Year 2000 Computing Crisis: Compliance Status of Many Biomedical
Equipment Items Still Unknown (Letter Report, 09/18/98, GAO/AIMD-98-240).

Pursuant to a congressional request, GAO provided information on the
status of the Veterans Health Administration's (VHA) and the Food and
Drug Administration's (FDA) Year 2000 biomedical equipment programs.

GAO noted that: (1) VHA has made progress in implementing its year 2000
strategy for biomedical equipment, which relies on compliance
information from the manufacturers; (2) as of July 29, 1998, VHA had
received information on biomedical equipment compliance from 73 percent
of the 1,490 manufacturers on its list of suppliers; 701, or 47 percent,
of these manufacturers reported that their products are year 2000
compliant; (3) in spite of this, VHA does not yet know the full extent
of the year 2000 problem on its biomedical equipment and the associated
costs to address this problem; (4) among the manufacturers that had yet
to respond or complete their assessments is one that supplies
high-dollar value equipment, such as radiology systems and electronic
imaging systems equipment, to VHA; (5) according to VHA's Year 2000
Project Manager, most of the manufacturers reporting that they had
noncompliant equipment cited incorrect display of date or time as
problems; (6) date or time display problems should not present a risk to
patient safety because health care providers can work around them; (7)
however, some manufacturers cited problems that could pose a risk to
patient safety; (8) to the extent that noncompliant biomedical equipment
has to be replaced or repaired, the cost estimate reported by the
Department of Veterans Affairs (VA) to the Office of Management and
Budget is incomplete; (9) to assist health care facilities in the public
and private sectors, FDA issued a letter in January 1998 to biomedical
equipment manufacturers, requesting information on products affected by
this computer problem; (10) in contrast to VHA, as of July 30, 1998, FDA
had only received responses from 1,975, or about 12 percent, of the
approximately 16,000 biomedical equipment manufacturers to which its
letter was sent; (11) FDA has made information from biomedical equipment
manufacturers available through a world wide web site; (12) VHA,
however, has not yet done so because: (a) when VHA requested the
information from the manufacturers, VHA did not tell them that it
intended to release the information outside the federal government; and
(b) VHA said it had concerns regarding whether it would be proper for it
to release some of the information provided by the manufacturers because
the information may be proprietary; and (13) VHA, on the advice of VA's
Acting General Counsel, informed manufacturers in June 1998 that it
plans to release information that the manufacturers said was not
confidential commercial information.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  AIMD-98-240
     TITLE:  Year 2000 Computing Crisis: Compliance Status of Many 
             Biomedical Equipment Items Still Unknown
      DATE:  09/18/98
   SUBJECT:  Computer software verification and validation
             Strategic information systems planning
             Systems compatibility
             Medical equipment
             Health care services
             Embedded computer systems
             Computer software
             Medical information systems
             Systems conversions
             Proprietary data
IDENTIFIER:  Y2K
             VA Veterans Integrated Service Network
             Magnetic Resonance Imaging
             VA Year 2000 Program
             
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Cover
================================================================ COVER


Report to the Chairman, Subcommittee on Oversight and Investigations,
Committee on Veterans' Affairs, House of Representatives

September 1998

YEAR 2000 COMPUTING CRISIS -
COMPLIANCE STATUS OF MANY
BIOMEDICAL EQUIPMENT ITEMS STILL
UNKNOWN

GAO/AIMD-98-240

Biomedical Items Year 2000 Compliance

(511247)


Abbreviations
=============================================================== ABBREV

  CIO - chief information officer
  FDA - Food and Drug Administration
  HHS - Department of Health and Human Services
  MRI - magnetic resonance imaging
  NIH - National Institutes of Health
  OMB - Office of Management and Budget
  VA - Department of Veterans Affairs
  VHA - Veterans Health Administration
  VISN - Veterans Integrated Service Network

Letter
=============================================================== LETTER


B-280584

September 18, 1998

The Honorable Terry Everett
Chairman, Subcommittee on Oversight
 and Investigations
Committee on Veterans' Affairs
House of Representatives

Dear Mr.  Chairman: 

Biomedical equipment is important to the Veterans Health
Administration's (VHA) role of providing health care services to the
nation's veterans.  This equipment includes medical devices, such as
cardiac defibrillators, cardiac monitoring systems, and pacemakers,
which can record, process, analyze, display, and/or transmit medical
data, and some of which may be implanted in patients, as well as
scientific and research instruments, such as blood gas and glucose
analyzers.  Biomedical equipment may employ computers or computer
chips to operate and/or may be adversely affected by the Year 2000
problem.\1

In addition, the Food and Drug Administration (FDA) of the Department
of Health and Human Services (HHS) has responsibility for oversight
and regulation of medical devices, including the impact of the Year
2000 problem.\2

As you requested, and based on subsequent discussions with your
office, we assessed the status of VHA's and FDA's Year 2000
biomedical equipment programs.  Our assessments of other aspects of
the Veterans Benefits Administrations' and VHA's Year 2000 programs,
including their mission-critical systems, locally developed software
applications, commercial off-the-shelf software products, and
facility systems, were reported to you separately.\3


--------------------
\1 The Year 2000 problem is rooted in how dates are recorded and
computed.  For the past several decades, many existing computer
systems have used a two-digit date field to represent the current
year--such as "98" for 1998.  However, such a format does not
distinguish between 2000 and 1900.  Computer programs that are not
corrected to accommodate the 2000 date could process information
incorrectly, possibly affecting the medical care and safety of
patients. 

\2 The Federal Food, Drug and Cosmetic Act grants FDA authority to
regulate medical devices.  The term medical "device" is defined in 21
U.S.C.  section 321 (h).  For purposes of this report the term
biomedical equipment includes both medical devices subject to FDA
regulation and scientific and research instruments which are not
subject to FDA regulation. 

\3 Year 2000 Computing Crisis:  Progress Made in Compliance of VA
Systems, But Concerns Remain (GAO/AIMD-98-237, August 21, 1998). 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

Since our September 1997 testimony,\4 VHA has made progress in
implementing its Year 2000 strategy for biomedical equipment, which
relies on compliance information from the manufacturers.  As of July
29, 1998, VHA had received information on biomedical equipment
compliance from 73 percent of the 1,490 manufacturers on its list of
suppliers; 701, or 47 percent, of these manufacturers, reported that
their products are Year 2000 compliant. 

In spite of this, VHA does not yet know the full extent of the Year
2000 problem on its biomedical equipment and the associated costs to
address this problem.  This is because, as of July 29, 1998, it had
not received compliance information from 27 percent of the
manufacturers on its list of suppliers, as well as the nearly 100
additional manufacturers that VHA determined are no longer in
business.  Among the manufacturers that had yet to respond or
complete their assessments is one that supplies high-dollar value
equipment, such as radiology systems and electronic imaging systems
equipment, to VHA.\5 Because VHA, like other health care providers,
relies on the manufacturers to validate, test, and certify that their
equipment is compliant, it is critical that they provide this
information to VHA so that it may take prompt action on noncompliant
equipment in its inventory. 

According to VHA's Year 2000 Project Manager, most of the
manufacturers reporting that they had noncompliant equipment cited
incorrect display of date and/or time as problems.  Date and/or time
display problems should not present a risk to patient safety because
health care providers can work around them.  However, some
manufacturers cited problems that could pose a risk to patient
safety.  For example, a radiation therapy planning computer may
miscalculate the radiation source strength on or after January 1,
2000, and the resulting radiation dose may be hazardous or
ineffective for the patient. 

