacturers who reported that they have not completed an 
assessment of their products, have discontinued a product, or have a 
product that is now obsolete.
---------------------------------------------------------------------------
    As of October 1, 1999, FDA's clearinghouse listed 429 manufacturers 
referring users to their web sites. Of this total,

 354 manufacturers reported compliance status information for 
        at least 32,598 individual biomedical equipment products; 
        14
---------------------------------------------------------------------------
    \14\ This includes medical devices, scientific and research 
instruments, and other supporting products, such as printers and 
software.
---------------------------------------------------------------------------
 71 manufacturers' web sites either contained insufficient 
        information on the number of products and their compliance 
        status, or did not clearly distinguish biomedical equipment 
        from nonbiomedical products;
 3 web sites were those of vendors or distributors, not 
        manufacturers; and
 1 manufacturer's web-site link in FDA's clearinghouse did not 
        work.15
---------------------------------------------------------------------------
    \15\ According to FDA, the contractor assisting it with the 
clearinghouse verified that this web site link was operable.
---------------------------------------------------------------------------
    Because of the limitations cited above for many of the 
manufacturers' web sites, our ability to determine the total number of 
biomedical equipment products reported and their compliance status was 
impaired. Accordingly, the actual number of products reported by these 
manufacturers could be higher than the 32,598 that we counted.
    As shown in figure 2, of the 32,598 products that we were able to 
identify on manufacturers' web sites, about 54 percent reportedly do 
not employ a date, about 29 percent of the products are considered 
compliant, and about 12 percent are reportedly noncompliant. The 
compliance status of the remaining 5 percent of products was unknown, 
for reasons such as the manufacturer's ongoing assessment of the 
product.
 Figure 2: Biomedical Equipment Compliance-Status Information Reported 
           on Manufacturers' Web Sites as of October 1, 1999.
[GRAPHIC] [TIFF OMITTED] T0632.002

    Note: Total number of products = 32,598.
    Source: GAO analysis of manufacturers' web sites.

    The 4,053 noncompliant products that we identified were from the 
web sites of 214 manufacturers. This number of noncompliant products is 
about four times the number reported directly by FDA in its 
clearinghouse (1,035). Examples of these noncompliant products included 
a bedside monitor, film digitizer, ultrasound systems, radiology 
information systems, and laboratory information systems. Included among 
noncompliant PHRDs were ventricular assist devices and hemodialysis 
equipment.16
---------------------------------------------------------------------------
    \16\ A ventricular assist device is a small electromechanical pump 
that helps maintain blood circulation in patients suffering from end-
stage heart disease. Hemodialysis equipment cycles blood from a 
patient's body to filter out body waste before returning the blood to 
the patient.
---------------------------------------------------------------------------
    In addition to supplying information on noncompliant products, most 
of the manufacturers with noncompliant products also provided solutions 
for correcting the problem. At least one solution to correcting a 
problem was offered by 190 of the 214 manufacturers we identified with 
noncompliant products. The solutions generally involved upgrades to 
hardware or software, manual action (such as turning the equipment on 
and off on January 1, 2000), or workarounds.17 We also noted 
that for these 190 manufacturers, at least 29 offered Y2K solutions to 
all their products at no charge, 9 offered no-charge solutions for more 
that 50 percent of their product line, 13 offered no-charge solutions 
to less than 50 percent of their product line, and 12 offered no 
solutions free of charge. For the remaining 127 of the 190 
manufacturers, we were unable to determine if Y2K solutions were 
available to users free of charge.
---------------------------------------------------------------------------
    \17\ An example of a workaround is noting on the printout of an EKG 
machine the year ``2000'' instead of ``1900.''
---------------------------------------------------------------------------
    Our review disclosed that the quality of the information on 
manufacturers' web sites continued to vary significantly. It ranged 
from general assurances of compliance to detailed information on 
specific product make and model. For example:

 A manufacturer reported that its products had no Y2K issues, 
        but it did not identify the products.
 A manufacturer reported that it was still assessing its 
        products, and did not provide any detailed information on its 
        web site.
 A manufacturer did not list theY2K readiness of products but 
        did report that the only Y2K problem it was having was with the 
        software it used to run its business.
 A manufacturer listed about 65,000 products, but did not sort 
        them by type so that the biomedical products could be easily 
        identified.
 A manufacturer reported that for its 282 products, 79 were 
        compliant, 50 were noncompliant, the status of 43 was currently 
        unknown, and 110 were not affected by the Y2K problem. It also 
        provided solutions for its reported noncompliant products.
 A manufacturer reported compliance information for 97 
        products, by make and model. Of these, 72 were compliant, 17 
        were noncompliant, 1 product was currently under assessment, 
        and Y2K did not apply to 7 products. It also provided solutions 
        for various noncompliant products, including information on the 
        availability of solutions and whether to replace the 
        noncompliant product.
    Because both the quality of and access to compliance information 
are critical to biomedical equipment users, any problems with 
information on manufacturers' web sites could have a direct bearing on 
the ability of health care providers to identify and correct any 
noncompliant equipment in their inventories. Accordingly, we believe 
that FDA should request that manufacturers that are providing 
information through their web sites clearly identify product make and 
model, compliance status, and availability of solutions for 
noncompliant equipment.
           fda is now reviewing manufacturers' y2k activities
    While compliance information is available through FDA's Federal Y2K 
Biomedical Equipment Clearinghouse, we have raised concerns in the past 
year about the lack of independent verification and validation of 
biomedical equipment that manufacturers have certified as compliant. In 
addition to making sure that manufacturers provide detailed information 
on their products, we believe that it is essential that FDA provide 
some level of confidence that critical care and life support medical 
devices will work as intended.
    In response to our previously reported concerns, FDA is now 
reviewing a sample of biomedical equipment manufacturers' Y2K 
activities, such as risk management, test planning and procedures, and 
implementation and contingency planning. In September 1998, we first 
reported that FDA did not require manufacturers to submit test results 
certifying product compliance.18 Rather, we noted, FDA 
relies on the manufacturer to validate, test, and certify that it has 
adequately addressed any Y2K problem. As a result, we stated that FDA 
lacked assurance that biomedical equipment manufacturers had adequately 
addressed the Y2K problem for noncompliant equipment.
---------------------------------------------------------------------------
    \18\ GAO/AIMD-98-240, September 18, 1998.
---------------------------------------------------------------------------
    Accordingly, we recommended that HHS take prudent steps to review 
manufacturers' compliance test results for critical care/life support 
biomedical equipment, especially equipment once determined to be 
noncompliant but now deemed compliant, and that for which concerns 
about the determination of compliance remain. At the time, HHS and FDA 
did not concur with our recommendation. They reasoned that submissions 
of appropriate certifications were sufficient, further stating that 
they did not have the resources to undertake such reviews.
    As mentioned, HHS and FDA have now changed this position. In a May 
25, 1999, hearing before these Subcommittees, FDA's Acting Deputy 
Commissioner for Policy testified that FDA proposed reviewing 
manufacturers' test results supporting compliance certifications for a 
sample of critical devices. FDA's proposal consisted of two phases. In 
the first phase FDA would

 develop a list of the manufacturers of these devices;
 from this list of manufacturers, select a sample of 80 for 
        review; and
 hire a contractor to develop a program to assess 
        manufacturers' activities to identify and correct Y2K problems 
        with PHRDs.
    The goal of the first phase of the survey is to extrapolate from 
the 80 assessments a level of overall confidence in the biomedical 
equipment industry's Y2K compliance activities. According to FDA, the 
second phase of the evaluation would be undertaken only if the results 
of the first phase indicated a need for further review of manufacturer 
Y2K activities because of concerns about how manufacturers are 
addressing the issue of product compliance.
    In carrying out its plan to assess manufacturers' Y2K activities, 
FDA issued a task order on July 1, 1999, for a contractor, assisted by 
two subcontractors, to perform assessments of the Y2K compliance 
activities for a sample of PHRD manufacturers. FDA identified 803 PHRD 
manufacturing sites that produce equipment sold in the United 
States.19 These were comprised of 726 biomedical equipment 
manufacturing sites and 77 manufacturing sites of blood and blood 
products equipment which manufacture product types listed in appendix 
I.
---------------------------------------------------------------------------
    \19\ The 803 consisted of those manufacturers among the 90 types of 
PHRDs identified that had registered PHRD products with FDA.
---------------------------------------------------------------------------
    FDA's contractor then randomly selected 325 of the 803 sites for 
possible assessment. These manufacturing sites were then contacted and 
asked if they would volunteer to participate in the assessment process. 
As of October 4, 1999, of the 325 randomly selected sites,

 197 were identified as producing no computer-controlled 
        equipment,
 80 agreed to participate,
 26 declined to participate, 20
---------------------------------------------------------------------------
    \20\ According to FDA, reasons given by manufacturers for declining 
to participate included scheduling or resource limitations, and recent 
regular FDA site inspections. Five manufacturing sites declined without 
giving a reason.
---------------------------------------------------------------------------
 18 were duplicates, 21 and
---------------------------------------------------------------------------
    \21\ These sites involved large, multi-site manufacturers where the 
FDA contractor had already selected two or more of the same 
manufacturer's sites. According to FDA, the contractor did not assess 
duplicates if they came up in later samples.
---------------------------------------------------------------------------
 4 did not respond.
    To carry out the on-site assessments of manufacturing sites, the 
contractor developed a guide for its examiners. This guide focused on 
the firm's Y2K activities in six areas: (1) executive leadership and 
control, (2) risk management, (3) corrective and preventive actions, 
(4) test planning and procedures, (5) communication with the consignee 
(user of the products), and (6) implementation and contingency 
planning.
    After completing these assessments at the manufacturers' sites, 
examiners were required to prepare a report of concerns in each of the 
six areas reviewed. Concerns were identified as high, medium, or low, 
as defined below:

 high--actions that are not timely, inadequate planning, 
        inadequate or incomplete resources, incomplete or inaccurate 
        deliverables, inability to validate results, and/or inadequate 
        due diligence;
 medium--actions that are somewhat late, incomplete planning, 
        insufficient or incomplete resources, deficiencies in 
        deliverables, and/or incomplete validation of results; and
 low--actions that are on schedule and have adequate resources.
    According to FDA's PHRD survey project manager, as of October 15, 
1999, examiners had completed all 80 manufacturer site assessment 
visits, and had prepared 62 assessment reports.
    We reviewed the 25 manufacturer site visit reports that were 
completed by the examiners and available to us as of September 10, 
1999. For 20 of these assessments, the examiners' assessed concern was 
low. At the five remaining manufacturing sites, the examiner found at 
least one item of moderate concern in the six areas, such as test 
planning and procedures. According to the PHRD survey project manager, 
the areas identified in the site visit reports as medium risk do not 
constitute a risk to patient health or safety.
    Until recently, none of the site visit reports submitted to FDA 
contained a concern assessed as high. However, earlier this week, the 
PHRD survey project manager informed us that FDA had just received a 
site visit report with concerns assessed as high in two areas--
leadership and control, and test planning and procedures. The report 
stated that the manufacturer's policies and procedures were found to be 
inconsistent, ambiguous, and were not followed in a manner that would 
meet due diligence requirements. It also noted that the qualifications 
of the manufacturer's personnel for specified tasks were not well 
defined, and that some personnel assigned to tasks identified in the 
policies and procedures were not qualified to perform those tasks. The 
report concluded that the manufacturer's procedures for Y2K assessment 
and corrective and preventive action were less than adequate, and that 
assessment procedures had not been applied consistently. The 
manufacturer subsequently told the examiner that action would be taken 
on the issues raised. FDA officials told us that they plan to follow up 
with the manufacturer.
    The project manager also told us that FDA's contractor is in the 
process of preparing a final report summarizing the overall findings 
from the 80 site visit assessment reports, detailing any problems 
encountered during the project. This individual indicated that FDA 
expects to receive the final report from the contractor later this 
month. Although FDA initially expected to submit a final report to HHS 
by October 1, it has not yet established a date for when this will 
occur.
    To assess how the contractor was executing FDA's task order, we 
observed selected site assessments. At the five manufacturing site 
assessments we observed, examiners generally followed the contractor-
developed audit guide and were knowledgeable about information 
technology management, Y2K testing, and risk assessment. During our two 
initial visits, we noted that examiners sometimes could not answer 
questions from the manufacturers relating to the FDA clearinghouse and 
the processing of the final report on the site assessments. We 
subsequently shared these observations with FDA officials. FDA agreed 
to consider our suggestions, such as better communicating to the firms 
the final reporting process and how the FDA Federal Y2K Biomedical 
Equipment Clearinghouse works. During the later three visits, we did 
not observe any similar areas of concern.
    Many of the 803 PHRD manufacturing sites identified by FDA are in 
foreign locations. Specifically, our review of the 803 sites on FDA's 
list showed that 203 were located in 27 foreign countries (appendix II 
lists these countries). Of the 325 randomly selected for assessment, 
233 were in the United States and 92 were in 22 foreign countries. 
Finally, of the 80 locations where manufacturers agreed to be assessed 
by FDA, 65 are located in the United States and 15 are located in 8 
other countries--Canada (1 site), Finland (2), Germany (4), the 
Netherlands (1), Norway (1), Sweden (2), Switzerland (1), and the 
United Kingdom (3).
information on biomedical equipment compliance of health care providers 
                               incomplete
    While information is available on the Y2K compliance status of 
biomedical equipment through the FDA clearinghouse and other sources, 
it is not clear at this time how extensively health care providers are 
using this information to determine their Y2K readiness. According to 
FDA, it has taken steps to make users aware of the clearinghouse. For 
example, FDA has published articles in professional trade journals and 
participated in conferences aimed at health care facilities.
    FDA also informed us that the Federal Y2K Biomedical Equipment 
Clearinghouse had received about 317,000 inquiries between April 1998 
and September 1999. However, according to FDA, it is not possible to 
determine the sources of the inquiries.
    To determine whether health care providers were using the FDA 
clearinghouse to assess the Y2K compliance status of their biomedical 
equipment, we reviewed readiness surveys sent to providers by several 
federal agencies and professional health care 
associations.22 For example, the American Medical 
Association (AMA) surveyed a random sample of 7000 of its members in 
July/August 1999 on whether they were aware of the FDA clearinghouse; 
only 17 percent of respondents indicated that they were.
---------------------------------------------------------------------------
    \22\ These include HHS' Office of the Inspector General, American 
Hospital Association (AHA), and AMA.
---------------------------------------------------------------------------
    In addition, a July 1999 HHS Office of Inspector General (OIG) 
survey sent to hospitals, nursing facilities, home health agencies, and 
physicians contained three questions on FDA's clearinghouse. These 
questions related to awareness, usage, and whether the clearinghouse 
was helpful.
    Responses to the HHS OIG survey varied significantly. For example, 
about 80 percent of the hospitals responding stated that they were 
aware of the clearinghouse, but less than half of the nursing 
facilities, home health agencies, and physicians responding stated this 
same awareness. Further, while about 60 percent of the responding 
hospitals reported that they used the clearinghouse, 25 percent or 
fewer of the responding nursing facilities, home health agencies, and 
physicians reported using the clearinghouse to obtain readiness 
information about their biomedical equipment.
    The HHS OIG survey noted that there was general agreement among the 
respondents that the clearinghouse information was helpful. 
Specifically, 100 percent of the physicians, 95 percent of the nursing 
facilities, 91 percent of the hospitals, and 87 percent of the home 
health agencies that said they had used clearinghouse data said they 
found the information to be helpful.
    Although compliance information on biomedical equipment is 
available through FDA's clearinghouse, theY2K readiness status of 
equipment at health care providers' offices is not known because a 
significant number of providers did not respond to the surveys. As 
shown in table 1, the response rates to the July survey from the HHS 
OIG to nursing facilities, home health agencies, and physicians were 
all less than 50 percent. The response rates to surveys from AHA and 
AMA on this subject were even less, at 29 and 8 percent, respectively. 
Lastly, the response rate to a survey from the American Health Care 
Association (AHCA) 23 was even more disappointing, at less 
than 3 percent.
---------------------------------------------------------------------------
    \23\ This is a federation of 50 state health organizations that 
represent nearly 12,000 nonprofit and for-profit assisted living, 
nursing facility, long-term care, and subacute-care providers.

                    Table 1: Reported Survey Results of Y2K Readiness of Biomedical Equipment
----------------------------------------------------------------------------------------------------------------
                                                                                         Percentage
                                                                 Number     Number of    Responding   Percentage
           Entity Performing Survey/Group Surveyed              Surveyed    Responses    Currently    Responding
                                                                                         Compliant    Don't Know
----------------------------------------------------------------------------------------------------------------
HHS Office of the Inspector General (July 1999)
HOSPITALS...................................................         1000       \1\ 53           27            5
NURSING FACILITIES..........................................         1000      \1\ 230           50           25
HOME HEALTH AGENCIES........................................         1000      \1\ 159           48           27
PHYSICIANS..................................................         1000       \1\ 79           56           22
American Hospital Association (AHA) (February 1999)                 2,000          583            6            2
American Medical Association (AMA) (July/August 1999).......        7,000          544          \3\          \4\
American Health Care Association (AHCA) (March 1999)........       12,000      \5\ 342           24          \4\
American Medical Group Association (AMGA) \2\ (March 1999)..          230           99           42          \4\
----------------------------------------------------------------------------------------------------------------
Source: Organizations listed. We did not independently verify this information.
\1\ The number of respondents who selected ``not applicable'' for the question were excluded from the number of
  responses.
\2\ This organization represents approximately 45,000 physicians in more than 230 medical groups across 40
  states.
\3\ According to the survey results, 67 percent of responding physicians rent or lease biomedical equipment that
  will be affected by Y2K; 62 percent of them were confident that their vendors have prepared the equipment for
  Y2K. Data were not provided on the remaining 33 percent of responding physicians.
\4\ The survey did not have ``Don't Know'' as a response choice.
\5\ Twenty-eight percent of the respondents said this question was not applicable to them.