To the extent that noncompliant biomedical equipment has to be
replaced or repaired, the cost estimate reported by the Department of
Veterans Affairs (VA) to the Office of Management and Budget (OMB) is
incomplete.  This is because (1) the estimate is not based on updated
cost information from the medical facilities, (2) some manufacturers
have not provided compliance and cost information to VHA, and (3)
nearly 100 manufacturers are no longer in business.  Furthermore,
VHA's medical facilities have not yet completed development of
business continuity and contingency plans to help ensure the health
and well-being of VHA patients in the event that some biomedical
equipment items fail to operate at the turn of the century, which
poses a risk to patient safety. 

To assist health care facilities in the public and private sectors,
HHS, on behalf of the Chief Information Officer (CIO) Council's
Subcommittee on the Year 2000 for Biomedical Equipment, and FDA
issued a letter in January 1998 to biomedical equipment
manufacturers, requesting information on products affected by this
computer problem.  In contrast to VHA, as of July 30, 1998, FDA had
only received responses from 1,975, or about 12 percent, of the
approximately 16,000 biomedical equipment manufacturers\6 to which
its letter was sent.  According to an FDA official, many of these
manufacturers do not produce any computerized products.  He said most
of these respondents indicated that there are no Year 2000 problems
with their products, but about 100 indicated that at least one of
their products is not compliant.  FDA, like VHA and other health care
providers, relies on the manufacturers to validate, test, and certify
that their equipment is compliant.  Accordingly, failure to obtain
timely compliance information from the manufacturers increases the
risk to health care providers and biomedical equipment users that
their equipment may not operate properly on and after January 1,
2000. 

FDA has made information from the biomedical equipment manufacturers
available through an Internet World Wide Web site.  VHA, however, has
not yet done so because (1) when VHA requested the information from
the manufacturers, VHA did not tell them that it intended to release
the information outside the federal government and (2) VHA said it
had concerns regarding whether it would be proper for it to release
some of the information provided by the manufacturers because the
information may be proprietary.  VHA, on the advice of VA's Acting
General Counsel, informed manufacturers in June 1998 that it plans to
release information that VHA has determined is not confidential
commercial information.  This is an important step because compliance
information from biomedical equipment manufacturers is of interest to
all health care providers and users of biomedical equipment. 


--------------------
\4 Veterans Affairs:  Action Underway Yet Much Work Remains to
Resolve Year 2000 Crisis (GAO/T-AIMD-97-174, September 25, 1997). 

\5 High-dollar value equipment has a purchase price in excess of
$250,000. 

\6 Biomedical equipment refers to both medical devices regulated by
FDA and scientific and research instruments not regulated by FDA. 


   BACKGROUND
------------------------------------------------------------ Letter :2

Biomedical equipment, such as magnetic resonance imaging (MRI)
systems, X-ray machines, cardiac monitoring systems, cardiac
defibrillators, and various other tools for laboratory analysis, are
critical to health and medical treatment and research in federal and
private sector health care facilities.  This equipment may use a
computer for calibration or day-to-day operation.  The computer could
be either a personal computer that connects to the equipment remotely
or a microprocessor chip embedded within the equipment.  In either
case, the controlling software may be susceptible to the Year 2000
problem if any type of date or time calculation is performed.  This
could range from the more benign--such as incorrect formatting of a
printout--to the incorrect operation of the equipment with the
potential to adversely affect patient care or safety.  The degree of
risk depends on the role of the biomedical equipment in the patient's
care. 

VHA manages health care delivery to veterans within 22 regional areas
known as Veterans Integrated Service Networks (VISN).  These VISNs
encompass 172 VHA medical centers, 376 outpatient clinics, 133
nursing homes, and 30 domiciliaries--a total of 711 facilities. 
VHA's biomedical equipment inventory--with its acquisition cost
valued at almost $3 billion--can be found at these facilities.  As
the largest centrally directed civilian health care system in the
United States, VHA is a key stakeholder in determining the Year 2000
compliance of biomedical equipment.  VHA's CIO has overall
responsibility for planning and managing the Year 2000 compliance
program.  The CIO created a VHA Year 2000 Project Office, which
directs and oversees the Year 2000 assessment and renovation
activities in the VISNs. 

Another key player in determining the Year 2000 compliance of
biomedical equipment is FDA.  Under provisions of the Federal Food,
Drug, and Cosmetic Act,\7 as amended, FDA protects public health
through oversight and regulation of medical devices.  FDA regulates
medical devices that use computers or software pursuant to applicable
FDA medical device regulations. 

In September 1997, we testified that both VHA and FDA had just begun
efforts to assess biomedical equipment for Year 2000 compliance.\8
VHA had sent letters to approximately 1,600 biomedical equipment
manufacturers that supply VHA, requesting compliance information for
their products.  We also testified that FDA had sent a letter to
about 13,000 medical device manufacturers in July 1997, reminding
them of their responsibility to ensure that their products will not
be affected by the century change. 


--------------------
\7 21 U.S.C.  sections 301 et.  seq. 

\8 GAO/T-AIMD-97-174, September 25, 1997. 


   OBJECTIVE, SCOPE, AND
   METHODOLOGY
------------------------------------------------------------ Letter :3

The objective of this review was to assess the status of VHA's and
FDA's Year 2000 biomedical equipment programs.  In performing this
review, we applied criteria from our Year 2000 Assessment Guide\9 and
Year 2000 Business Continuity and Contingency Planning Guide.\10 In
assessing the status of VHA's Year 2000 biomedical equipment program,
we reviewed and analyzed VHA documents, including the March 25, 1998,
VISN Assessment Feedback Reports; the January 30, 1998, Assessment
Phase Report; the July 1997 Year-2000 Product Risk Program; the April
30, 1997, and October 31, 1997, versions of the Year-2000 Compliance
Plan; and the May 15, 1998, and August 15, 1998, quarterly reports to
OMB.  We did not independently verify data contained in these
documents.  We met with Year 2000 project teams in three VISNs--VISN
4, VISN 5, and VISN 12--and in VHA medical facilities in Pittsburgh;
Philadelphia; Wilmington, Delaware; Washington, D.C.; Baltimore;
Martinsburg, West Virginia; and Chicago.  We also discussed VA
biomedical equipment assessment and renovation plans and efforts with
members of the Year 2000 Project Office at VHA headquarters in
Washington, D.C. 

To assess the status of FDA's Year 2000 biomedical equipment program,
we reviewed FDA documents on this issue, including those on its
Internet World Wide Web site.  We met with HHS' Director of Policy
and Evaluation in Washington, D.C., and the Director of FDA's
Division of Electronics and Computer Science at the Center for
Devices and Radiological Health, located in Rockville, Maryland. 

We also met with biomedical engineers, who were attending the 1998
annual meeting of the Association for the Advancement of Medical
Instrumentation.  At this meeting, both VHA and FDA officials
presented their respective Year 2000 biomedical equipment programs. 

We performed our work from July 1997 through June 1998, in accordance
with generally accepted government auditing standards.  We requested
written comments on a draft of this report from the Secretary of
Veterans Affairs and the Secretary of Health and Human Services. 
These comments are reprinted in appendixes I and II. 


--------------------
\9 Year 2000 Computing Crisis:  An Assessment Guide
(GAO/AIMD-10.1.14, September 1997). 

\10 Year 2000 Computing Crisis:  Business Continuity and Contingency
Planning (GAO/AIMD-10.1.19, August 1998). 


   VHA HAS MADE PROGRESS IN
   IMPLEMENTING ITS YEAR 2000
   STRATEGY
------------------------------------------------------------ Letter :4

Since our September 1997 testimony, VHA has made progress
implementing its Year 2000 strategy for biomedical equipment.  This
strategy, which depends on compliance information from the
manufacturers, consists of five steps.  These are (1) increase
awareness and continually educate VHA CIOs, VISNs, and health care
facilities on biomedical issues, (2) establish an expert working
group to provide guidance, (3) develop a database of biomedical
equipment manufacturers that supply equipment to VHA, (4) survey
these manufacturers to identify the compliance status of biomedical
equipment and solutions for noncompliance, and (5) communicate survey
results to the field for use in determining the compliance status of
biomedical equipment at the medical facilities.  Each month, these
facilities are expected to report to the VHA Year 2000 Project Office
their strategies for dealing with noncompliant and
conditional-compliant equipment in their inventories and the cost to
accomplish this. 

To increase awareness, VHA has established an intranet web site
containing compliance information from the manufacturers.  This web
site is also used to educate VHA CIOs, VISNs, and health care
facilities on biomedical issues.  VHA has also established an expert
working group\11 to assist the Year 2000 Project Office in
identifying, assessing, and evaluating biomedical equipment at risk
from the Year 2000 problem. 

VHA developed a database of biomedical equipment manufacturers by
using an existing database, which tracks service manuals of both
medical devices and scientific and research instruments purchased by
its medical facilities.  The expert working group reviewed the
database to ensure that key manufacturers in specialty areas were
included. 

To survey biomedical equipment manufacturers, the VHA Year 2000
Project Office sent a series of letters to them requesting
information on the Year 2000 compliance status of their products. 
The first letter was sent to approximately 1,600 manufacturers on
September 9, 1997.  Two follow-up letters were sent to those that did
not respond on October 6, 1997, and November 12, 1997.  Upon receipt
of responses to these letters, VHA categorized the compliance status
provided by the manufacturers for the equipment, as illustrated in
table 1. 



                                Table 1
                
                  VHA Biomedical Equipment Compliance
                               Categories

Category            Explanation
------------------  --------------------------------------------------
Compliant           Equipment will function properly in all aspects
                    upon the change to the year 2000 without any
                    modification or revision.

Noncompliant        Equipment will not function properly upon the
                    change to the year 2000, and no manufacturer
                    remedy is available. In some cases, improper
                    function involves an incorrect date-time stamp on
                    the output of the equipment, but the equipment's
                    clinical function is not impaired.

Conditional-        Equipment requires some form of user intervention
compliant           to function properly after the year 2000. Such
                    intervention includes the installation of
                    manufacturer-provided software or hardware or a
                    one-time user action (such as turning the
                    equipment on and off after the year 2000).

Pending             Manufacturers reported to VHA that they have not
                    completed the Year 2000 assessment of their
                    product line.
----------------------------------------------------------------------
Source:  Veterans Health Administration. 

Of the nearly 1,600 manufacturers in VHA's initial mailing, VHA
determined that about 100 were no longer in business.  Accordingly,
VHA revised its list of manufacturers to 1,504 as of June 1, 1998,
and reported that it received compliance information from 1,070, or
71 percent, of these manufacturers.  Just under half of the 1,504
manufacturers reported that all of their devices are Year 2000
compliant. 

As shown in table 2, the manufacturers have provided VHA with
compliance information on a wide range of biomedical equipment. 
VHA's data, as of June 1, 1998, indicated that for those
manufacturers that reported, at least 80 percent of the equipment
types are compliant.  According to VHA's Year 2000 Project Manager,
the expert working group reviews the information provided by the
manufacturers for reasonableness.  The Year 2000 Project Office has
provided this information to its medical facilities through VHA's
intranet web site, and the facilities are to use the information to
assess the compliance status of their equipment. 



                                Table 2
                
                Reported Biomedical Equipment Year 2000
                  Compliance Categories, as of June 1,
                           1998, and Examples

                                                         Examples of
                                              Number of  equipment
                                              equipment  types within
                               Number of   types within  this
Compliance category        manufacturers  this category  category\a
-------------------------  -------------  -------------  -------------
Compliant                            694          3,873  Intra-aortic
                                                          balloon
                                                          pump,
                                                          dialysis
                                                          machine
Noncompliant                          34            182  Defibrillator
                                                          monitor,
                                                          cardiology
                                                          monitor \
Conditional-compliant                102            673  Electrocardio
                                                          graph
                                                          machine,
                                                          defibrillato
                                                          r
Pending                               53            157  Ultrasound
                                                          system,
                                                          ventilator
Manufacturer merged or               187             \b
 bought out
======================================================================
Total                              1,070          4,885
----------------------------------------------------------------------
\a Inclusion of a specific type of biomedical equipment in the
compliant, noncompliant, conditional-compliant, or pending category
does not necessarily mean that all equipment of this type in VHA's
inventory was reported by the manufacturer; similar equipment made by
other manufacturers could fall into different categories. 

\b The biomedical equipment reported by these manufacturers have
already been accounted for in one of the above compliance categories. 

Source:  Veterans Health Administration.  We did not independently
verify these data. 

According to VHA officials, most of the manufacturers that reported
one or more of their biomedical equipment products as noncompliant
cited incorrect display of date and/or time as problems.  For
example, a noncompliant electrocardiograph machine, used to monitor
heart signals, would print charts with two-digit dates, showing the
year 2000 as "00." According to the Diagnostic Services Chief of
VHA's Technology Division, these cases do not generally lead to the
equipment failing to operate and do not present a risk to patient
safety because health care providers, such as physicians and nurses,
are able to work around this problem.  For example, a physician or
technician would note the correct year on the printout from the
electrocardiograph machine when the equipment imprints "1900" on the
printout. 

However, VHA recognizes that incorrect date-time representation or
use could pose a risk when the date is used in a calculation or when
records generated by the equipment is sorted automatically to present
a patient's condition, over a period of time, to a physician for
diagnosis and treatment.  Specifically, when records are sorted by
date of recording, the accuracy of such dates can be critical to a
physician's monitoring of patient progress in, for example, the case
of blood sugar readings.  If readings were taken on December 25, 27,
and 30, 1999, and again on January 1, 2000, for example, the ordering
might appear with the last entry first, if it were abbreviated as
"00" and read as January 1, 1900.  If the physician or other
clinician did not pay close attention, a faulty diagnosis or
treatment decision could be made based on a misreading of the data. 

VHA also recognizes that an equipment function that depends on a
calculation involving a date and that is performed incorrectly as a
result of a date problem, could present a risk to the patient.  One
example reported by a manufacturer is a product used for planning the
delivery of radiation treatment using a radioactive isotope as the
source.  An error in the calculation of the radiation source's
strength could result in inappropriate treatment--either too low or
too high a dosage--and could have an adverse effect on the patient on
or after January 1, 2000.  This noncompliant equipment is currently
in the inventory of several VHA medical facilities.  In commenting on
a draft of this report, VA noted that VHA has identified three
facilities that use this specific equipment, and the noncompliant
equipment will be taken out of service. 