    The survey results also indicated that much work remains in making 
biomedical equipment Y2K-ready. Table 1 shows that less than one third 
of the hospitals responding to HHS' OIG survey stated that all of their 
biomedical equipment was currently compliant, and only 6 percent of the 
hospitals responding to the AHA survey stated that their biomedical 
equipment was currently compliant.
       manufacturers vary on user testing of biomedical equipment
    The question of whether to test their biomedical equipment for Y2K 
compliance is a difficult one that confronts many users, such as 
hospitals and physicians' offices. FDA has taken the position that 
manufacturers' submissions of Y2K compliance certifications provide 
sufficient assurance of product compliance, and that such testing on 
the part of users is not necessary. VA and the Emergency Care Research 
Institute (ECRI) 24 have also stated that manufacturers are 
best qualified to analyze embedded systems or software to determine Y2K 
compliance. Accordingly, they do not encourage user testing of 
biomedical equipment for Y2K compliance. ECRI guidelines, however, 
suggest that health care facilities should consider testing interfaces 
between medical devices in cases where the facility cannot determine 
theY2K compliance of the interface from the device manufacturers.
---------------------------------------------------------------------------
    \24\ ECRI is an international, nonprofit health services research 
agency. It believes that superficial testing of biomedical equipment by 
users may provide false assurances, as well as create legal liability 
exposure for health care institutions.
---------------------------------------------------------------------------
    In contrast to VHA's and FDA's positions, some hospitals in the 
private sector believe that testing biomedical equipment is necessary 
to prove that they have exercised due diligence in the protection of 
patient health and safety. We have testified that officials at three 
hospitals told us that their biomedical engineers established their own 
test programs for biomedical equipment and, in many cases, contacted 
the manufacturers for their test protocols.25 Several of 
these engineers informed us that their testing identified some 
noncompliant equipment that the manufacturers had earlier certified as 
compliant. According to these engineers, the equipment found to be 
noncompliant all had display problems and was not critical care/life 
support equipment. We were told that equipment found to be incorrectly 
certified as compliant included a cardiac catheterization unit, a pulse 
oxymeter, medical imaging equipment, and ultrasound equipment.
---------------------------------------------------------------------------
    \25\ Year 2000 Computing Crisis: Action Needed to Ensure Continued 
Delivery of Veterans Benefits and Health Care Services (GAO/T-AIMD-99-
136, April 15, 1999).
---------------------------------------------------------------------------
    Our review of manufacturers' web sites disclosed that 
manufacturers' opinions vary on whether users should test their 
biomedical equipment. We noted that at least 37 manufacturers provided 
information on their web sites about Y2K testing. Of these, 30 
encouraged testing; 15 provided end users with information such as test 
protocols and instructions. Fifteen manufacturers also encouraged users 
to test their devices in configuration with related equipment to ensure 
that the devices operate as intended. Seven manufacturers did not 
encourage testing; two of these stated that such testing could disrupt 
operation of software.
    As we testified in May, the question of whether to independently 
verify and validate biomedical equipment that manufacturers have 
certified as compliant is one that must be addressed jointly by medical 
facilities' clinical staff, biomedical engineers, and corporate 
management.26 The overriding criterion should be ensuring 
patient health and safety.
---------------------------------------------------------------------------
    \26\ Year 2000 Computing Challenge: Much Biomedical Equipment 
Status Information Available, Yet Concerns Remain (GAO/T-AIMD-99-197, 
May 25, 1999).
---------------------------------------------------------------------------
    In summary, compliance status information on biomedical equipment 
can be found in FDA's clearinghouse or on manufacturers' web sites. The 
quality of the compliance information on the web sites, however, varies 
significantly, ranging from general assurances of compliance to 
detailed information on specific product make and model. Given the 
criticality of having medical devices function as intended on and after 
January 1, it is important that FDA encourage manufacturers to provide 
detailed information on the product make and model, compliance status, 
and availability of solutions for noncompliant equipment.
    To its credit, FDA has assessed the Y2K compliance activities of 80 
PHRD manufacturing sites. Although most appeared to have been assessed 
as having low degrees of concern, one site had a concern in two areas 
assessed at high. FDA is currently reviewing this site to make sure 
that there are no unresolved issues affecting patient safety.
    Because a significant number of health care providers are not 
responding to Y2K surveys sent by federal agencies and professional 
associations, the public lacks information on the readiness of 
providers. Such information would help alleviate public concerns about 
the Y2K readiness of health care providers and the biomedical equipment 
they use in patient care. Lastly, although there are varying views on 
whether end users should test their biomedical equipment for Y2K 
compliance, the overriding criterion should be ensuring patient health 
and safety.
    We performed this assignment in accordance with generally accepted 
government auditing standards, from July 1999 to October 1999. We 
reviewed and analyzed information listed in the Federal Y2K Biomedical 
Equipment Clearinghouse. We also reviewed and analyzed information 
listed on the web sites of biomedical equipment manufacturers referred 
to in FDA's Federal Y2K Biomedical Equipment Clearinghouse. In 
addition, we reviewed and analyzed FDA documentation on the agency 
assessments of PHRD manufacturing sites, including selected 
contractor's final reports to FDA on the manufacturers. We also visited 
five PHRD manufacturing sites and observed FDA's contractor examiners 
carry out the assessment of the firms' Y2K compliance activities. We 
interviewed FDA officials responsible for the Federal Y2K Biomedical 
Equipment Clearinghouse and oversight and management of the agency's 
survey of PHRD manufacturer Y2K compliance activities.
    Messrs. Chairmen, this concludes my statement. I would be pleased 
to respond to any questions that you or other members of the 
Subcommittees may have at this time.
                      contact and acknowledgments
    For information about this testimony, please contact Joel 
Willemssen at (202) 512-6253 or by e-mail at [email protected]. 
Individuals making key contributions to this testimony included Gwen 
Adelekun, Dr. Nabajyoti Barkakati, Michael Fruitman, James Houtz, 
Robert Kershaw, Helen Lew, Barbara Oliver, Michael Resser, Glenn 
Spiegel, and Glenda Wright.
                               Appendix I

 FDA's List of Computer-Controlled Potentially High-Risk Medical Device
                                  Types
------------------------------------------------------------------------
                    Classification Name
------------------------------------------------------------------------
Anesthetic vaporizer
Arrhythmia detector and alarm
Autotransfusion apparatus
Automated blood cell and plasma separator for therapeutic
 purposes
Automated blood grouping and antibody test systemBlood and
 plasma warming device
Blood storage refrigerator and blood storage freezer
Breathing frequency monitor
Breathing gas mixer
Cardioconverter, implantable
Cardiopulmonary bypass heart-lung machine console
Cardiopulmonary bypass on-line blood gas monitor
Cardiopulmonary bypass pulsatile flow generator
Cardiopulmonary bypass pump speed control
Centrifugal chemistry analyzer for clinical use
Continuous flow sequential multiple chemistry analyzer for
 clinical use
Continuous ventilator
DC-defibrillator low energy (including paddles)
Defibrillator, automatic implantable cardioconverter
Defibrillator, implantable, dual-chamber
Device, thermal ablation, endometrial
Discrete photometric chemistry analyzer for clinical use
Electroanesthesia apparatus
Environmental chamber for storage of platelet concentrate
External counter-pulsating device
External negative pressure ventilator
External pacemaker pulse generator
External programmable pacemaker pulse generator
Fetal ultrasonic monitor and accessories
Gas machine for anesthesia or analgesia
Glucose test system
Hemodialysis systems and accessories
High permeability hemodialysis systems
Hyperbaric chamber
Hysteroscopitc insufflator
Implantable pacemaker pulse-generator
Implanted cerebellar stimulator
Implanted diaphragmatic/phrenic nerve stimulator
Implanted electrical urinary continence device
Implanted intracerbral/subcortical stimulator for pain
 relief
Implanted nueromuscular stimulator
Implanted peripheral nerve stimulator for pain relief
Implanted spinal cord stimulator for bladder evacuation
Implanted spinal cord stimulator for pain relief
Indwelling blood carbon dioxide partial pressure (PCO2)
 analyzer
Indwelling blood oxygen partial pressure (PO2) analyzer
Infant radiant warmer
Infusion pumpInstruments used to screen the blood supply
 for bloodborne pathogens
Intermittent mandatory ventilation attachment
Intra-aortic balloon and control system
Isolated kidney perfusion and transport system and
 accessories
Kit, test, alpha-fetoprotein for neural tube defects
Laproscopic insufflator
Lipoprotein, low density, removal
Lung water monitorMedical charged-particle radiation
 therapy system \1\
Medical Neutron radiation therapy system \1\
Membrane lung (for long term pulmonary support)
Micro chemistry analyzer for clinical use
Neonatal incubator
Neonatal transport incubator
Nonroller-type cardiopulmonary bypass blood pump
Oxygen-uptake computer
Pacemaker programmers
Peritoneal dialysis system and accessories
Portable oxygen generator
Powered emergency ventilator
Processing system for frozen blood
Pulse-generator, dual chamber, implantable
Pulse-generator, program module
Pulse-generator, single chamber
Pulse-generator, single chamber, sensor driven, implantable
Pump, drug administration, closed loop
Pump, infusion, implanted, programmable
Radionuclide radiation therapy system \1\
Remote controlled radionuclide-applicator system \1\
Roller type cardiopulmonary bypass blood pump
Software, blood bank, stand alone products
Separator for therapeutic purposes, membrane automated
 blood cell/plasma
Sorbent hemoperfusion system
Stimulator, cortical, implanted (for pain)
Stimulator, electrical, implanted, for Parkinsonian tremor
Stimulator, sacral, nerve, implanted
Stimulator, spinal-cord, totally implanted for pain relief
Stimulator, subcortical, implanted for epilepsy
System, pacing, temporary, acute internal atrial
 defibrillation
Ventilator, high frequency
Ventricular bypass (assist) device
X-ray radiation therapy system \1\
------------------------------------------------------------------------
Source: FDA.
\1\ These device classifications include radiation treatment planning
  systems that are accessories to these device types.

                              Appendix II
       listing of foreign countries with phrd manufacturing sites
Argentina; Australia; Belgium; Brazil; Canada; Costa Rica; Denmark; 
Finland; France; Germany; Ireland; Israel; Italy; Japan; Malaysia; 
Mexico; Netherlands; New Zealand; Norway; Pakistan; People's Republic 
of China; Republic of Korea; Singapore; Sweden; Switzerland; 
Thailandand the United Kingdom.

    Mr. Upton. Thank you.
    Mr. Grob, welcome back.

                    TESTIMONY OF GEORGE GROB

    Mr. Grob. Thank you, Mr. Chairman.
    I was here in April, and at that time, you asked us all if 
we thought the health care providers, whom I will talk about in 
my testimony, as opposed to the manufacturers, would be ready. 
And I stated that I thought they would.
    I am less confident now. I think some might not be ready.
    In the April testimony, shortly after that, you asked our 
office, did the Senate Special Y2K Committee, to repeat the 
surveys that we had done in January. We did do that in July, 
and provided the copies of those surveys to you.
    Overall, we found that providers reported improvements in 
their level of Y2K readiness in the 6 months between our two 
surveys. Approximately two-thirds of providers reported that 
their billing and medical records systems were ready, compared 
to about half in the January survey. Almost all the providers 
predicted that these systems would be ready by the end of the 
year.
    However, when we examined these results more closely, 
concerns arose about the overall readiness of health care 
providers. For instance, at least a third of respondents 
reported that they had not yet tested their billing and medical 
records systems. Even fewer had reported that they had tested 
data exchanges with external vendors or said that an 
independent party had verified their readiness.
    Less than 60 percent reported that they had completed 
contingency plans, with some providers indicating that they had 
no plans to do so. Because of these findings, it causes me to 
view some providers' assertions of complete readiness with a 
degree of skepticism. If the providers have not tested their 
systems, there is really no way they can be sure that the 
systems are ready.
    With this background in mind, let me now turn to biomedical 
equipment. Health care providers were even less confident in 
the readiness of their biomedical equipment than other systems. 
Specifically, only 27 percent of hospitals reported that their 
biomedical equipment was completely ready. Other provider types 
reported around 50 percent of their equipment was ready.
    However, it is important to note hospitals may have many 
more pieces of equipment than other providers. Furthermore, 
even those who said their equipment was not completely ready 
did say that on average, 85 percent of it was. This indicates 
that hospitals are confident that most pieces will function 
properly into the new year.
    Between 60 and 70 percent of providers reported that they 
are relying on the manufacturers of biomedical equipment for 
Y2K information. However, almost half the hospitals said that 
they have had trouble getting the necessary information from 
these manufacturers. In addition to relying on the equipment 
manufacturers, some providers, especially hospitals, reported 
taking actions themselves.
    This is important, because the equipment needs to be 
working in the real world. And I would like to address for a 
moment the issue of testing. We should not confuse the need for 
bench testing and laboratory with the need to test it where it 
is being used. Much of the equipment needs to be connected to 
computers. It needs to be connected to other systems in the 
hospital or the nursing home setting.
    And when you look on the FDA web site, and manufacturers 
offer upgrades of their equipment to make them Y2K ready, those 
upgrades will have to be installed and they will have to be 
tested in conditions.
    If I may stretch my time, just to give you one analogy--if 
you went out today and you bought a brand new computer in the 
department store and a nice office suite to bring home with 
you, I'll bet you the computer would work and I'll bet you that 
the program is okay. But I will also bet you that it will be 
several days before you get that working in your home. It would 
be for me, at least.
    With this in mind, then, the increased attention to the 
readiness of the providers is very important. And I am hoping 
that this committee's hearing may help rouse those who are 
complacent from their unearned confidence.
    [The prepared statement of George Grob follows:]
    Prepared Statement of George Grob, Deputy Inspector General for 
  Evaluation and Inspections, Department of Health and Human Services
                              introduction
    Good morning, Messrs. Chairmen and members of the Subcommittees. I 
am George Grob, Deputy Inspector General for Evaluation and 
Inspections, Department of Health and Human Services. I am here today 
to discuss our concerns about the readiness of health care providers 
for the Year 2000 (Y2K), especially with regard to their biomedical 
equipment.
                               background
    The Y2K problem presents many concerns for health care providers. 
Not only must providers evaluate their billing and medical records 
systems; they also need to ensure that their biomedical equipment will 
operate correctly in the new millennium. Some biomedical devices, such 
as infusion pumps, pulse generators, blood handling and storing 
equipment, chemistry analyzers, monitors, and arrhythmia detectors and 
alarms, contain embedded microchips that perform date-sensitive 
functions. The Y2K problem may impact the performance of these devices 
by shutting down the equipment, administering the wrong dosage, 
providing an inaccurate diagnosis, or recording the wrong date.
    According to the Food and Drug Administration (FDA), the vast 
majority of biomedical devices will function without any problems after 
December 31, 1999. Furthermore, the FDA adds that most of those that do 
malfunction will only have minor problems, such as displaying an 
incorrect date, which will not significantly affect a patient's health. 
The FDA concludes that only a small number of devices will have serious 
operational flaws if they are not corrected before January 1, 2000. On 
its website, the FDA maintains a searchable database which lists the 
Y2K status of pieces of biomedical equipment as reported by the 
manufacturers.
    Today, I wish to discuss with you the IG's work in assessing the 
status of biomedical equipment, and also highlight some of our work 
with regard to how Y2K could impact health care providers.
                 oig's survey of health care providers
Overview
    Before I talk more specifically about biomedical equipment, I need 
to set up some background in order to lend context to the discussion. 
In April of this year, I testified before this Committee about the 
results of a survey on Medicare provider readiness conducted by my 
office. That survey, administered in January of 1999, covered a variety 
of issues, including billing systems, medical records systems, 
biomedical equipment, and contingency planning. Your Subcommittees, 
along with the Senate Special Committee on the Year 2000 Technology 
Problem, requested that we repeat the January survey in order to gain 
an updated assessment of provider readiness.
    The July survey covered the same basic areas as the initial survey, 
with a few minor improvements. The surveys were developed with 
assistance from the Health Care Financing Administration (HCFA) and 
several provider associations, including the American Association of 
Homes and Services for the Aging, the American Health Care Association, 
the American Hospital Association, the American Medical Association, 
the Health Industry Distributors Association, the National Association 
for Home Care, and the National Association for Medical Equipment 
Suppliers.
    As with the initial study, anonymous surveys were sent to 5,000 
randomly selected Medicare providers representing five provider groups: 
acute-care hospitals, nursing facilities, home health agencies, durable 
medical equipment (DME) suppliers, and physicians. Response rates 
ranged from a high of 56 percent for hospitals to a low of 20 percent 
for physicians. As I discuss the results of our survey, please keep in 
mind that this is anonymous self-reported data. The advantage of 
promising anonymity to respondents was that it may have increased 
response rates and diminished some barriers to honest replies--such as 
fear of liability for unreadiness. The disadvantage is that the data 
cannot be verified for accuracy. Additionally, we cannot make any 
assumptions about the Y2K-readiness of those providers who did not 
respond to our survey.
    Overall, we found that providers reported improvements in their 
level of Y2K readiness in the six months between our two surveys. 
Approximately two-thirds of providers reported that their billing and 
medical records systems were Y2K ready, compared to about half in the 
January survey. Almost all providers predicted these systems would be 
ready by the end of the year.
    However, when we examine the results more closely, concerns arise 
about the overall readiness of health care providers. For instance, at 
least a third of respondents reported that they had not yet tested 
their billing and medical records systems. Even fewer reported that 
they had tested data exchanges with their external vendors, or said 
that an independent party had verified their readiness. Less than 60 
percent reported that they had completed contingency plans, with some 
providers indicating that they had no plans to do so. Because of these 
findings, it causes me to view some providers' assertions of complete 
readiness with a degree of skepticism. If the providers have not tested 
their systems, there is really no way they can be sure that the systems 
are ready.
Reported Readiness of Biomedical Equipment
    With this background in mind, let me now turn to biomedical 
equipment. Health care providers were even less confident in the 
readiness of their biomedical equipment than their other systems. 
Specifically, only 27 percent of hospitals reported that their 
biomedical equipment was completely ready. Other provider types 
reported that around 50 percent of their biomedical equipment was Y2K 
ready. However, it is important to note hospitals have many more pieces 
of biomedical equipment than other providers. Additionally, even 
hospitals whose biomedical equipment was not completely ready still 
reported, on average, that 85 percent of their equipment was Y2K ready. 
This indicates that hospitals are confident that most pieces will 
function properly into the new year.
Reliance on Manufacturer Statements
    Between 60 and 70 percent of providers reported that they are 
relying on the manufacturers of biomedical equipment for Y2K 
information. However, almost half of hospitals said that they have had 
trouble getting necessary information from these manufacturers.
    Four out of five hospitals who responded to our survey knew about 
the FDA's website, which has a searchable database of Y2K readiness 
information as reported by biomedical equipment manufacturers. Almost 
60 percent of hospitals said that they had actually been to the FDA's 
site. However, less that half of the other provider types knew about 
the site, and even fewer had visited it. On the other hand, nearly all 
providers who had visited FDA's website found it to be helpful.
Testing
    In addition to relying on equipment manufacturers, some providers, 
especially hospitals, report taking action themselves. This is 
important because equipment needs to be working in the conditions in 
which it is actually installed and used and not just under ideal 
laboratory conditions. About 70 percent of hospitals reported that they 
had tested their biomedical equipment to ensure that it would function 
properly after Y2K. Less than 50 percent of other providers said that 
they had tested. However, even hospitals have not done particularly 
well in getting independent parties to verify the readiness of their 
biomedical equipment. Less than 40 percent of responding hospitals and 
25 percent of physicians, home health agencies, and other providers 
have had third parties come in and validate the readiness of their 
devices.
Survey Summary
    As with their billing and medical records systems, many providers 
are not taking the necessary steps to ensure that their biomedical 
equipment will be ready. Hospitals, though reporting less readiness 
than the other provider groups, actually seem to be ahead of the others 
in terms of knowledge and testing. Many hospitals seem to realize that 
while manufacturers' statements are a good starting point, relying on 
them is not enough. Again, testing of the equipment is the only way 
that providers can assure their equipment will function properly after 
December 31, 1999.
                    oig work at individual hospitals
    In addition to our survey work, we also have garnered information 
on hospital testing of biomedical equipment by conducting interviews 
with a number of hospitals. These interviews complement our survey 
results, and fill in some important details about how providers are 
dealing with Y2K and their biomedical equipment.
    In March of 1999, our auditors conducted interviews with 
representatives from 10 hospitals and 10 hospital groups representing a 
total of 411 facilities. The auditors gathered information through on-
site, mail, and telephone interviews. The purpose of these interviews 
was to determine the efforts used by hospitals to assess, inventory, 
repair or replace, and test biomedical equipment. These hospitals 
placed their biomedical devices into one of three categories, depending 
on the seriousness of consequences associated with its failure. The 
high risk category was comprised of equipment whose malfunction could 
cause injury or death to the patient or operator. The medium risk 
category contained equipment which may affect patient monitoring or 
lead to inaccurate diagnoses in a non-life threatening manner. Finally, 
low risk equipment failures will have no impact on the patient care, 
but the wrong date will appear on a report.
    We found that hospitals had three main methods of determining the 
readiness of a piece of biomedical equipment: the FDA website; direct 
communication with the manufacturer; and performing their own tests. 
The hospital representatives interviewed in March stated that the FDA's 
database was useful in determining the status of a piece of equipment. 
Hospitals reported that they were relying on testing conducted by the 
manufacturers in order to verify equipment readiness. According to our 
respondents, only 39 of the 411 hospitals were testing equipment to 
verify manufacturer statements.
    The preliminary results of this audit were presented to the FDA on 
March 31, 1999. We recommended that the FDA solicit test results from 
the provider community in order to determine if their tests 
contradicted the manufacturer statements in FDA's database.
    On June 10, 1999, the Deputy Secretary announced that the FDA would 
conduct on-site assessments of equipment manufacturers' procedures for 
determining compliance. In addition, on July 16, the FDA issued a 
notice which urged hospitals and other health care providers to report 
to FDA any test results which differed from manufacturer assertions.
                               conclusion
    Most health care providers report improvements in the readiness of 
their biomedical equipment and other systems. Nevertheless, there are 
still many uncertainties about their readiness and the ramifications to 
patients if they are not ready on time. When comparing our most recent 
survey results to the findings from the March audit, we have hope that 
providers are beginning to realize the importance of doing their own 
testing, and not simply relying on their manufacturers to identify 
potential problems. Hospitals generally seem to be responding 
accordingly. We are less confident of other providers' plans and 
actions.
    This concludes my testimony. Thank you for the opportunity to 
discuss the Y2K readiness of biomedical equipment. I would be happy to 
answer any questions you may have.