Given the above case scenarios, it is crucial that biomedical
equipment manufacturers provide VHA with information on the
compliance status of their equipment.  This information is necessary
for VHA medical facilities to formulate safe and effective solutions
to address Year 2000 problems. 

Between November 1997 and January 1998, VHA's medical facilities
completed inventories of their biomedical equipment and reported the
results to the Year 2000 Project Office.  Using data on the
facility's biomedical equipment inventory from VHA's equipment
database, each facility was to conduct a physical inventory of its
biomedical equipment and check this inventory against compliance
information submitted by the manufacturers, which the Year 2000
Project Office had posted on the VHA intranet web site. 

According to VHA's January 30, 1998, Year 2000 Assessment Phase
Report, the medical facilities noted that based on the information
from the manufacturers, some of the noncompliant biomedical equipment
at VHA sites included defibrillator monitors, noninvasive blood
pressure machines, vital signs monitors, and cardiology monitors. 
VHA officials have stressed that noncompliant equipment of one type
reported by certain manufacturers does not indicate that all
equipment of the same type in use at its medical facilities is
noncompliant.  VHA officials told us that there are other
manufacturers of this equipment type that have reported that their
equipment is compliant. 

The VHA Year 2000 Project Office has directed VHA medical facilities
to regularly check the web site for updates on the compliance status
of biomedical equipment reported by manufacturers.  This is important
for the medical facilities because, in some cases, the manufacturers
have subsequently changed the compliance status of their equipment
after their initial reports to VHA.  The changes have ranged from
some equipment previously reported as conditional-compliant that is
now being reported as compliant to equipment previously reported as
compliant that is now considered noncompliant.  According to VHA's
Year 2000 Project Manager, the project office monitors the medical
facilities' Year 2000 activities through periodic reports and site
visits. 

VHA officials have informed us that they will be relying on the
biomedical equipment manufacturers to validate, test, and certify
that replacement equipment is Year 2000 compliant.  This is because
some manufacturers have informed them that VHA should not attempt to
conduct in-depth testing by manipulating the software embedded inside
the equipment.  According to the Diagnostic Services Chief of VHA's
Technology Division, such testing may void the manufacturer's
certification to FDA that the equipment is safe for use on patients,
thereby exposing VHA to legal liability in the event that a patient's
health is harmed by equipment that malfunctions following VHA
testing.  VHA's Year 2000 Project Manager told us that the medical
facilities will perform limited functional testing of replacement
equipment and of manufacturer modifications to conditional-compliant
equipment.  He stated that the medical facilities will test equipment
performance in accordance with locally established acceptance testing
procedures for new equipment.\12


--------------------
\11 This group consists of physicians and engineers from the fields
of radiology, nuclear medicine, pathology and laboratory, cardiology,
surgery, biomedical engineering, acquisition and materiel management,
medical research, prosthetics, and the Year 2000 Project Office. 

\12 These procedures generally prescribe that a systematic
examination be performed to determine if the equipment meets the
electrical safety requirements of the medical facility and the
manufacturer's performance specifications for the equipment. 


   UNCERTAINTY OVER YEAR 2000
   COMPLIANCE STATUS INCREASES
   RISK
------------------------------------------------------------ Letter :5

Despite VHA's progress in implementing its Year 2000 strategy, as of
July 29, 1998, it still did not know the full extent of the Year 2000
problem on its biomedical equipment because it has not received
compliance and cost information from 27 percent of the manufacturers
on its list of suppliers, as well as from nearly 100 additional
manufacturers that are no longer in business.  This situation impedes
VHA's medical facilities from promptly developing strategies to deal
with equipment with potential patient safety problems.  In addition,
the current cost estimate of $40 million\13 reported to OMB to
replace or repair noncompliant equipment is incomplete.  Also, given
the uncertainties surrounding the compliance status of many VHA
biomedical equipment items, it is critical that medical facilities
develop contingency plans to ensure patient care in the event of Year
2000-related failures.  However, the medical facilities have not
completed such plans. 


--------------------
\13 We did not independently verify the $40 million cost estimate. 


      SOME MANUFACTURERS HAVE NOT
      PROVIDED COMPLIANCE
      INFORMATION ON THEIR
      EQUIPMENT
---------------------------------------------------------- Letter :5.1

VHA does not currently know how much of its biomedical equipment is
Year 2000 compliant because, as shown in table 3, it has not yet
received compliance information from 398 manufacturers.  This
information is critical to VHA because, like other health care
providers, it relies on the manufacturers to validate, test, and
certify that their equipment is compliant. 



                                Table 3
                
                 Status of Manufacturer Responses as of
                             July 29, 1998

                                                             Number of
Status of manufacturer response                          manufacturers
--------------------------------------------------  ------------------
Compliant manufacturers\a                                          701
Noncompliant manufacturers\b                                        43
Conditional-compliant manufacturers\c                              106
Pending manufacturers\d                                             47
Manufacturer merged or bought out                                  195
Nonresponsive manufacturers\e                                      398
======================================================================
Total                                                            1,490
----------------------------------------------------------------------
\a For inclusion in this category, 100 percent of a manufacturer's
products had to be considered compliant. 

\b For inclusion in this category, only one of a manufacturer's
products had to be considered noncompliant. 

\c For inclusion in this category, the manufacturer has no
noncompliant equipment, no pending equipment, and at least one
conditional-compliant equipment item. 

\d For inclusion in this category, the manufacturer has no
noncompliant equipment and at least one equipment item that is
pending. 

\e For inclusion in this category, VHA had not received compliance
information from the manufacturer. 

Source:  Veterans Health Administration.  We did not independently
verify these data. 

Letters sent to more than half of the nonresponsive
manufacturers--227 out of 398--were returned to VHA by the U.S. 
Postal Service marked with no forwarding addresses.  In addition, as
noted in table 3, an additional 47 manufacturers that did respond are
in the pending category because they reported that they had not
completed their assessments, and, therefore, did not yet know if
their products were compliant.  Among the manufacturers that had not
yet responded or completed their assessments as of July 29, 1998, is
one that supplies high-dollar value equipment, such as radiology
systems and electronic imaging systems equipment, to VHA. 

According to the Year 2000 Project Manager, VHA will continue its
efforts to obtain compliance information from nonresponding
manufacturers.  Consistent with this strategy, on June 24, 1998, VHA
sent another letter to nonresponsive manufacturers requesting that
they provide VHA with Year 2000 compliance information on their
products.  The Project Manager said VHA will continue to work through
October 1998 to obtain compliance information from the manufacturers. 
Further, he said at that time, VHA's medical facilities must be ready
to put contingency plans into effect for noncompliant and
conditional-compliant equipment and for that equipment, the status of
which is unknown. 


      YEAR 2000 COST ESTIMATE FOR
      BIOMEDICAL EQUIPMENT IS
      INCOMPLETE
---------------------------------------------------------- Letter :5.2

VHA's Year 2000 cost estimate for replacing and/or retiring
noncompliant biomedical equipment is incomplete.  In its August 15,
1998, quarterly report to OMB, VA estimated the Year 2000 cost to
replace or repair this equipment at $40 million.  It also reported
that VA expects the costs to replace or repair noncompliant
biomedical equipment to increase as manufacturers continue to
disclose their compliance status.  The VHA Year 2000 Project Manager
told us that VHA expects to manage these costs within the
department's budget.  However, the $40 million estimate is not based
on updated cost information from the medical facilities, and VHA does
not know the replacement and repair cost for biomedical equipment for
the manufacturers that have not reported compliance and cost
information, as well as the nearly 100 manufacturers that are no
longer in business. 

VHA's Year 2000 Project Manager informed us that three quarters of
the $40 million estimate was calculated based on cost information
provided by the VISNs and medical facilities.  Specifically, the
VISNs and facilities reported to the Year 2000 Project Office the
number of noncompliant and/or conditional-compliant equipment items
in their inventories and the replacement or repair cost for this
equipment using information provided to VHA by the manufacturers and
posted on its intranet web site in January 1998.  The remaining $10
million was calculated based on the VHA Year 2000 Project Office's
estimate of the number of such equipment items at VHA medical
facilities and any cost information provided by manufacturers during
the period February through April 1998. 

VHA's Year 2000 Project Manager has acknowledged the shortcomings of
the current cost estimate.  Accordingly, the VISNs were to begin
using a new reporting process, effective July 31, 1998.  The new
process will use a recently developed software package to track the
status of noncompliant and conditional-compliant equipment at the
medical facilities and the associated costs to replace, repair, or
retire it.  In commenting on a draft of this report, VA stated that
this software was released on July 10, 1998, and the Under Secretary
for Health signed an information letter, providing direction and
instruction on the software to VHA medical facilities on July 20,
1998. 


      VHA HAS NOT YET COMPLETED
      BUSINESS CONTINUITY AND
      CONTINGENCY PLANS FOR
      BIOMEDICAL EQUIPMENT
---------------------------------------------------------- Letter :5.3

To assist agencies in their business continuity and contingency
planning efforts, we have prepared a guide\14 that discusses the
scope of the Year 2000 challenge and offers a step-by-step approach
for reviewing an agency's risks and threats as well as how to develop
backup strategies to minimize these risks.  This business continuity
and contingency planning process safeguards the agency's ability to
produce a minimally acceptable level of outputs and services in the
event of failures of internal or external mission-critical
information systems and services.  A business-level contingency plan
would address how each VHA medical facility would handle various
types of Year 2000 problems caused by business partner problems, such
as nonresponsive manufacturers and the nearly 100 manufacturers that
VHA determined were no longer in business. 

Despite the uncertainties surrounding the compliance status of many
of VHA's biomedical equipment and the potential health risks to
patients of certain equipment, VHA medical facilities have not yet
completed business continuity and contingency plans on actions they
must take to address potential Year 2000-related failures.  The Year
2000 Project Manager informed us that these plans need to be ready
for implementation by October 31, 1998.  He did not know the status
of these plans because the project office had not reviewed them.  The
Project Manager told us that he expects to review these plans when
Year 2000 Project Office representatives visit the VISNs and medical
facilities later in 1998. 

Our review of the March 25, 1998, VISN Assessment Feedback Reports\15
for the three VISNs we visited showed that these VISNs had reported
that they did not have business continuity and contingency plans to
deal with 76 of the 89 noncompliant biomedical equipment items
identified in their inventories.  The CIOs at two of these VISNs
informed us that they are currently in the process of developing
these plans.  The third CIO said the VISN's medical facilities have
prepared business continuity and contingency plans.  However, our
review of four of the five plans for this VISN disclosed that these
plans did not specifically address Year 2000-related failures of
biomedical equipment.  Instead, they focused on preventative
maintenance inspections and general system and equipment failures. 

In light of the uncertainties surrounding the compliance status of
VHA's biomedical equipment and their potential effect on patient
health and safety, it is crucial that medical facilities be prepared
in the event of Year 2000 failures.  An official in VHA's Year 2000
Project Office told us that the office is in the process of
developing a guidebook to assist the VISNs and medical facilities in
addressing Year 2000 business continuity and contingency planning for
biomedical equipment and other related issues.  The Year 2000 Project
Manager said the guidebook will discuss VHA's strategy for obtaining
information from nonresponsive manufacturers and address issues such
as replacing, repairing, and/or retiring noncompliant biomedical
equipment and equipment produced by the nearly 100 manufacturers no
longer in business; using the new reporting software for biomedical
equipment; procuring compliant biomedical equipment; and having
adequate facility staff available on the weekend of January 1, 2000. 
In commenting on a draft of this report, VA noted that a draft of the
guidebook was completed on August 6, 1998, and it expects to issue a
final guidebook by September 1998. 


--------------------
\14 GAO/AIMD-10.1.19, August 1998. 

\15 These reports, prepared by VHA's Year 2000 Project Office,
provide feedback to each VISN on its reported January 1998 assessment
results and suggest actions that should be taken to enhance the Year
2000 assessment and renovation process at the facility and VISN
level. 


   FDA IS ALSO RELYING ON
   BIOMEDICAL EQUIPMENT
   MANUFACTURERS FOR COMPLIANCE
   INFORMATION
------------------------------------------------------------ Letter :6

FDA, the agency with oversight and regulatory responsibility for
domestic and imported medical devices, is also trying to determine
the Year 2000 compliance status of these devices, as well as some
scientific and research instruments.  Its goal is to provide a
comprehensive, centralized source of information on the Year 2000
compliance status of biomedical equipment used in the United States
and make this information publicly available on an Internet World
Wide Web site. 

On January 21, 1998, HHS, on FDA's behalf, issued a letter to
approximately 16,000 domestic and foreign biomedical equipment
manufacturers\16 requesting information on the Year 2000 compliance
of their complete product line.\17 The letter stated that all
information received would be made available to the public through
FDA's web site.  Manufacturers were asked to identify any
noncompliant products by type and model number and provide a brief
description of the date-related problems and the solutions for
mitigating the problems.  If all the manufacturer's products were
considered compliant, the manufacturer was asked to provide a
statement certifying such compliance.  In this case, the manufacturer
did not have to provide information on the compliant device's make
and model.  Manufacturers were instructed to forward their responses
in writing or electronically to FDA's Center for Devices and
Radiological Health. 

FDA acknowledges that the response rate to date to the January 1998
letter is disappointing.  As of July 30, 1998, FDA had received 1,975
responses from biomedical equipment manufacturers and posted them on
its web site.  The Director of FDA's Division of Electronics and
Computer Science cited several reasons for the low response rate,
including manufacturers not yet completing their assessments and the
manufacturers' responses to FDA's request being voluntary.  He also
indicated that the vast majority of manufacturers that received
letters from FDA do not make products with any sort of electronic
components, and he believed that many of these manufacturers chose
not to respond because the request did not pertain to them. 

On June 29, 1998, FDA sent a second request to 1,935 medical device
manufacturers that had not previously responded to its inquiry and
that FDA believes have products that might employ computers or
embedded systems.  According to the Director, as of July 30, 1998,
628 manufacturers reported that their products employ a date/time
function.  Of these, about 100 indicated that one or more of their
products were not compliant. 

According to the Director of FDA's Division of Electronics and
Computer Science, FDA does not perform technical evaluations of the
manufacturers' responses to determine their adequacy.  Rather, the
Director, his secretary, and a biomedical engineer review the
manufacturers' submissions to see if the responses included answers
to the questions in the January 1998 letter.  He said that FDA relies
on the manufacturers to certify whether their products are Year 2000
compliant.  FDA's web site includes the statement that

     "Inclusion of information in this database indicates that the
     manufacturer has certified that the data is complete and
     accurate.  The Food and Drug Administration, however, cannot and
     does not make any independent assurances or guarantees as to the
     accuracy or completeness of this data."\18

The Director informed us that except for diagnostic X-ray equipment,
FDA does not test new medical devices entering the market.  In
addition, he said that FDA has performed about 8 to 10 tests per year
involving forensic investigations of problem devices.  In commenting
on a draft of this report, HHS stated that FDA tests this equipment
during the premarket review process to ensure that it is in
compliance with a mandatory federal performance standard for X-ray
equipment.  It also indicated that the testing of this equipment does
not include compliance with Year 2000 requirements. 