    Mr. Upton. Thank you. All of you did not use your full 5 
minutes. I think that is a record.
    I would just note, using your time still, Mr. Grob, that I 
just got that Sega Dream Quest for my son, and with the 
football NFL game. That was a couple of weeks ago, and I still 
don't have it working yet. So I have to do that soon, before I 
lose the money.
    I will recognize the chairman of the Health and Environment 
Subcommittee first for questions, Mr. Bilirakis.
    Mr. Bilirakis. Well, thank you, Mr. Chairman. I want to 
welcome the gentlemen. You have all testified, I am not sure 
whether Mr. Hubbard has, but I know the other gentlemen has 
testified here before. Dr. Shope, we commend you and thank you 
for your real concentration on this particular problem at FDA. 
You have shown that commitment in the past. And it is really 
good to see Mr. Willemssen and Mr. Grob again.
    However, it's not good to hear what they have to say. Now, 
we have all sorts of specific questions. Your last point, Mr. 
Grob, the independent validations on the equipment, damned good 
point, obviously. You have indicated your optimism of the last 
hearing has plummeted. And why it has plummeted, even though 
your survey says one thing, about 70 percent reporting they 
tested, your auditors conducted specific information on 
hospital testing and biomedical equipment and only 39 out of 
the 411, according to the written testimony, or roughly 10 
percent, less than 10 percent of the hospitals, responded that 
they were testing their equipment to verify manufacturers' 
statements. So it seems to me there is quite a disparity there.
    And I can maybe get to that. I guess I intend on getting to 
an awful lot of specifics. But dadblast it, we are talking 
about people out there who are depending on all of us. And it 
does not look to me like progress is being made. I don't mind 
telling you, I don't get an opportunity as often as I should to 
read the newspaper in the morning. But I saw that the IBM 
stock, for instance, plummeted in after-hours trading. And one 
of the reasons was Y2K.
    Now, IBM apparently is not going to be ready. I say 
apparently, because I did not go into the details and I do not 
know what the details are. So we have to be concerned. And Mr. 
Hubbard, I think probably there is more dependence upon FDA 
here than any other source. So I mean, do you have the 
authority that you feel you need to make sure that all of these 
devices that are out there will be safe and will be conducive 
to the good quality of health care? And if you do not have that 
authority, by gosh, you've got to get it. You have to check 
with us to make sure you have the authority.
    Go ahead, sir.
    Mr. Hubbard. Well, as I say, Mr. Chairman, we believe that 
the industry has assured that devices are compliant, or they 
have provided the means for hospitals and other users to make 
them compliant via a software fix or whatever. But----
    Mr. Bilirakis. But sir, I just read here that 39 out of 411 
hospitals did not respond that they were testing their 
equipment.
    Mr. Hubbard. Mr. Grob, correct me. I believe the issue is 
whether the hospitals have availed themselves of the 
information that exists, that does exist, and therefore, either 
assured themselves that a given device in their hospitals is 
compliant, or gone to the manufacturer and gotten the 
appropriate fix and included it in their product.
    I think that is really the issue. I do not think we have an 
issue of lots of devices out there that may fail but no one 
knows about it.
    Mr. Bilirakis. Well, who should we expect is in the best 
position to determine whether its products will operate 
properly? Should it be the manufacturer? Should it be the 
hospitals? Who should it be, in your opinion? I am going to ask 
all four of you.
    Mr. Hubbard. I will say it is the manufacturer's job to 
assess their device, and either notify the public that it is 
compliant, or to provide a fix so that it can be made 
compliant. Of course, hospitals have to, as I said, they have 
to avail themselves of that information, and if they have non-
compliant devices go to the manufacturer and get the fix, or if 
it is a workaround or whatever it could be.
    There are a number of things to protect themselves from the 
device causing a problem. But the hospital needs, if the 
information is there, the hospital needs to get it.
    Mr. Upton. Dr. Shope?
    Mr. Shope. Right. I want to clarify, I think, the statistic 
you are talking about. And I think that was in response to the 
survey asking hospitals, have you, the hospital, done 
independent testing of devices in your own facility to verify 
or to assure yourselves, in addition to the information from 
manufacturers. And I think what the response reflects is a 
somewhat difference of opinion. The vast majority of hospitals 
are relying on the information provided by the manufacturer who 
designed the product, who has FDA oversight, and who is 
providing information. There are a set of hospitals that, in 
addition to relying on manufacturer information have decided 
that they want, for whatever reasons, to test themselves, 
additionally, in addition to the information from 
manufacturers.
    It depends on the kind of product as to whether the testing 
in a hospital facility is really necessary, or, I think, adds 
all that much additional value over the information that comes 
from the manufacturer. If a device in a hospital has been 
hooked into a system, made part of a system with components 
from different vendors, and there is no one really responsible 
for that overall system, of course, the hospital needs to 
assess how that is working, those kinds of setups.
    But in terms of hospitals relying on manufacturers' 
information, I think they can rely on the manufacturers' 
information with a high degree of confidence.
    Mr. Bilirakis. Well, I know my time has expired, Mr. 
Chairman. I would sure love to hear very briefly from the other 
two gentlemen, if you would be so kind.
    Mr. Willemssen. Certainly. From a provider perspective, the 
first step for providers, whether they are hospitals or 
physician offices, is to know what they have. They have to have 
an inventory of their devices. And then they have to map that 
inventory against available information on what the 
manufacturers are saying. We think the FDA site is one good 
source of information. On the other hand, some hospitals 
contact the manufacturers directly.
    And then it is incumbent on the provider to make a risk 
determination, especially for critical care devices, or how 
much more information should we get. Should we independently 
test it ourselves or should we ask for test results from the 
manufacturer? There are a number of steps that they need to go 
through in order to make that determination.
    And it is quite a time consuming process, because once they 
get that information back, they will have to go back to their 
inventory and decide which items they are going to take out of 
inventory and which items are going to be okay.
    In addition to that, each major provider should have their 
own day one strategy for the last days of December and the 
first days of January. They should have detailed plans on how 
they are going to respond.
    Mr. Bilirakis. They should have.
    Mr. Willemssen. Yes. They should have detailed plans on how 
they are going to respond in the event that disruptions occur 
and what kinds of contingencies they are going to rely on if 
they do occur.
    Mr. Bilirakis. Well, my time has really expired. But there 
is a bottom line here. And the bottom line is somebody has to 
be responsible either the manufacturer does this, or the 
hospital has a responsibility, or FDA has a responsibility. 
Somewhere along the line there has to be one set responsibility 
to make sure. The month of October is virtually gone. We have 2 
months to go. And we have not seen progress, it has gone the 
other way according to what Mr. Grob has told us.
    So Mr. Chairman, I am very disappointed. Thank you.
    Mr. Upton. Mr. Brown, I would just like to note for 
everyone here, we are going to try to keep this rolling through 
this vote, so some of our colleagues went to vote, they are 
going to come back, so we will be able to vote, hopefully.
    Mr. Brown.
    Mr. Brown. Thank you, Mr. Chairman.
    The last 8 or 10 months, I have been impressed listening to 
testimony and in reading testimony and reading and looking at 
other things that Government agencies such as HCFA, such as 
FDA, such as Social Security Administration, others, are pretty 
well prepared for Y2K and have done a lot to sound the alarm 
for private sector agency, private sector groups, whether it is 
banks or Social Security or the providers that you work with 
for those private sector groups to be ready.
    But I am disappointed, and this is my reason for concern, 
especially the comments of Mr. Grob and Mr. Willemssen, of the 
response rates from the private sector, the HHS, the Inspector 
General, sending surveys to nursing facilities, home health 
agencies, physicians, all had less than 50 percent response. 
The AHA, the Hospital Association, had, I believe, a 29 percent 
response, according to the testimony of, this was the GAO 
testimony. And the AMA had an even poorer response of 8 
percent. That's a cause for major concern.
    Then I listened to Mr. Grob say that the significant amount 
of equipment is not, even of the ones that have responded, a 
significant amount of equipment is not ready, the providers 
tell you. And then I heard Mr. Grob say, talk about drawing the 
distinction between the generic Y2K or susceptibility of a 
particular device, and how actually that device might function 
in the real world. I think your analogy with computers was 
something I could even understand, so thank you for that.
    What does all this mean? Mr. Grob, does this mean that, 
what are you expected to do when you can't get this kind of 
response from the private sector and people love to blame 
Government for everything, but it seems that Government 
agencies have done this right, and if Government agencies had 
done as poorly as the private sector seems to have done in 
this, we would have you in front of this subcommittee beating 
you up hourly instead of just every month or 2 or 3.
    Talk through that, if you would.
    Mr. Grob. I think we just still need to keep beating the 
drums here. I think that it is the last part of the game now, 
and it is going to require a full court press to make it 
happen. The respondents all said they will be ready, and I 
certainly think they can be ready. The question now is simply a 
matter of getting ready. And I think the process right now 
isn't that hard. I do agree that the Food and Drug 
Administration and others have done a good job of providing 
tools for people to be ready.
    And I must say, with respect to the health care industry, I 
really have to point out that the various provider groups that 
are mentioned in my testimony did help us with the survey. They 
did encourage their members to respond. We even got responses 
from people we did not send the surveys to, I think as a result 
of their doing that.
    Mr. Brown. Their umbrella organizations, the associations.
    Mr. Grob. Exactly, right. So we appreciate their help in 
doing this. And there is a lot going on.
    I just think that there might be some complacency, maybe 
some insensitivity or lack of understanding, and perhaps this 
hearing and just everyone continually beating the drum on this 
should be the case.
    As far as the readiness is concerned, the testing we are 
talking about, the real world testing is going to occur on 
January 1, 2000. There is just no need to wait until then. It 
can occur earlier than that. It is just, I think, a matter of 
doing it. The tools are there, it can be done.
    Mr. Brown. Mr. Willemssen, do we have enough information to 
be able to predict if we will have failures? And will we have 
enough information if we do not know?
    Mr. Willemssen. I think the more that we've got into this, 
especially in these key sectors, and as the unknowns intensify, 
the uncertainty also increases. One thing that we've done when 
we do surveys is we have been a large proponent of publicizing 
the names of non-respondents. When we did surveys, for example, 
on 25 large school districts, the 21 largest cities in this 
country, and State surveys, we have told the respondents that 
you are free to respond or not respond, but we are going to 
publicize that fact one way or the other.
    The response rates for 25 school districts were 100 
percent, for the 21 largest cities, it was 100 percent, and for 
all States, all States responded except one. In my opinion, 
letting them know in advance that if they don't respond we are 
going to publicize the information has been a crucial factor in 
enhancing the response rate.
    Mr. Brown. Are you confident that of the failures that 
perhaps are inevitable, at least some number of them, in the 
types of equipment, that where there might be failures, are you 
comfortable that there will be at least, that we will not see 
critical failures that might cause death or severe injury in 
equipment where that might happen?
    Mr. Willemssen. I am more comfortable of that today, 
actually, than in the May hearing, because of the efforts FDA 
has undertaken with the critical high-risk devices, and the 
work that it has done at selected manufacturers. This gives us 
a higher degree of comfort for those critical care and life 
support items. So I actually am more optimistic today on this 
particular subset.
    Mr. Brown. One last question real quick, Mr. Chairman, if I 
could. What grade would you, A meaning they have absolutely 
done things right, F meaning they have absolutely done nothing 
right, what grade would you give the provider community 
regarding their Y2K readiness?
    Mr. Willemssen. Incomplete.
    Mr. Brown. You have to do better than that.
    Mr. Willemssen. If I had evidence on what the data showed 
in terms of preparedness, I think I would be in a position to 
give a grade. But the biggest compelling factor is unknown.
    Mr. Brown. But if it is incomplete on December 31, it is an 
F.
    Mr. Willemssen. Well, it depends on who is incomplete. 
Those providers may know very well where they stand, but they 
choose not to provide the information to others.
    Mr. Brown. Okay, thank you.
    Mr. Upton. We will just adjourn temporarily here until Mr. 
Greenwood comes back, and he can continue the hearing. We have 
to go vote.
    [Brief recess.]
    Mr. Bilirakis. This was a general vote, a very important 
vote.
    I believe it is Mr. Bryant's turn to inquire. Please 
proceed, sir.
    Mr. Bryant. I thank you, sir.
    I think Mr. Willemssen and Mr. Grob, to some extent, well, 
not to some extent, very extensively, in Mr. Grob's testimony, 
talked about the testing issue. That is something that is very 
near and dear to my heart, because I have constituents who are 
in the hospital business come up to me and say, well, should we 
test these or not. And our lawyers worry about that, because if 
we test it, then maybe we are making ourselves more liable if 
something should fail. Or on the other hand, if we do not test 
it, are we also making ourselves liable if we do not test it.
    And that is an issue that will have to be decided outside 
of these four walls at some point. But the liability protection 
bill that we passed for Y2K purposes does really concern the 
two parties to the contract, and whether the computer works or 
not, the microchip or whatever.
    But the third party lawsuits and the potential that we are 
not dealing with just business records or just in commerce 
documents, but we are dealing with human lives, potentially, 
here, concerns me. So let me turn to the FDA if I could and ask 
you, I see a very clear cause of action to an injured third 
party, a patient that is in a hospital or a patient that has 
some sort of device that FDA has approved. And if it is not Y2K 
compliant, I see some lawsuits here.
    Beyond the lawsuits, though, what is FDA's role, and what 
has it been in identifying last year or 2 years ago that, hey, 
there are some problems here, and before we give the FDA stamp 
of approval, it has to be Y2K compliant. Because again, some of 
these devices you have approved could affect a human life 
dramatically. Were those steps taken a year, 2 years ago, 3 
years ago, when this Y2K issue came up? Were they taken to 
ensure that everything you have approved the last several years 
since this issue has been identified, does the FDA stamp of 
approval mean that they are Y2K compliant, and if it does not, 
why not? What assurance is the FDA approval if it is not Y2K 
compliant?
    I might also add, why was it not done if it was not done, 
but is it being done now, and is there any effort to, once you 
have identified these problems, to recall these things before 
we have people injured or die as a result of this?
    Mr. Shope. There are a couple of pieces to that, let me try 
to work our way through those. First of all, we began to pay 
attention to the Y2K issue around the middle of 1996, in terms 
of raising the issue in the agency and saying, we need to pay 
attention to the impact of this issue on devices. At that 
point, we discussed with our pre-market review staff the need 
to pay attention to this issue in terms of new submissions.
    But I have to say that technically, a manufacturer could 
today even bring a product to market that was not Y2K 
compliant. Let me give you an example of what I mean by that. 
If that product is accurately described in labeling, if the 
user instruction accurately describes the manual operation that 
needs to be done, say, on Leap Year day, to reset the clock, 
and that is acceptable to the purchaser in terms of, I can buy 
a product that is described like that and make it work, then 
there is not a requirement that devices coming to market now be 
Y2K compliant.
    There is a very small chance that manufacturers are going 
to bring a product to market like that and we are not seeing 
manufacturers bringing us products that are not Y2K compliant. 
But if a manufacturer, say a small company, has a product that 
has been on the market for several years, he is developing a 
fix that his next model will have, but it is a very minor kind 
of a problem, he would be free, under our approach right now, 
to relabel, to basically change the labeling and the 
description of that product to lay out clearly the non-
compliant nature, the small non-consequential kind of problem 
that it has, and the user actions necessary to repair that and 
continue to market the product like that.
    Mr. Bryant. Let me stop you real quick. The user actions to 
reset that on the Leap Year, on January 1, are you expecting 
the patient to, if it is an implant, I mean, we're not really 
talking about that?
    Mr. Shope. No, there are no implants that are affected by 
the date problem.
    Mr. Bryant. Are you expecting a patient to affect a medical 
device, or is the doctor supposed to tell him, you'd better be 
back in here on midnight, so I can test you?
    Shope. No, no. We are talking about typically displaying 
the correct date, and that is all the device does. The 
manufacturer would have to go through a risk analysis to 
evaluate any risk associated with this date non-compliance, not 
a regulatory non-compliance. And if he can come to the judgment 
that the non-compliance presents no risk to the patient, no 
additional risk, no change in the impact on safety or 
effectiveness of the device, that is the condition under which 
this non-compliant product could continue to be marketed.
    I think it is only the rare circumstance of manufacturers 
who have an existing product that has a very minor problem, and 
they would like for the economic reasons to continue to produce 
that product, and buyers are willing to buy it under those 
circumstances, then that would be possible. But the vast 
majority of manufacturers have already corrected their 
products, and that is what they are selling now. They are not 
selling the product that still has a problem. They developed 
the fix, and their current models have the fix available.
    There are some manufacturers that have identified a Y2K 
problem that is a very minor problem, and they have told their 
customers, this product has a problem, it is minor, we are not 
going to offer a fix, live with it, basically. You can, it does 
not introduce any risk to patients. It means the date printed 
or displayed is not correct.
    Let me also add, maybe I can put a little bit of context 
here, a number of the large hospital systems that we have 
talked to about their Y2K efforts, investigating their products 
and remediating their products, we are talking about very large 
systems that have hundreds of thousands of medical devices. 
Several have told me personally that, we have not identified 
any product other than one or two types in our entire inventory 
that would put a patient directly at risk due to a Y2K problem.
    The radiation treatment planning systems are well known. 
There are a few models of the older types of those systems that 
do need to be replaced, they could lead to inappropriate 
radiation therapy. But as far as devices that fail and their 
direct failure having a direct impact on patients, we are just 
not aware of devices that present that kind of a problem due to 
Y2K that would warrant FDA immediately taking the kind of 
regulatory action that we can take in those circumstances when 
there is an immediate risk to patient health.
    So there are certainly a lot of computer-controlled 
systems, record keeping is done, but devices that use dates and 
calculations that present a problem if that date calculation is 
inappropriately done, the manufacturers have addressed, have 
identified those, have provided fixes, and the hospital, the 
user of those types of products have to avail themselves of 
that upgrade in order to continue to use the product.
    Mr. Bryant. Mr. Chairman, I see my time is up, and I will 
not ask for additional time. But I would hope that GAO and HHS, 
if they get a chance to comment during the answering of other 
questions, they might comment on that, too. I think that is 
very important. Thank you.
    Mr. Bilirakis. It is important. We will recognize Mr. 
Greenwood at this point, and hopefully get to that.
    Mr. Greenwood. Thank you, Mr. Chairman.
    I would like to address a question to Mr. Hubbard, if I 
might. Would you describe for this panel the type of 
information that FDA has with respect to individual specific 
devices, either through product approval applications or 
through reporting and accountability requirements, pursuant to 
FDA's quality system regulation about specific devices, and 
then the follow-up question is, do you need more information?
    Mr. Hubbard. I think that is a better question for Dr. 
Shope, if you do not mind, Mr. Greenwood.
    Mr. Greenwood. All right.
    Mr. Shope. We have basically two types of information I 
would characterize. One is our registration and listing 
database, which is manufacturer supplied information that tells 
us who is in the business of making medical devices and the 
types of products that they make. This is the basis for our 
inspection program, knowing where the factories are and what is 
made at those factories. The second kind of information we have 
is the premarket approval submissions that come in from 
manufacturers, that are the information that describes the 
products in terms of their safety and effectiveness for the 
premarket notifications, their substantial equivalence to 
existing devices, or for pre-market approval applications, the 
more detailed scientific and technical data that show their 
safety and effectiveness.
    Mr. Greenwood. Let me interrupt you for a second. Has FDA 
ever required that in those submissions, there be Y2K specific 
information?
    Mr. Shope. Oh, yes. If it is the kind of device currently 
that would be relevant, that is certainly a question that is 
asked during the review process.
    Mr. Greenwood. For how long has that been the case?
    Mr. Shope. Since mid-1997 I would say.
    Mr. Greenwood. Okay.
    Mr. Shope. But we also, I have to point out, to be clear 
about it, there were some products that came to us in 1997 that 
the manufacturer had in development for several years, and they 
said, this product is not Y2K compliant, but we will have an 
upgrade by 1999 that will be, and we will provide that at no 
cost to the users. So there was no reason in the marketplace 
sense to deny that firm access to the market for that product.
    So we did make a few of those types of decisions, but not a 
large number of them.
    In terms of our database, we do not get, in our record 
keeping system in a computerized fashion, access to information 
readily available about, is the device computerized, what is 
the type and nature of that computerization. So that is not 
readily available to us from a database type approach. We have 
to rely on the manufacturers to tell us, I make this kind of a 
product, and it is computerized in some sense.
    Mr. Greenwood. Do you feel you need that information?
    Mr. Shope. I am not sure how we would use that thorough or 
detailed information, the staff to stay on top of that kind of 
information I think would be a challenge. I think when we have 
a specific----
    Mr. Greenwood. Do you think there is any risk to the public 
because you do not have that information?
    Mr. Shope. No, sir, not currently. Because any time there 
is a specific device that has an issue, we do have the complete 
description that we can go to and hone in on it. When we have 
had this question of all devices all at once, it has been a 
challenge. And then we relied, going back to the manufacturer, 
who best knows the device, to give us that information.
    Mr. Greenwood. Does that complete your response, sir?
    Mr. Shope. I am trying to remember if I covered all your 
points.
    Mr. Greenwood. Let me address a question for Mr. Grob. In 
your opinion, who is in the best position to determine whether 
a device will be impacted by the Y2K issue? As you know, FDA 
and the device manufacturers on our second panel are very 
concerned about hospitals conducting independent validations on 
equipment. How do you respond to the concerns raised by FDA and 
the device manufacturers?
    Mr. Grob. I think, this is an opinion, it is not a legal 
opinion, it is a personal opinion, because I have not delved 
into the liability issues. My work was restricted to the 
surveys and related issues. But my opinion is that it is the 
provider that is in the best position to know whether the 
equipment works. Because they are going to know on January 1, 
2000, no matter what happens in between, they are going to know 
on that day.
    There is not any reason why they do not know before then, 
not a good reason. The information is generally available, so 
they should just find out and get ready.
    So I really think that is where the knowledge ought best to 
be. I think you asked me a second question.
    Mr. Greenwood. How do you respond to the concern that the 
providers may not have the expertise to validate in advance? 
You certainly do not know if the lights go off on January 1.
    Mr. Grob. Right. I think this is probably the most 
important distinction that is coming about as a result of the 
survey work that we did and the discussions that we are now 
having. I think that there was quite a bit of policy discussion 
as to who should be responsible for the testing of the 
equipment. And both FDA and the manufacturers were coming on 
the side that that should properly be done by them, because of 
the need to carefully calibrate it, and----
    Mr. Greenwood. By them, you mean?