According to the Director, FDA reviews the test results submitted by
manufacturers requesting premarket approval of their medical devices
to see if the manufacturers have demonstrated that products are safe
and effective for intended use.  When asked if FDA will request test
reports from manufacturers that have renovated medical devices that
are not Year 2000 compliant, the Director informed us that FDA will
not.  He said that correcting a date problem does not change the
design of the device, and it is the manufacturers' responsibility to
ensure proper device design.  We disagree with the Director that the
date change will not change the design of the device.  Correcting the
date problem will change the software design of the device and may
alter the internal logic of the software.  The Director also cited
staff limitations as another reason for not requesting and reviewing
test results from the manufacturers. 


--------------------
\16 FDA developed its mailing list from the manufacturers that have
registered their products with the FDA and also the mailing lists of
two scientific and research instrument manufacturing associations. 
Accordingly, this list included manufacturers that do not employ
computers or embedded systems in their products, e.g., products such
as rubber gloves, tongue depressors, and eyeglasses. 

\17 For FDA, compliance means that the product will accurately
process and store date/time data (including but not limited to
calculating, displaying, recording, and sequencing operations
involving date/time data) during, from, into, and between the 20th
and 21st centuries, including the correct processing of leap year
data. 

\18 Food and Drug Administration, Year 2000 Impact on Biomedical
Equipment, (Washington, D.C., FDA),
http://www.fda.gov/cdrh/yr2000/y2kintro.html, (cited March 19, 1998). 


      SOME USERS QUESTION
      USEFULNESS OF CURRENT FDA
      BIOMEDICAL EQUIPMENT WEB
      SITE
---------------------------------------------------------- Letter :6.1

While FDA is making an effort to assemble information on biomedical
equipment compliance and making this information available to the
public, some biomedical engineers attending a June 1998 meeting of
the Association for the Advancement of Medical Instrumentation
expressed concern that information on the FDA web site is not
detailed enough to be useful.  Specifically, as mentioned earlier,
FDA's list of compliant equipment contains no information on the
equipment's make and model.  In contrast, VHA's list of compliant
equipment generally contains such information. 

Also, a review of the FDA database for noncompliant equipment
disclosed that some manufacturers have reported that they will have
solutions for their equipment in late 1999.  Putting off solutions
until this late date is risky.  However, making this information
publicly available does provide hospitals and other users of
biomedical equipment with the opportunity to plan alternative
solutions. 

Further, the Year 2000 compliance information publicly available
through FDA does not include responses from many of the manufacturers
that have responded to VHA.  For example, we selected, on a random
basis, a sample of 53 manufacturers in VHA's database that reported
their products to be Year 2000 compliant and found that 48 of them
were not listed in the FDA database.  We, likewise, selected a sample
of 13 manufacturers in VHA's database that reported that their
products are not Year 2000 compliant, and found that 12 of them were
not listed in the FDA database.  These manufacturers' products
include cardiology equipment, defibrillator monitors, and ultrasound
equipment. 

The Director of FDA's Division of Electronics and Computer Science
acknowledged that the manufacturers were more responsive to VHA's
requests, and the VHA database, therefore, contains a higher
percentage of responses.  He said that he believed the primary reason
for this was VHA's position as a large volume customer that could
take future action toward the manufacturer if the information was not
forthcoming.  He also noted that FDA requested information on the
complete product line of the manufacturers, while VA requested
information from the manufacturers on its list of suppliers. 


      NEW REPORTING REQUIREMENTS
      IDENTIFY MEDICAL DEVICES
      POSING HEALTH RISK
---------------------------------------------------------- Letter :6.2

FDA implemented a new rule\19 on May 18, 1998, requiring medical
device manufacturers and importers to report promptly to FDA action
to correct and remove devices that pose a health risk or that are in
violation of the Federal Food, Drug, and Cosmetic Act.\20 This rule
protects public health by ensuring that FDA has current and complete
information regarding actions taken on medical devices.  These
reports are expected to improve FDA's ability to evaluate
device-related problems, as well as enable it to take prompt action
regarding devices, that pose a health risk.  Under the new rule, the
affected manufacturer is required to submit a report of action taken
to correct the problem or remove the device from service. 

According to the Director of the Center for Devices and Radiological
Health, under the new rule, FDA has a better chance of learning what
corrective actions, including those to address the Year 2000 computer
problem, are taken by the manufacturers on medical devices that could
pose health risks.  The Director said that no manufacturers have yet
submitted any reports under this new reporting requirement. 


--------------------
\19 21 CFR part 806.  The regulation implements provisions of the
Safe Medical Devices Act of 1990 (P.L.  101-629). 

\20 21 U.S.C., sections 301 et seq. 


   VHA PLANS TO MAKE COMPLIANCE
   INFORMATION AVAILABLE TO THE
   PUBLIC
------------------------------------------------------------ Letter :7

In contrast to FDA, VHA had not been making information obtained from
biomedical equipment manufacturers on the Year 2000 compliance status
of their products available to the public through an Internet World
Wide Web site.  VHA has not yet done so because (1) when VHA
requested this information from the manufacturers, VHA did not tell
them that it intended to release the information outside the federal
government and (2) VHA said that it had concerns regarding whether it
would be proper for it to release some of the information provided by
the manufacturers because the information may be proprietary.  The
VHA Year 2000 Project Manager told us that VHA believed it would need
the manufacturers' permission before it could share this information. 
He said that VHA is concerned about the proprietary nature of the
products, potential legal issues, and manufacturers' price structure
for Year 2000 compliant products.  VHA had shared some of Year 2000
compliance status information provided by manufacturers with federal
agencies, such as the Department of Defense and the National
Institutes of Health (NIH), with the caveat that it was for federal
use only.  NIH then shared this information with FDA. 

VHA, on the advice of the VA Acting General Counsel, has recently
informed the manufacturers of its plans to make this information
available to the public through an Internet World Wide Web site. 
Specifically, on June 17, 1998, VHA mailed letters to manufacturers
that had responded to VHA's previous requests for compliance
information.  It informed the manufacturers that it intended to place
information they provided to VHA on a publicly-available World Wide
Web site unless the manufacturers informed it otherwise.  VHA
included similar language in a June 24, 1998, letter to manufacturers
that had not yet provided compliance data.  The VHA Year 2000 Project
Manager said the response from the manufacturers as of June 30, 1998,
has been positive.  He added that two manufacturers objected to
disclosing this information to the public, citing proprietary
reasons.  These responses have been referred to VA's legal
department. 

VA has not yet decided how and when a clearinghouse of compliance
information provided to VHA from manufacturers will be made available
to the public.  According to VHA's Year 2000 Project Manager, the FDA
web site is one of the options being considered for the
clearinghouse.  The Director of FDA's Division of Electronics and
Computer Science informed us that FDA and VHA have discussed using
FDA's web site as such a clearinghouse. 