    Mr. Grob. The manufacturers.
    Mr. Greenwood. By the manufacturers.
    Mr. Grob. I do not disagree with that at all. I have to 
defer to them on that matter, as to the proper procedures for 
testing.
    What I am trying to focus on is the testing that has to 
occur in real life. Let me give you an example, if I can. There 
was one piece of equipment that was listed on the FDA web site, 
and it reported that it was a minor problem, because the date 
would be displayed, but it was okay, it was two digits and 00 
would mean year 2000, in other words, it was not incorrect, it 
was not calculating wrong, everyone could understand that, but 
you just needed to be alerted to that.
    They then added the following caution: however, if you 
connect this piece of equipment to another computer in your 
outfit, and the date is processed by that computer, you really 
do not know how that computer is going to process the two-digit 
date that it gets, because that equipment may not be ready or 
it may not be used properly. So they now caution the provider 
that you need to check that out for yourself to make sure that 
is okay.
    It is that kind of testing that I am talking about, it is 
when you write in to the manufacturer to get your free upgrade, 
you have to get it, you have to install it, you have to shake 
it down. So perhaps the word testing means different things to 
different people. In the way that I am using it, I certainly 
mean it in the terms of what I would call real life testing.
    Mr. Bilirakis. The gentleman's time has long expired.
    Without objection, we will give an additional 2 minutes to 
Mr. Bryant. Well, before we do that, is there somebody else 
here? Mr. Brooks?
    Mr. Barrett. Thank you, Mr. Chairman.
    I Just have a couple of questions. Mr. Willemssen, maybe 
you can help me out. After looking at a lot of today's 
testimony, I am still not sure that I have a precise picture of 
what it is we want both the regulatory agencies, FDA and the 
device manufacturers to do to ready themselves for January 1. 
If you could, what two or three major recommendations would you 
make to the FDA at this point, and why?
    Mr. Willemssen. One is for those manufacturers who provide 
links to their web sites. FDA should request that these 
manufacturers provide detailed information on product make and 
model information. Second, FDA is in the process of putting 
together a report on the efforts that it has undertaken on 
critical care and life support devices. I believe that report 
was initially expected to be out October 1. It is not out yet.
    FDA needs to commit to a date as soon as possible, so that 
the American public can get a sense of what level of risk there 
is on those critical care and life support items. In addition, 
as part of that effort, I would publicize all 803 manufacturing 
sites. I would publicize the names of all 325 that were in the 
initial sample. I would publicize and disclose those who 
decided not to participate in the exercise. We have a few other 
suggestions, but those would be among the most important ones.
    Mr. Barrett. What about the device manufacturing industry? 
What recommendations would you have for them?
    Mr. Willemssen. I think it fair to say that I come out a 
little bit in between the Inspector General and FDA. I think 
from a provider perspective, the first thing you have to do is 
go back to the manufacturer and see what the manufacturer is 
saying.
    In many cases, the manufacturers are providing details on 
their web sites, on how to go about testing the equipment, 
including testing hook ups to other equipment. I am a little 
reluctant for providers to just go out and test without having 
that kind of information in hand. The ideal is for a 
partnership between manufacturer and provider to test in a real 
operational environment. This will give you the best result.
    Mr. Barrett. What about the users, the hospitals, the 
doctors, nursing homes? Are there things they should be doing 
now? What would recommendations would you have for them?
    Mr. Willemssen. I would certainly hope that they have 
already taken these steps. But if they have not, they obviously 
need to know what they have in their inventory. They need to 
match that inventory up against available information from 
sources such as the FDA clearinghouse. Then, based on that, 
look at what their critical care and life support items are and 
what kind of steps they need to take to assure themselves that 
these are going to work as expected. Those steps could entail 
independent testing on their own, or asking manufacturers to 
give them their own independent test results.
    Those are the kinds of steps that should have been taken by 
now. I fear in some cases they may not have been taken by some 
providers.
    Mr. Barrett. Do any of the other panel members want to 
comment on any of the suggestions?
    Mr. Grob. Yes, I do. I just want to clarify, there is no 
disagreement in policy regarding testing at all. I have never 
advocated and I am not advocating now that the providers 
substitute their bench testing for that of the manufacturers. 
The way Mr. Willemssen put it is exactly what I would agree 
with. The providers need to get the best information they can 
get, which probably is initially going to come from the 
manufacturers, then they have to absorb it, and then they need 
to make sure it works in their setting.
    Mr. Barrett. I would yield back my time.
    Mr. Bilirakis. If you would yield. Well, here it is again, 
near the end of the year, and we are about to finish up in 3 
weeks, who knows. I am not sure that God knows.
    Mr. Upton. He does know.
    Mr. Bilirakis. He does know? He has not told us.
    But the thing is, is there anything that we can do at this 
point in time, yes, the providers have the equipment and I 
have, I think we all have a sense of confidence in providers 
that they want to practice good medicine and they care about 
these things. The thing that concerns me is the lack of 
responses from the hospitals regarding your survey.
    So is there anything that we can do to help FDA, to do this 
job better, considering that our session is virtually over, and 
by the time we get back in again, it will be after January, or 
after the end of the year? Mr. Hubbard, can we help you in any 
way? I know you are concerned about it, on top of all your 
other responsibilities, you have this, too.
    Mr. Hubbard. Mr. Brown was talking earlier about the poor 
response rate from hospitals, and he is absolutely right. I 
will say that from the manufacturers, we have almost 100 
percent response rate. So we have very good information about 
what the manufacturers have done.
    The providers, the hospitals, do need to avail themselves 
of the information. As a legislative body, I do not know how 
you help make that happen. But the hospitals and other health 
care providers do need to seek out that information and make 
sure that the devices they have in their institutions are 
compliant, or if they are not, they need to go get the fix and 
get it put into their device. That seems to be the challenge, 
given the response rates that the others have been receiving 
from those providers.
    Mr. Bilirakis. Thank you.
    Mr. Upton to inquire.
    Mr. Upton. Thank you, Mr. Chairman. I do not know if my 
comfort level is getting better or worse from the hearing that 
we had last spring. I thought that this was certainly a good 
topic. I visited with a number of my providers, both private 
practitioners as well as device manufacturers as well as 
hospitals, and asked the Y2K question almost everywhere I went.
    And I use the analogy, I have a smart little daughter. She 
is a sixth grader, she is very honest and she is very smart. 
And my guess if that if her science teacher asked her if she 
had done her homework, asked everyone in the class if they had 
done their homework or not, excuse me, if the teacher asked, 
did any one of you not complete your homework, probably some 
people in that class might not raise their hand, particularly 
if they knew that the teacher was not going to check.
    And Mr. Hubbard, as I listen to you, you just indicated 
that you had almost 100 percent compliance, I look at 132 
providers who are on the internet, never responded at all. I do 
not know if anyone has gone to their door and said, did you do 
your homework or not.
    At the beginning of your testimony, you indicated, and I 
did not write it down word for word, but you said that no, 
there were no manufacturers with high concern, in essence, not 
a single one. Yet Mr. Willemssen in his testimony a couple of 
minute later said, in fact there was one major device 
manufacturer, is that not correct, who you identified this 
week, and they told that to the FDA, is that not right, Mr. 
Willemssen?
    Mr. Willemssen. There is one that FDA informed us of as 
part of their evaluations and assessment.
    Mr. Upton. If I may, I would like to defer to FDA on the 
naming of that particular organization.
    Mr. Upton. Mr. Hubbard?
    Mr. Hubbard. Under your act, we have promised these groups 
not to reveal information about these. Is that something 
perhaps we could talk with the committee about privately?
    Mr. Upton. I will accept that, but does that not contradict 
what you said in your statement?
    Mr. Hubbard. First of all, Mr. Chairman, I was focusing on 
the firms that really matter here, the priority firms, those 
that make very important products that if they fail could cause 
harm, drugs that if not available could not be available 
elsewhere. The 132 you are referring to, if I am correct, and I 
will ask Dr. Shope to elaborate, are firms that we have not 
been able to find. We do not think they exist.
    There was a much larger number of those that never 
responded to us, the addresses were wrong or whatever, they 
come from a registration system that we employ at FDA, but it 
depends on the manufacturer----
    Mr. Upton. Can you put an APB out on these folks? I mean, 
they had a place at one time that certainly maybe still today 
employ people, and they have a manufacturing site, and their 
equipment is all licensed.
    Mr. Hubbard. We do not believe they exist. If Dr. Shope 
would like to elaborate.
    Mr. Shope. Well, that is partially right for some of them. 
Some of them----
    Mr. Upton. We do not have the addresses for any of these?
    Mr. Shope. We have diligently tried to contact all of those 
folks. There are some there that are definitely, clearly out of 
business. They were out of business in our database when we 
started. We were not fine enough in our filtering of our 
database to eliminate those. When we went out with the broad 
brush for 13,000, we tried to get everybody. We tried to be all 
inclusive and not miss any potentials. So we knew that our 
database was not perfect.
    There are also people on that list who are only 
distributors of devices, they do not make anything. There are 
also manufacturers on that list who probably make no computer 
products, and we have looked at that list carefully. There is 
not really a strong incentive for them to respond to us. We 
have not sent inspectors to each door, but we have looked at 
the list, looked at who the manufacturers are, what kinds of 
products they make, and there are not areas of large concern 
there for us.
    Mr. Upton. Well, Mr. Willemssen indicated in response to a 
question by Mr. Bilirakis that he thought that the FDA should 
be responsible in making sure that those manufacturers would 
follow up, and that the FDA should be responsible to make sure 
that in fact that happened. Do you feel that you are 
responsible for their actions, and have you thought about 
recalling any of their products for those that may not fit that 
definition?
    Mr. Shope. We do not know of any of those manufacturers 
that have products that would raise any kind of concern that 
would lead to the situation of a recall. We also have to say 
that we have not heard people saying to us, we can't find this 
firm, there is no information available about this product. In 
general, we hear that for a few firms, and I know of several 
where they have not been real cooperative. But they do not make 
a kind of product that would fit the risk of a high-risk device 
that would warrant a recall. They are the aggravation kind of 
Y2K problems that the firm has not dealt with.
    So I do not have a lot of concern about the firms on that 
list. We will continue to look at them as we finish our work 
with this list to make sure there is nobody there that makes 
the kind of product we will be concerned about.
    Mr. Upton. If I can just ask one quick follow-up to my 
initial question, were there other manufacturers, other than 
this one firm that Mr. Willemssen indicated that you all knew 
about that you did not mention in your testimony, is it only 
one?
    Mr. Hubbard. Yes, Mr. Upton. The audits were very 
intensive. They lasted three or 4 days. They were done by very 
skilled IT professionals, and they were very intensive.
    This one firm had some lower documentation than this very 
high standard required. So when the auditor reported back to us 
that they had concerns, we then sent FDA investigators to the 
firm who did a full examination under FDA's legal authority. 
They found that the firm had adequate contingency plans, that 
the firm was attending to the problems, and that there were no 
serious health concerns here.
    There were some documentation, other paperwork concerns, 
that caused the auditors to flunk them, as it were, but the 
subsequent inspection has given us confidence that that firm is 
not truly a problem. However, we will continue to watch that 
firm as well.
    Mr. Upton. I yield back my unexpired time.
    Mr. Bilirakis. Without objection, the Chair yields an 
additional minute to Mr. Bryant to get a couple of responses he 
was looking for.
    Mr. Bryant. Thank you, Mr. Chairman. I am kind of like Mr. 
Upton, I am not sure whether I feel better or worse after this 
hearing. But I do get a general sense that perhaps the 
Inspector General and GAO do not feel as comfortable as the FDA 
does on this matter, that maybe they feel it is a little worse.
    Just very quickly, I might ask, I think maybe I will cover 
the answers a little bit more than I asked for. Very quickly, 
Mr. Grob, if you can tell me, do you pick up what I pick up 
nationwide, what I pick up in my district, the concern from the 
providers of whether or not to test these devices, and so 
forth, because of liability? It seems to me the stronger case 
is if you do not do anything, you are better off than if you 
test it and then it goes bad. It seems like from a lawyer's 
standpoint.
    But is that concern out there? Do either one of you at GAO 
by any chance hear that?
    Mr. Grob. Let me address that in a variety of different 
ways. First of all, with regard to liability, the reason we did 
our report anonymously, and we did talk to this committee about 
that, which we also did the first time, was so that we would 
get a good response rate. We had been told that people were 
reluctant to even respond to our survey by name, if they were 
to be advised that maybe some answers they gave could create a 
liability problem for them.
    So we used this approach, and actually, it turned out to be 
effective. Our response rates are nowhere near what we want 
them to be, but they are still double or triple what most 
surveys in this arena get. So at least it gave us a bigger view 
inside than before.
    So I think liability was certainly, that was evidence, I 
think, that the liability was on people's minds. Again, I am 
really guessing here now, I will venture a bit of one. I think 
the liability matter was more of an issue earlier. Because 
according to our survey, the hospitals particularly seemed to 
be doing a lot of testing. Those that did respond seemed to 
have a pretty ambitious program.
    And where they report now, no change, even a slight dip in 
the overall readiness of all their equipment, their answers to 
other questions indicate that the hospital industry seems to be 
pretty systematically checking everything out and doing things 
other than just relying on the manufacturer. They seem to be 
relying on their own actions as well.
    So that does actually inspire a lot more confidence. The 
hospital industry has the biggest problem. They have the most 
and the most sophisticated equipment. And they seem to be most 
methodically going after it. Perhaps in some of the other 
groups there may be more complacency among say, nursing homes, 
home health, physicians, durable medical equipment 
manufacturers, etc., on this matter.
    So what I really see now is just a matter of keeping up the 
intensity of the effort right now, of making the full court 
press, here in the last quarter of the year.
    Mr. Bryant. Mr. Hubbard, very quickly, of the 80, I think, 
contractors you assessed, some 14 were located in other 
countries, 8 other countries. How about those foreign 
manufacturers?
    Mr. Hubbard. They were also visited. We actually sent 
auditors to those firms in those countries and did the same 
audit we did for domestic firms. And they had to meet the same 
high standard.
    Mr. Bryant. And they passed?
    Mr. Hubbard. Yes.
    Mr. Bryant. Good. Thank you, sir. Thank you, Mr. Chairman, 
for your generosity with the time.
    Mr. Upton. You are very welcome.
    Mr. Brown has a couple more questions.
    Mr. Brown. Just one more question, Dr. Shope. I sit here 
and as the hearing evolves, I went from a good deal of 
confidence to less confidence as I have listened for the last 
1\1/2\ hours or so. I am really perplexed by this whole 
situation, first of all, the lack of response to surveys that 
you have issued, asked people to return, that you have too 
little information, that there is an incomplete score card in 
Mr. Willemssen's response. And from Mr. Grob's comments, that 
there is just little experience in how this will work in the 
real world.
    So for some senior citizen or anybody for that matter 
listening at home to this or watching this at home, I have to 
think they are very confused about all of this. And then Dr. 
Shope, I hear you say that you are confident that there is not 
going to be serious injury or death from any piece of equipment 
that might not function the way that it should because of Y2K.
    Assure me, if you would, why that will not happen.
    Mr. Shope. My opinion is based on the kinds of products 
that have date problems and the nature of those date problems, 
and that those kinds of failures will not directly impact the 
patient directly or immediately. The vast majority of the Y2K 
problems we are talking about have to do with record keeping, 
historical records of what the device did as opposed to being 
involved in the device functionality.
    There are certainly, though, some devices that do use dates 
and computer calculations. It is a rather small number of 
devices where that is true, and those have been well addressed 
by their manufacturers. Those are the kinds of manufacturers 
who have communicated to each and every one of their customers 
about the issue, and in many cases have provided free upgrades 
because of the risk associated with this, the manufacturer 
wants no liability that they have left any stone unturned to 
address this issue.
    So I think it is the cooperation between the industry 
recognizing their exposures to other than just FDA that has 
given this kind of a problem the kind of attention it needs.
    I think the industry has well responded to this issue. If 
there is a place that continues to need attention and concern, 
I think it is the health care facilities that need to complete 
their assessment.
    Mr. Brown. Exactly. Mr. Grob, what you said, and this is my 
last question, Mr. Chairman, you talked about, Dr. Shope just 
mentioned that the manufacturers have worked out all the 
problems potentially in his opinion. But you had talked about 
the interaction between two computers. One is Y2K ready, the 
manufacturer or maybe the health facilities is not, one of 
those health facilities that is not responding to your 
questionnaires or your surveys.
    Are you concerned about the issue of some serious injury 
because of that interplay?
    Mr. Grob. I just do not know about how serious it would be. 
And for that, I really have to defer to FDA about the nature of 
the equipment. Again, I think it is true that most of the 
problems that are reported on the internet are primarily the 
reporting of data, or the reporting of dates, which could be 
inaccurate. Sometimes that reporting of dates can affect the 
way the equipment functions or some of it may not function at 
all, because the computer cannot figure out the date, and they 
actually report some gibberish there.
    But whether or not any of that will relate to a serious 
health problem for an individual, I simply cannot address that. 
My sense from what FDA is saying is that they do not see any 
evidence of that.
    It is just that you do not know, and there is not any 
reason not to know. It is a fairly straightforward matter, I 
think, to just try it out. That clearly is just something that 
should be done.
    Mr. Brown. Mr. Willemssen, do you have an opinion on that?
    Mr. Willemssen. Only to say, as I briefly mentioned, I 
believe on the high risk devices, I am more optimistic now than 
I was in May. This is because FDA is taking additional efforts 
that it originally did not plan to take, and it will have 
additional independent evidence of where those manufacturers 
are.
    Mr. Brown. Okay, thank you. Thank you, Mr. Chairman.
    Mr. Upton. Thank you.
    I have just a couple of questions, and I would like each of 
you to respond to this. This sort of goes to the heart of the 
concern by all members on this committee. It is my 
understanding that the FDA identified 803 manufacturers with 
potentially high risk devices. And in an effort to see where 
things were, identified 325 of those trying to do a random test 
to see exactly where things were.
    Of those 325, 197 had no computer chips, so everything is 
fine, scissors, whatever it might be. Eighty of them said yes, 
but we are okay, 80 of those said yes, we do have a computer 
chip. Eighteen were duplicates. I would subtract that as well. 
Four did not respond at all. And 26 said, we are not telling. 
We are not going to participate. And going back to my student-
teacher analogy, that student would probably be sent down to 
the principal's office. But 26 said, we are not going to say 
yes or no, we just ain't saying.
    And I just, you know, as we look for the comfort level 
here, January 1 is not all that far down the road, we are all 
sort of figuring out where we are going to be that day. Mr. 
Grob, what is your comfort? Knowing those stats and knowing 
that is about a little less than half the sample, do you think 
everyone has done their job on this?
    Mr. Grob. You asked me that before and I changed my mind on 
the answer.
    Mr. Upton. You know, on one hand, on the internet, some of 
these, a lot of these maybe have shut their doors. But at the 
same time, we have a number of firms who are not on the 
internet, nobody knows, maybe FDA knows for sure, but other 
folks do not know who these manufacturers--and they have 
already been identified as high risk device manufacturers.
    Mr. Grob. Could I add some speculation to the survey work?
    Mr. Upton. Sure.
    Mr. Grob. My speculation would be that in a hospital 
setting, the hospitals would be pretty sensitive to the 
equipment that could cause harm if they did not check it out. 
Really, really big harm. So I think that alone would be a good 
force that would help people to check it out.
    I think for other things they are trying now to get it all 
checked out, and that is a big logistical problem for the 
hospitals. But I do think that generally they are trying to do 
that. Although I do detect, myself, some complacency that is 
unwarranted in that regard. I think in the other provider 
groups, I detect much more complacency, or a feeling that 
someone else will take care of it, when I don't think that 
really will solve the problem.
    So my report card, I would have to do like in history and 
math have different grades, I would give the hospitals maybe a 
B, others C, D, depends on the question.
    Mr. Upton. Or do not know if they turned in their homework?
    Mr. Grob. Or don't want to answer the question as to 
whether they have done their homework, right.
    Mr. Upton. Does not work for my sixth grader.
    Mr. Willemssen. I will go back to what I mentioned a little 
bit earlier, in that I think FDA should name the names of the 
803 sites, name the names of those who declined to participate.
    Unfortunately, FDA should have let them know that in 
advance. And I would guess that they would have had a lot fewer 
declinations than they did if they had let those sites know 
that they were going to publicize what the response was.
    Mr. Upton. Now, in your own investigation, do you know who 
these 26 firms are?
    Mr. Willemssen. Yes, we know who the 26 are.
    Mr. Upton. Mr. Hubbard, I came to you last by design.
    Mr. Hubbard. Let me say, Mr. Chairman, that all of those 
firms, those 325 firms, have reported to the FDA web site, the 
clearinghouse. So we know what devices they have that are 
compliant or non-compliant. So it is not like there are 
unknowns.
    Most of them ask not to be given an audit because of 
various reasons, they were trying to get their Y2K work 
completed and other things. And those reasons may have been 
very legitimate.
    However, we still are looking at those firms to make sure 
they do not make products that are of concern, and if we find 
that there are some that could be a concern, and they still say 
no, they may get a visit from an FDA investigator who, as you 
know, has legal authority to enter that firm and do a full 
inspection. So we are not really concerned that those folks 
will not get a look.
    Mr. Upton. Have FDA inspectors actually gone to any of 
these identified 26 firms?
    Mr. Hubbard. So far, we have reached a level of concern on 
only one firm that triggered an inspection by an investigator. 
All the other work has been done by IT professionals contracted 
just for the Y2K work.
    Mr. Upton. Okay, well, I appreciate, we all appreciate your 
testimony this morning. And I would like to think that none of 
us need to hold our breath very long, coming up to December 
31st. We appreciate all of your work on this and certainly your 
appearance today, and we will move to panel two. Thank you very 
much.
    Our second panel will include Mr. James Benson, Executive 
Vice President for Technology and Regulatory Affairs of the 
Health Industry Manufacturers; Mr. Bruce Horowitz, Director of 
Product Assurance, representing the Medical Device 
Manufacturers Association; and Mr. Thomas Neill, Vice President 
of Corporate Services of Quorum Health Group, representing the 
American Federation of Health Systems.
    As you heard from the first panel, we have a long tradition 
of taking testimony under oath. Do any of you have objection to 
that?
    [Witnesses respond in the negative.]
    Mr. Upton. And under House and committee rules, you have 
the right to have counsel with you. Do any of you desire to 
have counsel?
    [Witnesses respond in the negative.]
    Mr. Upton. If you would stand and raise your right hand. Do 
you swear to tell the truth, the whole truth and nothing but 
the truth, so help you God?
    [Witnesses respond in the affirmative.]
    Mr. Upton. You are now under oath. And Mr. Benson, as you 
also heard, your testimony is made part of the record in its 
entirety. We had pretty good compliance with the 5 minute rule 
with this little clock, and if you could continue that, we 
would appreciate it. Thank you.