VA's Under Secretary of Health recognizes the importance of gathering
compliance data and sharing them publicly.  Specifically, in a July
9, 1998, press conference sponsored by the National Patient Safety
Partnership,\21 he called on biomedical equipment manufacturers to
identify and address potential patient safety problems resulting from
the Year 2000 problem.  On behalf of the partnership, he called for
(1) all health care practitioners and medical treatment facilities to
survey their equipment and seek information from their relevant
biomedical equipment manufacturers about their products' Year 2000
compatibility, (2) all health care consumers who use biomedical
equipment at home to check with their health care providers about the
products' Year 2000 compatibility, (3) the medical equipment
manufacturers to take immediate action to determine the compliance
status of their equipment, and (4) the establishment of a single,
national clearinghouse from which compliance information from
manufacturers can be readily accessed by the public.  The Under
Secretary reiterated these four items in a July 23, 1998, hearing
before the Senate Special Committee on Year 2000. 


--------------------
\21 The National Patient Safety Partnership is a coalition of public
and private health care providers, including VA, the American Medical
Association, the American Hospital Association, the American Nurses
Association, and the Joint Commission on Accreditation of Healthcare
Organizations. 


   CONCLUSIONS
------------------------------------------------------------ Letter :8

Prompt correction of the Year 2000 problem for biomedical equipment
is critical to VHA's role as a health care provider.  Although VHA
has made progress in assessing its biomedical equipment, it does not
yet know the full extent of the Year 2000 problem with this equipment
and the associated costs to address this problem because it has not
received compliance information from many of the manufacturers.  This
information is important because VHA relies on the manufacturers to
validate, test, and certify that their equipment, including
replacement equipment, is compliant.  Despite these uncertainties,
VHA medical facilities have not yet completed business continuity and
contingency plans on actions they must take to address Year
2000-related failures.  The Year 2000 Project Office also has not yet
completed a Year 2000 contingency guidebook for biomedical equipment
to assist the VISNs and medical facilities in their business
continuity and contingency planning and other activities.  Until
these issues are resolved, VHA lacks adequate assurance that its
delivery of medical care through the use of biomedical equipment will
not be adversely affected by the Year 2000 problem. 

FDA's goal is to provide a comprehensive, centralized source of
information on the Year 2000 compliance status of biomedical
equipment used in the United States, and make this information
publicly available on an Internet World Wide Web site.  FDA, like
VHA, relies on the manufacturers to validate, test, and certify that
the equipment is Year 2000 compliant.  However, FDA has no assurance
that the manufacturers have adequately addressed the Year 2000
problem for noncompliant equipment because it does not require
manufacturers to submit test results to FDA certifying compliance. 
Also, FDA does not have as much information in its database on the
compliance status of biomedical equipment as VHA. 

Finally, VHA, which currently does not make compliance information
obtained from the manufacturers available to the public, now plans to
do this through an Internet World Wide Web site.  The sharing of this
information could greatly assist all health care providers and other
users of biomedical equipment in identifying noncompliant and
conditional-compliant equipment in their inventories and taking
prompt action to make them compliant.  Sharing also could provide
users with a mechanism to overcome the deficiencies in the FDA
database, such as the lack of detailed information on the make and
model of compliant equipment and the disappointing response rate from
manufacturers to FDA's request for compliance information. 


   RECOMMENDATIONS TO THE
   SECRETARY OF VETERANS AFFAIRS
------------------------------------------------------------ Letter :9

We recommend that the Secretary of Veterans Affairs direct the Under
Secretary for Health to take prompt action to: 

  -- Ensure that the VISNs and medical facilities use the new
     reporting system to provide the VHA Year 2000 Project Office
     with up-to-date and more complete information on the cost to
     replace and/or repair noncompliant and conditional-compliant
     biomedical equipment. 

  -- Complete and issue as soon as possible to the VISNs and medical
     facilities a Year 2000 guidebook on how to address contingency
     planning and other related issues for biomedical equipment for
     incorporation in their individual Year 2000 plans. 

  -- Require that each VISN director ensure that medical facilities
     within the VISN complete development of a Year 2000 business
     continuity and contingency plan for biomedical equipment in its
     inventory.  This plan should address steps the facility will
     take on (1) biomedical equipment produced by the manufacturers
     from which VHA has not received compliance information and the
     nearly 100 manufacturers no longer in business, (2) noncompliant
     equipment that have date-time problems but can still be safely
     used on and after January 1, 2000, and (3) equipment that
     manufacturers have certified as compliant but that may cease to
     function or malfunction on and after January 1, 2000. 


   RECOMMENDATIONS TO THE
   SECRETARY OF VETERANS AFFAIRS
   AND THE SECRETARY OF HEALTH AND
   HUMAN SERVICES
----------------------------------------------------------- Letter :10

We recommend that the Secretary of Veterans Affairs and the Secretary
of Health and Human Services work jointly to develop immediately a
single data clearinghouse that provides compliance information to all
users of biomedical equipment.  Development of this clearinghouse
should involve representatives from the health care industry, such as
the Department of Defense's Health Affairs, American Hospital
Association, American Medical Association, and Health Industry
Manufacturers Association.  At a minimum, the clearinghouse should
contain (1) information on the compliance status of all biomedical
equipment by make and model, (2) the identity of manufacturers that
are no longer in business, including the types of equipment, makes,
and models produced by these manufacturers, (3) the identity of
manufacturers that have and have not provided VHA and/or FDA with
test results certifying that their equipment is Year 2000 compliant,
and (4) the identity of manufacturers that have not provided
compliance information to VHA and/or FDA. 

We also recommend that the Secretary of Veterans Affairs and the
Secretary of Health and Human Services, in conjunction with VA's
Under Secretary for Health and the Commissioner of the Food and Drug
Administration,

  -- determine what actions, if any, should be taken regarding
     biomedical equipment manufacturers that have not provided VHA
     and/or FDA with compliance information;

  -- determine what actions, if any, are needed to address biomedical
     equipment produced by manufacturers no longer in business;

  -- take prudent steps to review the test results for critical
     care/life support biomedical equipment, especially equipment
     once determined to be noncompliant but now deemed compliant, and
     that for which there are concerns about the determination of
     compliance, and make the results of these reviews publicly
     available through the single data clearinghouse; and

  -- determine what legislative, regulatory, or other changes are
     necessary to obtain assurances that the manufacturers' equipment
     is compliant, including performing independent verification and
     validation of the manufacturers' certification. 


   AGENCY COMMENTS AND OUR
   EVALUATION
----------------------------------------------------------- Letter :11

In commenting on a draft of this report, VA generally concurred with
our recommendations to the Secretary of Veterans Affairs and the
first of two joint recommendations to the Secretary of Veterans
Affairs and the Secretary of Health and Human Services to develop a
single data clearinghouse.  VA stated that VHA is working closely
with other federal agencies, such as the Department of Defense and
FDA, to address common problems with biomedical, clinical, and
laboratory equipment and facilities.  VA also noted that it has
joined with the American Hospital Association, the American Nurses
Association, and the Joint Commission on the Accreditation of
Healthcare Organizations in calling for a joint effort to create a
national clearinghouse for Year 2000 information. 

VA stated that the percentage of manufacturers not responding to
VHA's inquiries is now 14 percent, meaning an 86 percent response
rate.  However, VHA counted letters returned to VHA by the U.S. 
Postal Service marked with no forwarding address as responses. 
Because these manufacturers did not provide VHA with information on
the compliance status of their products, the response rate from
manufacturers, based on updated information provided to us by VA as
of July 29, 1998, is 73 percent, only slightly above the 71 percent
rate cited in our draft report. 