  TESTIMONY OF JAMES S. BENSON, EXECUTIVE VICE PRESIDENT FOR 
      TECHNOLOGY AND REGULATORY AFFAIRS, HEALTH INDUSTRY 
   MANUFACTURERS ASSOCIATION; ACCOMPANIED BY BERNIE LIEBLER, 
 DIRECTOR, TECHNOLOGY AND REGULATORY AFFAIRS; BRUCE HOROWITZ, 
    DIRECTOR OF PRODUCT ASSURANCE, ADVANCED NEUROMODULATION 
SYSTEMS, INC.; AND C. THOMAS NEILL, VICE PRESIDENT OF CORPORATE 
                 SERVICES, QUORUM HEALTH GROUP

    Mr. Benson. Thank you. I shall.
    Mr. Chairman, or I should say, chairmen, and members of the 
committee, I am Jim Benson, and I am with the Health Industry 
Manufacturers Association. We represent more than 800 
companies, accounting for nearly 90 percent of the medical 
device sales in the U.S.
    I am here today to tell you about the medical device 
industry's readiness to function effectively into year 2000. 
But before I begin, I would like to introduce my colleague, 
Bernie Liebler. Bernie has been responsible for coordinating 
HIMA's Y2K efforts.
    I want to say clearly that the medical device industry 
views Y2K as a serious patient safety issue. The industry has 
invested significant resources assuring that its products will 
function safely. We are confident when we look back on New 
Year's Day 2000, medical devices will have provided their usual 
high standard of reliability and service.
    FDA has just reported the results of their study in which 
they reviewed company processes for evaluating product Y2K 
compliance. The participating HIMA members viewed the study as 
a valuable third party assessment of their work. We believe 
this program demonstrated that the device industry has taken 
effective action on Y2K and that the industry and FDA will work 
cooperatively to ensure the safety of products and patients 
into 2000 and beyond.
    Over the past year, I have developed a great appreciation 
for the depth and scope of the various company efforts to 
address the Y2K issue and avert any problems in both products 
and operations. In mid-summer, HIMA published a member survey 
that reflects this dedication. All of the companies in our 
analyzed sample predicted that their products, production 
systems and supply chain systems would be ready by year-end. 
The total annual domestic revenues of these companies was $47 
billion, while the total domestic revenue was about $60 
billion.
    They predicted an aggregate Y2K investment of $700 million. 
The members of the industry understand their obligation to 
protect patient safety. The device manufacturers' goal is to 
enhance patient care. Y2K is a unique event, but the industry 
has addressed it with the same directness and dedication that 
it applies to all patient safety issues.
    I want to take a moment and highlight some actions that 
HIMA has taken, along with its member companies to assure Y2K 
readiness. This summer we worked on and distributed the Y2K 
guide that the Oden Group prepared for a coalition of health 
care related organizations, and we will leave a copy with you 
of that. We also worked actively to plan the White House 
roundtable on consumable medical surgical supplies, held in 
early June, and to develop the roundtable final statement 
issued by the President's Council on Y2K Conversion.
    Following the roundtable, HIMA published its own position 
paper, recommending the same business as usual approach to 
year-end purchasing. The industry built its current state of 
readiness on a strong foundation of company participation. HIMA 
worked closely with FDA and the National Patient Safety 
Partnership to make the FDA's Y2K web site the principal 
collection point for year 2000 device compliance information.
    We urge medical device companies to provide requested Y2K 
status information, co-sponsor ads in prominent trade magazines 
and held continuing conversations with FDA and others aimed at 
making the FDA clearinghouse as useful as possible.
    Before I conclude, I want to compliment FDA on their 
fairness and openness regarding Y2K. In particular, I want to 
acknowledge Dr. Tom Shope, of CDRH, whose work has been 
critical to the success of these efforts. I have tried to 
provide you with a current picture of the device industry's Y2K 
readiness, which is based not only on the work of HIMA 
companies, and the device industry as a whole, but on the work 
of many other groups from Government and the private sectors.
    This industry's primary efforts have been directed at 
maintaining patient safety. We are confident that as we enter 
year 2000, events will show that we have succeeded. In the 
meantime, we commit to continue to work cooperatively with all 
parties to ensure that the transition from 1999 to 2000 is safe 
and uneventful.
    [The prepared statement of James S. Benson follows:]
   Prepared Statement of James S. Benson, Executive Vice President, 
    Technology & Regulatory Affairs, Health Industry Manufacturers 
                              Association
    My name is James S. Benson, Executive Vice President, Technology & 
Regulatory Affairs for the Health Industry Manufacturers Association. 
HIMA is a Washington, D.C.-based trade association that represents more 
than 800 manufacturers of medical devices, diagnostic products, and 
medical information systems. HIMA's members manufacture nearly 90 
percent of the $62 billion in health care technology products purchased 
annually in the United States and more than 50 percent of the $147 
billion purchased annually around the world. As such, HIMA is the 
largest medical technology trade association in the world. I am pleased 
to have this opportunity to tell you about the medical device 
industry's Y2k readiness to function effectively into year 2000, most 
frequently referred to as Y2k, and HIMA's efforts to both ensure and 
support that readiness.
    Before I continue, I would like to introduce my colleague, Bernie 
Liebler, HIMA's Director, Technology & Regulatory Affairs. Mr. Liebler 
has been responsible for coordinating HIMA's efforts regarding Y2k, and 
he is here with me to provide his expertise in responding to questions 
that you may pose.
    I plan now to review what we believe are some of the industry's 
more significant activities. Before I begin, I want to say clearly that 
the medical device industry views Y2k as a very serious patient safety 
issue. The industry has invested a great deal of resources to assure 
that its products will function safely into year 2000 and that the 
industry will be able to continue to deliver vital products as the year 
changes. We are confident that when we look back on the change from 
1999 to 2000, medical devices will have provided their usual high 
standard of reliability and service.
    In this context, I would like to add that I believe that HIMA's 
members have done a fine job of responding to the public needs 
surrounding the Y2k issue over the past year and a half. In 1998, its 
members formed a working group to address both the strategic and 
technical aspects of the Y2k issue. Keith Brauer, Vice President and 
Chief Financial Officer, Guidant Corporation, has provided excellent 
leadership as the Chair of the Working Group with the active 
participation of many HIMA member companies. In my testimony today, I 
will reference for you some of the activities that the group has 
undertaken.
                             current status
Voluntary Y2k Program Examinations
    The most recent major activity relating to the device industry's 
readiness is the Food and Drug Administration's (FDA's) Y2k review 
project that examined the Y2k programs of a significant sample of 
medical device manufacturers. FDA undertook this project as a means of 
allaying the concerns regarding medical device readiness that the 
General Accounting Office expressed at a hearing this Committee held in 
May. To perform the study, they hired Battelle Laboratories, a highly 
reputed consulting firm with documented skills in the software area. 
The Battelle representatives examined the processes employed by the 
manufacturers to determine whether a device was Y2k compliant, and for 
those devices determined to be non-compliant, the processes used to 
make them compliant.
    We expect FDA to describe the results of these examinations in 
today's testimony. It is our understanding that the testimony will 
confirm that the medical device industry has done a proper job in 
evaluating its devices and modifying those that required it. We have 
spoken with several of the HIMA members that participated in this 
voluntary program. Each of them described the visit as professional and 
non-confrontational. Overall they believed that the visits were a 
valuable third-party assessment of work in which they had invested 
considerable resources. Needless to say, they were gratified that the 
evaluations of their work were positive.
    Let me describe the role HIMA played in this activity. The 
Association sees one of its major roles as ensuring patient safety. 
HIMA decided that for the Y2k issue, this was best accomplished by 
ensuring that its members and, in fact, the entire medical device 
industry, were aware of their responsibilities related to the issue and 
aware of relevant activities both in the government and in the private 
sector. When we were told of FDA's plans to pursue this program, our 
president, Pamela Bailey, wrote to all HIMA members both to inform them 
of the program and to encourage them to participate in it, if requested 
by the agency. We followed up that letter by initiating and 
coordinating a joint letter from HIMA and other trade associations to 
each of the companies in FDA's initial sample selection, urging them to 
cooperate with the request to permit the voluntary examination of their 
Y2k systems. (We have attached copies of these documents to this 
testimony.)
    Over the past year I have developed a great appreciation for the 
depth and scope of the various company efforts to ensure that they have 
completely addressed the Y2k issue and averted any problems in both 
products and operations. The larger companies have all established 
dedicated Y2k teams charged with handling all aspects of this issue. 
The member company teams have been in contact continuously with their 
vendors, customers, and service suppliers (e.g., utilities, etc.), and 
with their trade associations and relevant governmental bodies.
    Many went beyond simple correspondence to scheduling in-person 
visits with their customers and suppliers and hosting broad-based 
meetings with multiple constituencies to ensure that all aspects of Y2k 
were being properly addressed. They have also been generous with their 
time and resources in supporting HIMA's activities.
    We believe that the successful completion of this program and the 
positive results it generated demonstrate several critical facts:

 The medical device industry has taken effective action on the 
        Y2k issue.
 The industry and the FDA have worked cooperatively to ensure 
        the safety of products and patients into 2000.
 The level of concern over the safety of biomedical equipment 
        is now low.
HIMA Y2k Readiness Survey
    I would now like to move a bit further back in time to mid-summer, 
when we published the results of a survey of the Y2k readiness of our 
members. The survey found that the companies that sell the vast 
majority of medical devices sold in the U.S. expect to be Y2k compliant 
with respect to both their products and their operations. It also 
produced several other salient results.

 The total revenues of the companies in the analyzed sample 
        were $47 billion; total domestic sales of medical devices were 
        approximately $60 billion.
 90% of the companies predicted that their products would be 
        compliant by the end of September. The remaining 10% predicted 
        total product readiness by year-end.
 Almost 70% expected to complete operations planning by the end 
        of September; the remainder expected to finish through the 
        fourth quarter.
 75% expected to complete both manufacturing and supply chain 
        contingency plans by the end of September with the remainder 
        finishing during the remaining three months of the year.
 The companies anticipated spending an aggregate total of $700 
        million by the end of 1999.
    The members of the industry understand fully their obligation to 
protect the safety of the patients they serve. The goal of medical 
device manufacturers is to enhance medical care. Thus, ensuring Y2k 
readiness has been, and continues to be, an integral part of the 
industry mission.
    Besides the industry survey, there were a number of important 
milestones this summer. HIMA also contributed to the completion of the 
Health Care & Y2k Personal Planning Guide. This document was developed 
by the Odin Group under the direction of a coordinating group 
comprising a spectrum of health care-related organizations including 
medical device companies, insurance carriers, pharmaceutical companies, 
trade associations, and others. Several HIMA members also individually 
supported this work. The guide contains clear, common-sense 
recommendations for consumers on how to approach health care issues as 
they relate to personal planning for Y2k. HIMA endorsed the guidance 
and distributed copies of the booklet to all of its member companies 
with suggestions on how they could use it.
    HIMA also represented its membership in working with the American 
Hospital Association and others in developing the final statement that 
was issued by the President's Council on Year 2000 Conversion, and 
signed by its chairman, John Koskinen, and Kevin Thurm, Assistant 
Secretary of the Department of Health and Human Services. The statement 
distilled the results of the President's Council on Year 2000 
Roundtable, Consumable Medical and Surgical Supplies held in early 
June. The statement reflected the meeting consensus that hoarding or 
stockpiling of medical supplies is fundamentally counterproductive and 
recommended following historical ordering patterns based on current 
needs. We devoted significant time to planning this meeting, and two 
company representatives were speakers at the meeting. We believe this 
very useful activity once again demonstrated the cooperative 
relationship between the government and private sectors that has 
characterized our experience with the Y2k issue.
    As a result of the Roundtable, HIMA developed and issued its own 
position paper, Ensuring Patient Access--HIMA Position on Preparing for 
Y2k, which also recommends a ``business as usual'' approach to year-end 
purchasing of consumable medical/surgical supplies. (We have attached a 
copy of this document to this testimony.)
                          other y2k activities
    I have just described to our most recent information on the 
industry's readiness and some of the ways in which HIMA worked to 
support industry's efforts. All of HIMA's work was built on a strong 
foundation of member participation that began in 1998.
Effective Industry Communications
    As I mentioned earlier, HIMA sees one of its roles on this issue as 
a provider of information in support of industry activities. HIMA used 
its Internet site, HIMAnet.com, to provide relevant information to the 
entire industry. To accomplish this, we created a special section on 
the site devoted entirely to Year 2000 issues. We have used this Y2k 
area to publicize the events in which we have participated and to 
promote industry participation in and cooperation with a variety of 
government activities. These have included the FDA's Federal Y2k 
Biomedical Information Clearinghouse, the President's Council on Year 
2000 Roundtable, Consumable Medical and Surgical Supplies, which I just 
discussed, and the Community Conversations suggested by John Koskinen. 
Although the Community Conversations were aimed primarily at providing 
information to the public regarding local facilities and services, we 
recommended that medical device companies participate. We have also 
published a steady stream of articles in our newsletter, In Brief, 
reaching almost 10,000 readers in all parts of the medical device 
industry, including senior executives and the press.
    In August 1998, HIMA formed its Year 2000 Issue Working Group. This 
Working Group's first task was to develop working relationships with 
the National Patient Safety Partnership, the FDA, and any groups 
concerned with the Y2k readiness of electronic medical devices. The 
working group reached out to the Partnership, an important coalition 
comprising the Department of Veterans' Affairs, the American Hospital 
Association, the American Nurses Association, and the American Medical 
Association, among others. The Partnership proposed the development of 
a central clearinghouse on the compliance status of medical technology.
    HIMA worked diligently and closely with FDA and the Department of 
Veterans' Affairs to help the FDA's Federal Y2k Biomedical Equipment 
Clearinghouse (Clearinghouse) become the principal central collection 
point for Year 2000 device compliance information. The initial focus of 
the FDA Clearinghouse effort was to gather information on non-compliant 
devices. In support of that critically important goal, HIMA:

 Encouraged the industry to respond to FDA's requests for 
        information for the Clearinghouse, resulting in a 100-percent 
        response rate from HIMA member companies.
 Communicated with more than 6,000, primarily small, non-member 
        companies in the industry urging them to respond to the FDA 
        request for Year 2000 status information and to ensure that 
        their devices are Year 2000 compliant.
 Sponsored advertisements with the FDA, the Department of 
        Veterans' Affairs, and other industry associations in key trade 
        magazines urging device companies to respond to FDA's request 
        for Year 2000 status information.
    In addition, HIMA worked to ensure the effectiveness of 
communications with our own member companies by:

 Asking each member company to designate the individual 
        responsible for coordinating Year 2000 activities.
 Working with the FDA and the VA to ensure that their 
        communications were reaching the right people, especially in 
        instances where they were receiving no response.
 Making calls to non-member companies who had failed to respond 
        to the VA and FDA requests for Year 2000 information to urge 
        them to post their compliance information on FDA's Federal Y2k 
        Biomedical Equipment Clearinghouse.
Federal Y2k Biomedical Equipment Clearinghouse
    After the initial cooperative efforts to make the Clearinghouse an 
effective tool for providing information on non-compliant devices, HIMA 
and the Partnership made further recommendations to improve it. For 
example, there have over the years been many mergers and acquisitions 
within the medical device industry. This changing business landscape 
makes it difficult in some cases to trace the provenance of some 
devices. One of the joint recommendations was for device manufacturers 
to provide more information to the clearinghouse on company and device 
histories to assist device owners in locating information for older 
devices.
    After the Clearinghouse was working effectively to provide 
information on ``non-compliant'' devices, FDA expanded its content to 
include information on Year 2000 compliant devices. This provided ``one 
stop shopping'' for health care providers on compliance information. 
HIMA worked closely with the FDA to help develop a template to 
facilitate a better industry response. We also strongly encouraged our 
members to respond to this new FDA request for information. HIMA's 
President urged all HIMA members to provide the requested information. 
HIMA also used its Web site to promote compliance with the request.
    I want to take a moment now to compliment FDA on the way they have 
conducted their Y2k operations. They have been extremely fair and have 
welcomed industry assistance and cooperation. I want particularly to 
acknowledge the work of Dr. Thomas Shope of the Office of Science and 
Technology at the Center for Devices and Radiological Health, whose 
work with the industry has been both helpful and professional. We are 
pleased to have been able to work with him so productively on this 
issue.
                               conclusion
    What I have tried to do is provide the Committee with a current 
picture of the medical device industry's Y2k readiness. This current 
level of readiness is based not only on the work of HIMA companies and 
the device industry as a whole, but also on many other groups from the 
government and private sectors. Both HIMA staff and members have had 
very positive experiences working with many dedicated employees of the 
Federal agencies involved in monitoring the Y2k issue. In the final 
analysis, these have been highly cooperative and very productive and 
have resulted in broad expectations that medical devices will function 
safely as we enter year 2000.
    This industry's primary efforts have been directed at maintaining 
patient safety and high quality. We are confident that as we enter year 
2000, events will show that we have been successful. In the meantime, 
the medical device industry commits to continue working cooperatively 
with all parties to ensure that the transition form 1999 to 2000 is 
safe and uneventful.

    Mr. Upton. Thank you.
    Mr. Horowitz?

                   TESTIMONY OF BRUCE HOROWITZ

    Mr. Horowitz. Good morning, chairmen and subcommittee 
members.
    I am Bruce Horowitz, Director of Product Assurance for 
Advanced Neuromodulation Systems, Inc., of Plano, Texas. I 
appear before you today on behalf of the 130 members of the 
Medical Device Manufacturers Association. Thank you for this 
opportunity to tell you how our industry has responded to the 
year 2000 computer date problem.
    MDMA is the national voice for the entrepreneurial sector 
of the medical device industry. The association as established 
in 1992 by a group of executives of small and mid-sized 
companies who believed that medical technology and 
entrepreneurs need distinct representation before the Federal 
Government.
    As in most industries, small and startup companies have 
different perspectives and needs than their larger 
counterparts. This is particularly true in highly regulated 
industries such as ours. MDMA appreciates the attention paid by 
your subcommittees to the year 2000 computer date problem.
    On behalf of the 300,000 employees of the American medical 
technology industry, I am pleased to tell you that we are ready 
for the calendar to turn on January 1. In my written testimony, 
I have outlined several reasons why the public should rest 
assured that the turn of the millennium will be business as 
usual for medical devices. The very nature of our industry, in 
fact, mitigates the potential impact of the Y2K problem.
    Since the pace of innovation in our industry is so rapid, 
most medical devices have very short life on the market, before 
companies and their competitors introduce a next generation of 
product. Many of the current generations of products on the 
market, therefore, were introduced during a time when engineers 
and computer programmers were well aware of the Y2K problem and 
its significance.
    Here is how our company dealt with the Y2K problem. ANS 
develops and markets implantable medical devices for the 
neuromodulation market. Neuromodulation is the electrical or 
chemical stimulation of the central nervous system to reduce 
pain or improve neurologic function. Our products include 
implantable spinal cord stimulation systems to manage chronic, 
intractable pain. The FDA has identified this device as 
potentially high-risk.
    We at ANS had already assessed that our devices were Y2K 
compliant, even before the FDA announced in January its intent 
to expand the information maintained in the Y2K clearinghouse. 
However, we recognized the importance of publicly assuring our 
customers and patients that our products would not be affected 
by the Y2K problem. Therefore, our senior management approved a 
program to expand the Y2K compliance program. This program was 
based primarily on guidelines provided by the U.S. General 
Accounting Office and the British Standards Institute.
    At ANS, we assessed our in-house equipment, evaluated our 
devices, and notified our customers that we are Y2K compliant, 
and that our product and service sources had addressed any 
potential problems. In my written statement, you will see the 
specific steps ANS took to deal with the various aspects of Y2K 
readiness and disclosure.
    To inform our customers, the most important people in this 
equation, we composed a letter that summarized the Y2K status 
of our products in the field. We decided to respond to customer 
inquiries in this way, since we literally had hundreds of 
inquiries on this subject, some of them containing multiple 
page surveys.
    As a small company, we did not have the resources to fill 
out these surveys, so we determined that a summary letter would 
be the best and most appropriate solution. So far, all of our 
customers have indicated that the letter met their needs.
    We have also responded promptly to all FDA requests for 
information. So far in 1999, we have provided data on our 
products four times.
    While at ANS we will not consider our Y2K compliance 
program to be complete until we have processed our last 
customer request for information, we were able to complete the 
actual assurance of Y2K compliance throughout all phases in 
April. We at ANS have worked with MDMA over the last 2 years to 
help the medical technology address Y2K concerns. You should 
know that MDMA has collected information from its members for 
inclusion in the FDA's database, published public service 
announcements, worked with the FDA to redefine their Y2K 
surveys and databases, and helped develop industry-wide 
guidelines to assure the smooth operation of the health care 
supply chain during the Y2K transition period.
    Nevertheless, we are concerned that the health care 
providers are not using the resources available to them to find 
out information on the Y2K status of biomedical equipment. 
Furthermore, we are concerned that providers may be conducting 
unnecessary tests of biomedical equipment that may create 
problems where none would otherwise exist.
    MDMA respectfully disagrees with the OIG's recommendation 
that testing is the only way to ensure device functionality. 
Instead, MDMA encourages providers to heed the advice of the 
well-respected Emergency Care Research Institute, that testing 
when complete compliance information is available is not 
necessary. ECRI has received only a few confirmed reports of 
hospital tests that contradict manufacturers' statements. And 
in none of these instances was the essential functionality of 
the device an issue.
    Furthermore, ECRI rightly points out that problems could be 
introduced during the testing of a device. MDMA is confident 
that the safety, effectiveness, performance and reliability of 
medical technology will be largely unaffected by the Y2K 
computer date program. However, to ensure as smooth a Y2K 
transition as possible, MDMA encourages health facilities and 
professionals to consult the FDA's Y2K clearinghouse and to 
contact manufacturers for more detailed information if 
necessary, to refrain from unnecessary testing of biomedical 
equipment when complete compliance information is available, 
and to preserve the integrity of the supply chain by not 
hoarding or stockpiling medical supplies and equipment.
    Thank you again for this opportunity to appear before you.
    [The prepared statement of Bruce Horowitz follows:]
   Prepared Statement of the Medical Device Manufacturers Association
    Good morning, chairmen and subcommittee members. I am Bruce 
Horowitz, director of product assurance for Advanced Neuromodulation 
Systems, Inc. (ANS), located in Allen, Texas. I appear before you today 
on behalf of the 130 members of the Medical Device Manufacturers 
Association (MDMA). Thank you for this opportunity to tell you how my 
company and the medical device industry have responded to the Year 2000 
computer-date problem.
    MDMA is the national voice for the entrepreneurial sector of the 
medical device industry. The association was established in 1992 by a 
group of executives of small and mid-sized companies who believed that 
medical technology entrepreneurs needed distinct representation before 
the federal government. As in most industries, small and start-up 
companies have different perspectives and needs than their larger 
counterparts, and this is particularly true in highly regulated 
industries such as ours. For our part, we at ANS are proud to be one of 
the founding members of MDMA.
    MDMA appreciates the attention paid by your subcommittees to the 
Year 2000 computer-date problem. The 300,000 people employed in the 
medical device industry share your concern about the possible effects 
that Year 2000 or ``Y2K'' malfunctions could have on patient safety. I 
am pleased to tell you, however, that the medical technology industry 
is ready for the calendar to turn on January 1.
Significance and Potential Impact of the Y2K Computer-Date Problem
    The nature of the Y2K problem has been documented at previous 
hearings and by previous witnesses today, so I won't add to the 
technical description. I will say, however, that we recognize the 
significance of the problem for certain medical device manufacturers 
and the potential impact on patient safety that the Y2K problem could 
have if not addressed properly.
    As businesses, medical device manufacturers have numerous business-
related reasons for wanting to address and fix any potential Y2K 
problems with our products. However, as businesses involved in 
healthcare, we also have a public-health responsibility to prevent Y2K 
problems from harming patients. Clearly, it is not in our best 
interests as businesses or as responsible members of the healthcare 
community to neglect the Y2K situation.
    There are other reasons for the public to rest assured that the 
turn of the millenium will be ``business as usual'' for medical 
devices. Under the FDA's quality systems regulation, medical device 
manufacturers must ensure that our production processes and other 
computerized processes function properly and will not be disrupted by 
any Y2K problems. The FDA has enforced this regulation fairly, and we 
are pleased to hear the agency publicly state that the Y2K problem will 
not have a major effect on medical technology. The subcommittees also 
should note that while many medical device manufacturers depend on 
computer hardware and software for their products to function or to 
enable production, very few devices depend critically on date-related 
information to function properly.
    The very nature of our industry also mitigates the potential impact 
of the Y2K problem. Since the pace of innovation in our industry is so 
rapid, most medical devices have a very short life on the market before 
companies and their competitors introduce a next generation of 
products. Many of the current generations of products on the market, 
therefore, were introduced during a time when engineers and computer 
programmers were well aware of the Y2K problem and its significance.
How ANS Addressed the Y2K Problem
    Here's how our company dealt with the Y2K problem. ANS develops and 
markets implantable medical devices for the neuromodulation market. 
Neuromodulation is the electrical or chemical stimulation of the 
central nervous system to reduce pain or improve neurologic function. 
Our products include implantable spinal cord stimulation systems to 
manage chronic intractable pain. We are also developing an implantable 
pulse generator and an implantable drug administration system, both of 
which will be used in the management of chronic pain and nervous system 
disorders.
    We at ANS had already assessed that our devices were Y2K-compliant, 
even before the FDA announced in January its intent to expand the 
information maintained in its Federal Y2K Biomedical Equipment 
Clearinghouse [www.fda.gov/cdrh/yr2000/year2000.html], the main 
centralized information source on the Y2K status of biomedical 
equipment. However, we recognized the importance of publicly assuring 
our customers and patients that our products would not be affected by 
the Y2K problem. Therefore, our senior management approved a program to 
expand our Y2K compliance program. This program was based on guidelines 
provided by the General Accounting Office in a document called ``Year 
2000 Computing Crisis: An Assessment Guide.'' We also relied upon 
``DISC PD2000-1, A definition of Year 2000 Conformity Requirement,'' 
published by the British Standards Institute (BSI).
    At ANS, we assessed our in-house equipment, evaluated our devices, 
and notified our customers that we are Y2K-compliant and that our 
product and service sources had addressed any potential problems. The 
four key elements of this Y2K compliance program were general 
integrity, date integrity, explicit/implicit century and leap year.
    Here are the specific steps ANS took to deal with the various 
aspects of Y2K readiness and disclosure:

Computer systems--We tested all hardware and software or assured that 
        our supplier had certified to Y2K compliance. Our tests and 
        assurance included all computer systems and key software, such 
        as our operating systems, our manufacturing management systems, 
        and our quality management software.
Products--We assured that all of our computerized or microprocessor-
        based products had been tested or evaluated according to the 
        conformity requirements contained in the BSI document. This 
        encompassed the transmitter, the receiver and the programmer in 
        our devices.
Manufacturing equipment and test equipment--We assured that all 
        computerized or microprocessor-based equipment in manufacturing 
        or testing had either been tested or certified to Y2K 
        compliance by its maker.
Suppliers--We queried our suppliers of products and services as to 
        their Y2K readiness. At this point, we have assured that all 
        key suppliers will be in compliance by December 31 or have 
        contingency plans to ensure an uninterrupted supply of 
        components.
Customers--We composed a letter to our customers that summarized the 
        Y2K status of our products in the field. We decided to respond 
        to customer inquiries in this way since we literally had 
        hundreds of inquiries on this subject, some of them containing 
        multiple-page surveys. As a small company, we did not have the 
        resources to fill out these surveys, so we determined that a 
        summary letter would be the best and most appropriate solution. 
        So far, all of our customers have indicated that the letter met 
        their needs.
FDA--We have responded promptly to all FDA requests for information. So 
        far in 1999, we have provided data on our products four times, 
        in January, March, June and September.
Ongoing Activities--We continue to require and evaluate information 
        regarding Y2K compliance for any new products, equipment or 
        suppliers.
    While we at ANS will not consider our Y2K compliance program to be 
complete until we have processed our last customer request for 
information, we were able to complete the actual assurance of Y2K 
compliance throughout all phases in April.
The Industry Perspective
    MDMA is pleased to know that the FDA believes the medical 
technology industry is well prepared for the year 2000. MDMA has worked 
with its members and the FDA over the past two years to help the 
medical technology industry address Y2K concerns. For instance, MDMA 
has

 collected information from its members for inclusion in the 
        FDA's Federal Y2K Biomedical Equipment Database;
 joined with fellow associations in publishing public-service 
        announcements in trade publications to raise general industry 
        awareness;
 worked with the FDA, hospitals, distributors, and other 
        stakeholders to refine Y2K surveys and databases to improve the 
        quality of Y2K information available to patients and users; and
 helped develop industry-wide guidelines to assure health 
        facilities and professionals of a continual and reliable supply 
        and availability of medical products throughout the Y2K 
        transition period.
    Nevertheless, we are concerned that hospitals, other health 
facilities, and health professionals are not using the resources 
available to them to find out information on the Y2K status of 
biomedical equipment. Furthermore, we are concerned that these same 
organizations and individuals may be conducting unnecessary testing of 
biomedical equipment that may create problems where none would 
otherwise exist.
    The recent survey by the Office of the Inspector General (OIG) at 
the Department of Health and Human Services suggests that end-users are 
not taking advantage of the Federal Y2K Biomedical Equipment Database. 
While we are heartened to see that nearly every hospital responding to 
the survey believes that their biomedical equipment will be Y2K-ready 
by December 31, we are disappointed that only 79 percent were aware of 
the FDA's database, and only 59 percent had visited the database for 
information about the Y2K status of their equipment. I hope that the 
FDA, the hospital associations, and other representatives of health 
facilities and professionals will redouble their efforts to inform the 
healthcare community about the FDA's Y2K clearinghouse.
    The OIG's survey also found that 68 percent of hospitals have 
tested their biomedical equipment to verify Y2K readiness. MDMA is 
concerned that in many cases, this testing is not necessary and may 
cause problems with the equipment being tested.
    An independent health services research agency, the Emergency Care 
Research Institute (ECRI), in its ``Position Statement on the Testing 
of Medical Devices for Year 2000 Compliance,'' writes that ``testing 
when complete compliance information is available is not necessary'' 
for a variety of reasons. For example, ECRI believes that ``healthcare 
facilities are not likely to have the expertise, the access, and the 
resources to perform testing at the level needed to provide a 
reasonable assurance that a device is compliant.'' ECRI also has 
received ``only a few confirmed reports of hospital tests that 
contradict manufacturer compliance statements, and all these reports 
have involved minor problems such as devices displaying or printing 
incorrect date information.'' Finally, ECRI points out that ``problems 
could be introduced during testing'' of a device.
    MDMA agrees with ECRI's findings and urges health facilities and 
professionals to consult the FDA's information clearinghouse and to 
contact manufacturers before conducting any further Y2K testing of 
biomedical equipment.
Summary
    MDMA is confident that the safety, effectiveness, performance, and 
reliability of medical technology will be largely unaffected by the Y2K 
computer-date problem. This is a direct testament to the focus and 
commitment of Advanced Neuromodulation Systems and our colleagues in 
the more than 7,000 companies in the medical device industry, more than 
two-thirds of which have fewer than 50 employees. To ensure as smooth a 
Y2K transition as possible, MDMA encourages health facilities and 
professionals

 to consult the FDA's Y2K clearinghouse and to contact 
        manufacturers for more detailed information if necessary;
 to refrain from unnecessary testing of biomedical equipment 
        when complete compliance information is available; and
 to preserve the integrity of the supply chain by not hoarding 
        or stockpiling medical supplies and equipment.
    Finally, MDMA commends the FDA for its efforts to provide health 
facilities and professionals with the resources they need to certify 
the Y2K compliance of their biomedical equipment. We also commend your 
subcommittees for your reasoned and even-keeled oversight of this 
situation. Thank you again for this opportunity to appear before you.

    Mr. Upton. Mr. Neill?

                  TESTIMONY OF C. THOMAS NEILL

    Mr. Neill. Good morning, Mr. Chairman and members of the 
committee.
    I am Tom Neill, Vice President, Corporate Services, of 
Quorum Health Group. During the past several years, I have 
served as the executive sponsor for our company-wide Y2K 
program. I am honored to appear before you today on behalf of 
my company, which is a member of the Federation of American 
Health Systems, and on behalf of the hospital industry.
    Today I will discuss Quorum's activities and preparations 
concerning Y2K which are expected to cost approximately $20 
million. Quorum Health Group, through its affiliates, operates 
acute care hospitals and health systems nationwide. Through its 
affiliates, Quorum currently owns 21 hospitals, manages 223 
hospitals, provides consulting services to 122 facilities and 
has more than 20,000 employees in more than 40 States and the 
District of Columbia.
    Through great effort and a significant commitment of time, 
resources and money, we are pleased to say that over 98 percent 
of our Tier 1 clinical equipment at our own hospitals has been 
assessed and remediated for Y2K readiness. While our primary 
focus has been on equipment and systems that affect our ability 
to continue to deliver quality patient care, we recognized 
early on that a complete program involves addressing all 
aspects of the operation of a hospital.
    In 1997, we began educating the hospital base chief 
information officers of our own hospitals about the year 2000 
issue. They subsequently began working with their primary 
vendors that developed and supported our core information 
systems. In July 1998, the company hired outside consultants to 
form a program management office to assist our own hospitals 
even further in their preparations for the year 2000.
    We have adopted a three tier approach for Y2K project 
completion. For instance, Tier 1 addresses applications and 
equipment that have a direct impact on patient safety and 
health care, or are essential to our daily operations. We are 
also using an outside vendor's database to gather and monitor 
manufacturer year 2000 compliance information for biomedical 
devices, building infrastructure components and information 
technology systems.
    Our own hospitals' year 2000 strategy includes phases for 
education, inventory and assessment, validation and conversion, 
and remediation or replacement. We are also developing 
contingency plans to address potential disruption of operations 
arising from the year 2000 problem. Quorum estimates that it 
will spend approximately $20 million on Y2K activities for its 
21 own hospitals.
    Simply put, our policy is, we will not deploy any Tier 1 
biomedical device for patient care without reasonable assurance 
that it will perform properly in light of the year 2000 
problem. Quorum has substantially completed testing and 
validation of all Tier 1 biomedical equipment. We have not 
tested devices where the manufacturer has advised us against 
testing such equipment, and represented year 2000 compliance in 
writing. We currently expect to complete remediation of the 
remaining 2 percent or approximately 400 items by the end of 
1999.
    To restate, our policy is that we will not deploy any Tier 
1 biomedical device for patient care without reasonable 
assurance that it will perform properly in light of the year 
2000 problem. Further, our policy is to test all equipment that 
we have identified as Tier 1 regardless of the manufacturer's 
stated Y2K status.
    While Quorum has taken a very conservative approach to 
testing all Tier 1 biomedical equipment, even those that the 
manufacturer states is compliant, responsibility of compliance 
still remains with the equipment manufacturer. Despite our best 
efforts, we are unable to test to the same degree that a 
manufacturer of that device could test.
    Each of our hospitals' disaster plans form the foundation 
for our year 2000 contingency planning, but we have gone beyond 
this. Quorum's Y2K contingency planning training has been 
performed and best practices reviewed and shared with all 
hospitals. In fact, Y2K drills are being conducted now with a 
company-wide drill planned for November.
    In conclusion, the comprehensive approach that we have 
taken on Y2K demonstrates the level of Quorum's commitment to 
the delivery of quality patient care in our hospitals. The 
approach to testing all Tier 1 biomedical equipment, coupled 
with our commitment to restrict the use of any device that is 
not Y2K ready, increases our confidence that patient safety and 
quality care will not be compromised in our hospitals.
    To address the year 2000 issue to this degree has required 
a significant amount of resources, from our hospitals and 
business partners alike. However, Quorum is committed to 
working with our business partners and communities to ensure a 
safe transition into the next millennium.
    Thank you for this opportunity to testify before you today, 
Mr. Chairman, and I welcome your questions.
    [The prepared statement of C. Thomas Neill follows:]
   Prepared Statement of C. Thomas Neill, Vice President, Corporate 
   ServicesQuorum Health Group, Inc. on behalf of the Federation of 
                        American Health Systems
                             introduction:
    Good morning Mr. Chairman and Members of the Committees. I am Tom 
Neill, Vice President, Corporate Services, of Quorum Health Group, Inc. 
During the past several years, I have served as the executive sponsor 
for our company-wide Y2K program. I am pleased to appear before you 
today on behalf of my company, which is a member of the Federation of 
American Health Systems, and on behalf of the hospital industry. The 
Federation of American Health Systems represents nearly 1,700 privately 
owned and managed community-based hospitals and health systems that 
offer traditional acute care, ambulatory care, rehabilitative care, and 
allied companies involved in health care systems.
    For purposes of today's hearing, I will discuss Quorum's activities 
and preparations concerning Y2K, which are expected to cost more than 
$20 million. Quorum Health Group, Inc., through its affiliates, 
operates acute care hospitals and health systems nationwide. Through 
its affiliates, Quorum currently owns 21 hospitals, manages 223 
hospitals, provides consulting services to 122 facilities and has more 
than 20,000 employees in more than 40 states and the District of 
Columbia.
Year 2000 Plan
    Through great effort and a significant commitment of time, 
resources and money, we are pleased to say that over ninety-eight 
percent of our Tier 1 clinical equipment in our owned hospitals has 
been assessed and remediated for Y2K readiness. While our primary focus 
has been on equipment and systems that affect our ability to continue 
to deliver quality patient care, we recognized early on that a complete 
program involves addressing all aspects of the operation of a hospital.
    In 1997, we began educating the hospital-based chief information 
officers (CIOs) of our owned hospitals about the Year 2000 issue. They 
subsequently began working with their primary vendors that developed 
and supported our core information systems. In July 1998, the Company 
hired outside consultants to form a Program Management Office (PMO) to 
assist our owned hospitals even further in their preparations for the 
Year 2000. The PMO's integrated, team-oriented approach brought 
together a team of experienced players into one centralized office. The 
group included numerous associates from Quorum, consultants from Keane, 
the law firm of Rudnick & Wolfe of Chicago, and third party management 
service providers who took the unique project very seriously from day 
one.
Year 2000 Approach
    We have adopted a ``tier approach'' for Year 2000 project 
completion. Tier 1 addresses applications and equipment that have a 
direct impact on patient safety and health or are essential to our 
daily operations. Tier 2 represents applications and equipment that are 
critical to continued business operations, but not required to provide 
day-to-day service to the patients and for which a viable alternative 
exists. Tier 3 relates to applications and equipment that are not 
essential to our daily operations.
    To date, we have given first priority in our testing and 
remediation efforts to Tier 1 applications and equipment. We are also 
currently validating and remediating Tier 2 devices, components and 
systems. We currently expect to substantially complete validation and 
remediation of Tier 2 devices, components and systems by the end of 
1999. In addition to our own testing, we are using an outside vendor's 
database to gather and monitor manufacturer Year 2000 compliance 
information for biomedical devices, building infrastructure components 
and information technology systems. In general, we are relying on 
vendor verification of Year 2000 compliance for Tier 2 devices, 
components and systems, rather than testing these items ourselves.
Process Overview/Phases
    The PMO developed a multi-phase approach to help Quorum-owned 
hospitals quickly address their Y2K mission critical issues. While not 
directly a part of the PMO, hospitals managed by Quorum Health 
Resources, LLC, have been provided education and suggested guidelines 
for their own readiness efforts. Best practices are shared with managed 
facilities to assist their independent efforts.
    Our owned hospitals' Year 2000 strategy includes phases for 
education, inventory and assessment, validation (including testing) and 
conversion, remediation or replacement. We are also developing 
contingency plans to address potential disruption of operations arising 
from the Year 2000 problem.
     Awareness: This is truly an ongoing function. We are 
continually raising the level of awareness and education of the 
hospitals' Y2K projects throughout the Company and communities.
     Inventory: We have taken action to ensure thorough and 
comprehensive inventory identification.
     Assessment and Impact Analysis: We have made a 
comprehensive assessment of all hospital systems, equipment and 
vendors, utilizing a tier approach where priorities are based on impact 
and criticality.
     Testing: Quorum's testing strategy for biomedical 
equipment involves setting the date to one of four potentially 
problematic dates (e.g., 1/1/2000, 2/29/2000, etc.). Quorum has taken a 
conservative approach by establishing a policy to test all Tier 1 
biomedical equipment where feasible.
     Remediation: Quorum has undertaken the remediation process 
and is correcting Y2K problems in biomedical equipment, computer 
systems, or other hospital equipment. This action may include 
replacement, upgrade, elimination, or performing a workaround.
     Contingency Planning: Our hospitals are preparing for 
potential Y2K problems by first reviewing existing hospital disaster 
recovery plans, then developing Year 2000 specific contingency plans.
     Documentation: Our hospitals are implementing a process to 
ensure that the hospitals' Y2K project efforts and activities are 
properly recorded and well preserved.
Costs & Impact
    Quorum estimates that it will spend approximately $20 million 
dollars on Y2K activities for its 21 owned hospitals. Specifically, the 
total resources necessary to manage an inventory of 32,000 devices and 
systems towards Y2K readiness will cost approximately four million 
dollars. Capital costs for replacing, upgrading, and fixing Y2K issues 
are estimated to total approximately $16 million dollars of the $20 
million dollars. This includes replacing the core information systems 
in six (6) owned hospitals.
    Approximately fifty percent (or 16,000) of Quorum's Y2K inventory 
was given the highest priority rating of Tier 1 based upon possible 
impact to patient care and hospital operations. Seventy-five percent, 
or approximately 12,000 of that 16,000, were clinical devices. We 
discovered that approximately forty percent of our clinical devices 
have no Y2K sensitivity, meaning the device has no clock chip. 
Therefore, we tested approximately 7,000 clinical devices in our owned 
hospitals.
Hospital Medical Device Testing
    We have substantially completed testing and validation of all Tier 
1 biomedical equipment. We have not tested devices where the 
manufacturer has advised us against testing such equipment and 
represented Year 2000 compliance in writing. We believe that 
approximately ninety-eight percent of the Tier 1 devices requiring Year 
2000 validation are now Year 2000 compliant. We currently expect to 
complete remediation of the remaining two percent, or approximately 400 
items, by the end of 1999. Our policy is that we will not deploy any 
Tier 1 biomedical device for patient care without reasonable assurance 
that it will perform properly in light of the Year 2000 problem. Such 
assurance may take the form of testing, vendor assurances of Year 2000 
compliance or, where feasible, developing a work-around procedure for 
the device in case of a possible malfunction.
Y2K Readiness Validation
    Quorum has taken a dual approach to determining the Y2K readiness 
of our hospitals' medical devices. First and foremost, we look to the 
manufacturer for the status, knowing that they are the ultimate 
authority on their own equipment. We contracted with an outside service 
provider to manage and update the compliance status from manufacturers. 
This service provider gathered information from the FDA web site, 
manufacturer web sites, or directly from the manufacturer.
    Second, our testing program provides additional verification of the 
information from the manufacturer. Our policy is to test all equipment 
which we've identified as Tier 1, regardless of the manufacturers' 
stated Y2K status. The only exception to this policy is granted when 
the vendor provides written assurance that the device is Y2K compliant 
and states that field testing would or could damage the equipment.
Responsibilities
    While Quorum has taken a very conservative approach to testing all 
Tier 1 biomedical equipment, even those that the manufacturer states as 
compliant, responsibility of compliance still remains with the 
equipment manufacturer. As a user of the equipment, we believe we can 
only reasonably perform tests of the rollover from one date to another. 
Despite our efforts, we are unable to test to the same degree that a 
manufacturer of that device could test.
Contingency Planning
    We developed contingency plans in all of our owned hospitals that 
we believe will reduce disruption in service that could be caused by 
the Year 2000 problem. As part of our contingency plan, each of our 
owned hospitals has a disaster plan, which we review regularly. These 
disaster plans are designed to enable the hospital to continue to 
function during natural disasters and other crises. Y2K contingency 
planning training has been performed and best practices reviewed and 
shared with all hospitals. Minimum standards for the plans were set and 
a review of every hospital's plan is under way. Y2K drills are being 
conducted with a company-wide drill planned for November.
Industry Status Observations
    Overall reports from the Department of Health & Human Services 
indicate that the majority of hospitals will be ready for the Year 
2000. Also, the recent survey by the American Hospital Association on 
``Y2K Readiness of Fee-For-Service Providers as of July 1999'' made the 
following points:

 Twenty-seven percent of responding hospitals say that ALL 
        their biomedical equipment is ready. Of those whose biomedical 
        equipment is not ready, the majority (357) say that they have 
        completed eighty-six percent or more.
 Nearly all hospitals (513) predict that ninety-nine percent of 
        their equipment will be ready by the end of the year.
    Another recently released report on the Y2K readiness of healthcare 
providers from the Office of Inspector General (OIG) indicates that 
most hospitals will be ready for Y2K. As quoted:

 Hospitals had the highest survey response rate which ``shows 
        their willingness to be forthcoming about the work that is 
        still needed to be completely Y2K ready.''
 ``Clearly, the survey indicated that the vast majority of 
        hospitals are doing everything it takes to be Y2K ready.''
Conclusion
    In conclusion, the comprehensive approach that we have taken on our 
Year 2000 program demonstrates the level of Quorum's commitment to the 
delivery of quality patient care in our hospitals. The approach to 
testing all Tier 1 biomedical equipment, coupled with our commitment to 
restrict the use of any device that is not Y2K ready, increases our 
confidence that patient safety and quality care will not be compromised 
in our hospitals. To address the Year 2000 issue to this degree has 
required a significant amount of resources from our hospitals and our 
business partners alike. However, Quorum is committed to working with 
our business partners and communities to insure a safe transition into 
the next millennium. Thank you for this opportunity to testify before 
you today. I welcome your questions.

    Mr. Upton. We've appreciated the testimony of all of you. 
As you have heard from these buzzers and lights, we have a vote 
on. We are going to try to keep the committee moving as we did 
in the first panel. Mr. Bryant has gone over, he has the fast 
legs, so he will be back soon, and Mr. Brown will be back as 
well, and obviously Mr. Bilirakis.
    Before I need to go and vote, I have a couple of questions 
for sure. The HHS inspector general report indicated that about 
60 to 70 percent of providers rely on manufacturers' assurances 
that the equipment will be Y2K compliant. But about half of the 
hospitals apparently reported problems getting information from 
those manufacturers. Any reason why? Any thoughts between the 
three of you?
    Mr. Neill. Mr. Chairman, if I might respond, initially----
    Mr. Upton. I mean, it sort of goes back to the series of 
questions that I asked, as well, that the manufacturers ought 
to be the first ones on the scene to report back to the 
providers in terms of problems that they might experience.
    Mr. Neill. I agree with your assessment, Mr. Chairman. 
Early on in the Y2K agenda, and when I say early on, 18 months 
ago, there was a huge cloud of liability over the entire 
concept of Y2K. And that cloud of liability still remains 
today.
    But early on, in response to your question, there was some 
apprehension on behalf of the manufacturers to come forth and 
be totally forthright and candid regarding the Y2K compliance 
of their equipment. But we have not found that to be the case 
this year.
    The FDA has done a commendable job in pulling that 
information together. Other organizations, such as the VHA out 
in Dallas, likewise, working with FDA, has pulled the 
manufacturers' information together. And we have found that 
information to be readily attainable.
    Mr. Upton. I would just note from my own personal 
observations, I have a large employer in my district called 
Stryker. I know you recognize it. I know those folks very well. 
And as I went in, and kicked the tires, as one might say, I 
found that their attitude was very responsible in making sure 
that everything was compliant and full notice was given, and a 
concern to no end to make sure that literally every rock and 
stone was unturned just to make sure that they would not 
experience problems.
    Would you say that in general, most other device 
manufacturers, particularly in your membership, Mr. Benson and 
Mr. Horowitz, followed the same type of lead that the Stryker 
folks have?
    Mr. Benson. Absolutely.
    Mr. Upton. Is that indicative of the entire industry?
    Mr. Benson. Absolutely. I think common sense, if you just 
look at it from a common sense standpoint, these companies are 
in business to help patients, to make sure patients are treated 
safely, that the quality of health care is very positive, the 
quality of their lives is very positive.
    And of course, there is a profit motive. It does not make 
sense for them to not put that information out. I think the 
example you gave from Stryker is a good one, and I think that 
is the model that companies have followed.
    In answer to your question, the only reason I can think of, 
perhaps in addition to Mr. Neill's explanation, is simply just 
volume of requests. I am a little doubtful of that data. I 
would think that if you look back over the past several months, 
over the past year or so, that the vast majority of questions 
have been answered, and probably answered promptly.
    Mr. Upton. Okay. I am getting a little nervous, I have not 
missed a vote this year or last year, and I want to make sure I 
get there. I know Mr. Bryant will be back momentarily and we 
will continue at that point.
    Thank you.
    [Brief recess.]
    Mr. Bryant [presiding]. We will reconvene.
    I left early and raced over there to vote so I could relay 
back and catch the chairman, but we did not quite make the time 
pass exactly. But in the interest of saving you folks some 
time, you have been here a long time, we try to do that 
occasionally and make it work.
    Mr. Horowitz. He complimented your legs.
    Mr. Bryant. I did not have my cape on, I might have flown 
over there today.
    I understand we are at that point where we have finished 
our statements. Mr. Neill, I think you were testifying when I 
left. Again, it was nothing you said that caused me to leave.
    But let me start the questioning, if I could. I think I 
wanted to ask Mr. Neill, I understand perhaps you have 
conducted some testing, is that right?
    Mr. Neill. Yes, sir, we have.
    Mr. Bryant. As part of your testing that you have done for 
the Tier 1 devices, were there any occasions where your own 
testing showed non-compliance of the device and the 
manufacturer had previously stated that the device was in fact 
Y2K complaint?
    Mr. Neill. No, sir, I do not recall any of that at all. Our 
testing of Tier 1 indicated a failure rate overall of around 2 
to 4 percent, it just depended on which line of the equipment. 
But we did not, to the best of my knowledge, discover any 
malfunctions that had not already previously been reported by 
the manufacturer.
    Mr. Bryant. Would you again, for the people who might later 
see this program or might be in the audience, distinguish 
between Tier 1 and Tier 2?
    Mr. Neill. Tier 1, Mr. Chairman, is any device by our 
definition that touches a patient that is related to patient 
safety. A more prevalent definition throughout the health care 
industry has been to call it a mission critical device. A Tier 
2 is something other than a Tier 1. It does not touch a 
patient. It is not patient safety related. It is primarily 
hospital operations and business systems oriented.
    Mr. Bryant. I wonder if all three of the members, and Mr. 
Liebler, if you are aware that the FDA has hired outside 
contractors to help in assessing the Y2K problem? Has that been 
of any help? Was that of any help to you in your own 
involvement with this issue?
    Mr. Horowitz. From the perspective of the manufacturer, we 
would have taken any action that we have taken anyway. Just 
from the perspective that the devices have to be safe and 
effective, we have customers that rely on them. And the fact 
that FDA hired consultants to check up on us, really did not 
factor into our compliance in any way.
    Mr. Bryant. Mr. Benson or Mr. Liebler?
    Mr. Liebler. I have spoken with a number of our 
manufacturers who did volunteer for these examinations. I asked 
them to tell me how they went, and they were very pleased with 
them.
    And I think the most important point they had to mention 
was, this is a unique event and a unique situation. They all 
had worked very hard and felt that they had done as well as 
they could. And this served as a good independent third party 
who came in and at least told them they believed they were 
doing things in the right way. So I think that was an overall 
benefit to the industry.
    Mr. Bryant. Mr. Benson, I understand your association 
represents about 1,000 manufacturers. I think the total number 
of manufacturers registered with the FDA is, I don't see the 
figure but it is something like 17,000. I am wondering, too, 
Mr. Horowitz, do you represent 100, I think it is----
    Mr. Horowitz. It's 130.
    Mr. Bryant. I assume they are some of the same people, 
perhaps cross-pollinating there. But what that tells me is the 
two of you represent, in your associations, I don't know where 
all these other people go for their representation, but it is a 
substantial minority.
    Is there concern in the industry as a whole on either of 
your parts, and Mr. Liebler, I will add you, too, about 
compliance with the other manufacturers, non-members?
    Mr. Benson. Let me mention first that HIMA's, if you look 
at the HIMA membership in terms of sales, it is almost 90 
percent of the medical device industry.
    Mr. Bryant. I am sorry, you did mention it was 90 percent.
    Mr. Benson. You've got a slug of MDMA and some of the other 
trade associations, NEMA, into that, you're pushing 100 
percent.
    But there are a lot of small manufacturers, there are a lot 
of manufacturers that are classified as startups, or they may 
not even have a product on the market. We went out of our way, 
not only to push our own members, as did the other 
associations, but also to contact non-members. Because we 
wanted to be responsible citizens and make sure that the 
industry was in fact doing what it should do to make sure there 
was not a Y2K problem.
    So I personally feel very strongly that the device industry 
is in great shape when it comes, I am not concerned about the 
fact that we do not have 100 percent of the companies.
    Mr. Horowitz. MDMA has done similar things to what HIMA 
does. Obviously, membership of MDMA has consisted mostly of 
small and startup companies. But we feel the same way that HIMA 
does, that in general, these are very highly technologically 
oriented companies. And this is not a secret, we have been 
aware of this for quite a while and have taken steps to address 
the problem.
    Mr. Bryant. Since Mr. Brown is here, I am going to go ahead 
and ask one or two other questions. We have seized control of 
the Chair, so I am very liberal with myself in time.
    Could I ask you one general follow-up, to all of you? You 
were here when the first panel testified and the inspector 
general for HHS, and to some extent the GAO representative 
testified about their concern with the, not only liability, but 
here we are talking about human lives, their concern at the 
provider level, where your product may be testified. And Mr. 
Neill, you can give us some more light on this, because you are 
kind of at the downstream end of this more so. But the 
manufacturer's product may testify fine in a lab setting, but 
hooked up to everything else in a real world setting, there 
might be some problems there.
    I would love to have your opinions and your thoughts on 
those kinds of comments in the way of giving us some assurance, 
one way or the other.
    Mr. Horowitz. Well, the devices that ANS makes, and the 
actually probably the majority of devices that are made by our 
members, are pretty much stand alone devices. They do not 
interface with computers or other people's devices. So the 
testing that we conducted would assure the fact that the 
devices will function as intended.
    To address the other problem, it seems reasonable that if a 
device is going to be Y2K compliant, that the output from that 
device to another one would also have to be Y2K compliant as 
well. It would certainly be prudent on the hospitals' part to 
confirm that, because there is really no way that the 
manufacturer of one device can predict what the product of 
another manufacturer's device will do, once they interface it. 
And they are really the only ones that know how they are using 
the device.
    Mr. Neill. Mr. Bryant, our organization has elected to 
confirm Y2K compliance in the operational environment as 
opposed to the lab test environment for the reasons you 
suggest.
    Mr. Bryant. Thank you. Mr. Benson or Mr. Liebler, any 
comment?
    Mr. Liebler. Well, again, I would like to refer to a 
discussion I was having yesterday with one of our larger 
members and the person running their program. He noted that 
they have structured their testing as far as they could to make 
it real world testing. They understand the concept, you can't 
put it in a black box and then say it works when you drop it in 
the world. So they understand the environments where they are 
used, and the testing was designed to make sure that it would 
work in that environment, and I am very confident that we are 
not alone among our companies doing that.
    Mr. Bryant. Thank you. At this time, the Chair would yield 
my time to Mr. Brown, the ranking member.
    Mr. Brown. Thank you, Mr. Chairman.
    I asked Mr. Willemssen a question of how he would grade 
providers and grade all participants, if you will, for Y2K 
readiness. I would like to ask each of you, starting with Mr. 
Neill, how you grade your members, your industry, A to F, for 
Y2K preparedness?
    Mr. Neill. Mr. Brown, it is difficult for me to grade other 
providers in the industry. But with your permission, I would be 
delighted to grade my own organization. We have quite a few 
hospitals scattered throughout the country. We have made a 
significant investment, as I reported in both written and oral 
testimony. We are spending around $20 million on Y2K within 
Quorum.
    And I would give us an A plus. I appreciated the question 
when you asked it to panel No. 1. I do think that when you 
start getting some responses from the provider community that 
you are going to find that more work has been done than perhaps 
has been reported overall.
    Mr. Brown. Mr. Horowitz?
    Mr. Horowitz. It is a bit difficult for me to speak for the 
other members of MDMA. I can speak for us. And obviously, I 
would give us an A. We have been at it for quite a while, and 
we are confident that everything is fine.
    One thing I would like to point out, that we do have to 
operate under the quality system regulation which does include 
design controls. And any prudent medical device manufacturer 
would include this type of testing as part of the development 
and the validation and verification of any medical device.
    So as long as we are following the regulations and our own 
procedures, I would feel confident that all of the devices 
would comply and would not have this problem.
    Mr. Brown. And your grade would be?
    Mr. Horowitz. Well, if they were doing that, I would give 
them an A. But like I said, I do not have the information 
available to let you know exactly how the other companies feel 
about their process.
    Mr. Brown. Mr. Benson?
    Mr. Benson. I would give the industry a strong A, A plus.
    Mr. Brown. Because?
    Mr. Benson. Well, as I mentioned in testimony, $700 million 
has been spent. I think their reputations are at stake in this. 
They are concerned about patient safety. I have seen an 
enormous effort on their part to make sure that not only that 
individual companies, companies that we have, for example, one 
of our companies chaired a committee issue working group that 
addressed the Y2K, you know, that leadership has been strong. A 
lot of activity at the real working level to make sure that 
products are in fact compliant, and that that information is 
then communicated.
    Mr. Brown. Considering the grades that you each gave 
yourselves and your industries, obviously the public, and I 
guess this Congress, apparently, the majority, anyway, that 
scheduled this hearing does not believe that it is in quite 
that good a shape. But the public, in the media, you hear 
stories that the pacemakers will stop working after January 1. 
What message do you have for the public so that they rest more 
assured that any kind of tragedies like this will not happen? 
Mr. Benson?
    Mr. Benson. That is a good question. I actually think one 
of the main problems that has also been addressed that we have 
not talked about here is one of distribution. So I think I 
would reassure the public that in the medical community, I am 
not competent to speak in others, that they recognize that and 
relax and trust the system to work.
    On a personal note, I do not particularly relish the idea 
of having to go to the hospital, but if that were to occur, if 
it were to occur to a member of my family, I would not be 
concerned. I think I would be very willing to say that.
    I think Bernie wants to add something.
    Mr. Liebler. I think that we are dealing with extremely 
complex technology. And I think the pacemaker example that you 
mentioned is an excellent example, because it was the first 
thing that I heard about when I started working on Y2K several 
years ago.
    And it has been very hard to get the message to people that 
it is a technology that does not depend on dates. The way I 
respond to most reporter questions about that was, does your 
heart care the date? Your heart has to beat. And the 
pacemaker's job is to help your heart beat. And it better not 
care about what date it is either. As they refer to in 
computers, it's a 24/7 job.
    And it is difficult, it is very difficult for all of us to 
understand how computers work, how cell phones work, how 
medical devices work. It is daunting. And I think that the best 
we can do is try to tell people that the people that work on 
these, the people that design these, are good people like they 
are, working for a good purpose, who want to keep doing it in 
the future. And they only have the good of the patient at 
heart.
    Mr. Brown. Thank you. Thank you, Mr. Chairman.
    Mr. Bryant. Let me thank the panel. You were all very 
competent and well versed in your expertise, you expressed it 
well to us. And you have been very helpful to us, as was the 
first panel also very helpful to us.
    Since you have all traveled a long way, does anyone have 
any closing remarks related to this subject?
    [No response.]
    Mr. Bryant. There being none, then, I would assume it is 
time to adjourn this hearing. And this hearing is adjourned. 
Thank you.
    [Whereupon, at 12:18 p.m., the subcommittees were 
adjourned, to reconvene at the call of their respective 
Chairs.]
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