VA also described actions taken and planned to implement our
recommendations, as well as a number of suggested changes to this
report.  These comments have been incorporated into the report as
appropriate and are reprinted in appendix I. 

Regarding our second joint recommendation to the Secretary of
Veterans Affairs and the Secretary of Health and Human Services, VA
stated that it has no legislative or regulatory authority to
implement this recommendation and defers to HHS.  VA, however, stated
that it will provide consultation or other appropriate assistance to
HHS in implementing this recommendation. 

HHS, in commenting on a draft of this report, also concurred with the
joint recommendation to the Secretary of Veterans Affairs and the
Secretary of Health and Human Services to develop a single data
clearinghouse.  It stated that HHS and VA are merging their efforts
to provide complete information to the health care community and the
general public regarding the Year 2000 compliance of biomedical
equipment.  It also stated that FDA will post on the web site the
names of manufacturers that have not provided compliance
certification.  However, HHS did not believe that it is necessary or
cost-effective to list all compliant products.  It believed that
information at the individual model level is only needed for
noncompliant products.  We disagree with HHS.  The make and model
information will provide users with detailed data on the reported
compliance status of their products, especially for those 195
manufacturers that VA has determined to have merged or been bought
out by other manufacturers as of July 29, 1998. 

In addition, HHS concurred with two of the three components of the
second joint recommendation.  Specifically, it concurred with the
component of the recommendation to determine the actions that should
be taken regarding manufacturers who fail to respond to requests for
compliance information.  HHS also stated that under current
regulations, FDA does not have the authority to require all device
manufacturers to submit reports on whether their devices are Year
2000 compliant. 

HHS also concurred that the identity of defunct manufacturers, along
with the known types, makes, and models of devices they manufactured
should be included in the clearinghouse database.  It further stated
that it would explore possible approaches to acquiring additional
information regarding defunct manufacturers' products. 

HHS did not concur with the component of the recommendation to review
test results supporting the medical device equipment manufacturers'
certifications that their equipment is compliant.  It believed that
the submission of appropriate certifications of compliance is
sufficient to ensure that the certifying manufacturers are in
compliance.  We disagree that this is sufficient.  Through
independent reviews of the manufacturers' test results, users of the
medical devices are provided with a level of confidence that the
devices are Year 2000 compliant.  HHS also stated that it did not
have the resources to undertake such a review, and there is
insufficient time to complete a review of this nature.  In this
regard, if HHS lacks sufficient resources to review the
manufacturers' test results, it may want to solicit those of federal
health care providers and professional associations, such as VA and
the National Patient Safety Partnership.  Additionally, to make
effective use of limited resources, FDA and the health care
community, at a minimum, should focus their review efforts on
critical care/life support biomedical equipment that was determined
to be noncompliant but is now deemed compliant and that for which
there are concerns about the determination of compliance. 

Regarding our recommendation on legislative or regulatory changes
necessary to obtain assurances that manufacturers' biomedical
equipment is compliant, HHS believed that the solutions to the Year
2000 problems can be reached through approaches such as the
clearinghouse.  HHS also clarified FDA's testing of diagnostic X-ray
equipment.  We have revised the report to reflect this. 

Finally, HHS described actions it has taken and planned to implement
our recommendations, and these are reprinted in appendix II.  HHS
also provided a number of technical suggestions to this report, and
these comments have been incorporated into the report as appropriate. 


--------------------------------------------------------- Letter :11.1

As agreed with your office, unless you publicly announce the contents
of this report earlier, we plan no further distribution of it until
30 days from the date of this letter.  We will then send copies to
the Ranking Minority Member of the Subcommittee on Oversight and
Investigations, House Committee on Veterans' Affairs, and the
Chairmen and Ranking Minority Members of the Subcommittee on
Benefits, House Committee on Veterans' Affairs, and the Subcommittee
on Health, House Committee on Veterans' Affairs.  We will also
provide copies to the Chairmen and Ranking Minority Members of the
Senate and House Committees on Veterans' Affairs; the Senate
Committee on Appropriations; the Senate and House Subcommittees on
VA, HUD and Independent Agencies, Senate and House Committees on
Appropriations; the Subcommittee on Labor, Health and Human Services,
Education and Related Agencies, Senate Committee on Appropriations;
the Senate Committee on Labor and Human Services; the Permanent
Subcommittee on Investigations, Senate Committee on Governmental
Affairs; the Subcommittee on Public Health and Safety, Senate
Committee on Labor and Human Resources; House Committee on
Appropriations; the Subcommittee on Labor, Health and Human Services,
and Education, House Committee on Appropriations; the House Committee
on Government Reform and Oversight; the Subcommittee on Human
Resources, House Committee on Government Reform and Oversight; and
the Subcommittee on Oversight and Investigations, House Committee on
Commerce; and the Secretary of Veterans Affairs; the Acting
Commissioner of the Food and Drug Administration; the Director of the
Office of Management and Budget; and the Chair of the President's
Council on Year 2000 Conversion.  Copies will also be made available
to others upon request. 

Please contact me at (202) 512-6253 or by e-mail at
[email protected] if you have any questions concerning this
report.  Major contributors to this report are listed in appendix
III. 

Sincerely yours,

Joel C.  Willemssen
Director, Civil Agencies Information Systems




(See figure in printed edition.)Appendix I
COMMENTS FROM THE DEPARTMENT OF
VETERANS AFFAIRS
============================================================== Letter 

See comment 1. 

See comment 2. 

See comment 1. 



(See figure in printed edition.)

See comment 1. 



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)

See comment 1. 

See comment 3.
Now on pp.  2 and 9. 



(See figure in printed edition.)

Now on pp.  2 and 3.
See comment 3. 

Now on page 3.
See comment 3. 

Now on page 4.
See comment 3. 



(See figure in printed edition.)

Now on pp.  11 and 12.
See comment 3. 

Now on page 14.
See comment 3. 

Now on page 18.
See comment 7. 

Now on page 18.
See comment 3. 


The following are GAO's comments on the Department of Veterans
Affairs' letter dated August 25, 1998. 

GAO COMMENTS

1.  Discussed in "Agency Comments and Our Evaluation" section of
report. 

2.  Report updated to reflect that only 1 of 19 manufacturers remains
unresponsive. 

3.  Report changed to reflect agency comments. 




(See figure in printed edition.)Appendix II
COMMENTS FROM THE DEPARTMENT OF
HEALTH AND HUMAN SERVICES
============================================================== Letter 



(See figure in printed edition.)

See comment 1. 

See comment 2. 



(See figure in printed edition.)

See comment 3. 

See comment 4. 



(See figure in printed edition.)

See comment 2. 

See comment 2. 



(See figure in printed edition.)

See comment 2. 

See comment 2. 



(See figure in printed edition.)

See comment 2. 

See comment 2. 


The following are GAO's comments on the Department of Health and
Human Services' letter dated September 2, 1998. 

GAO COMMENTS

1.  Report modified to include "1,935 manufacturers."

2.  Discussed in "Agency Comments and Our Evaluation" section of
report. 

3.  Report revised to reflect agency comments. 

4.  Report revised to clarify the terms "biomedical equipment" and
"medical devices." The term biomedical equipment includes both
medical devices subject to FDA regulation and scientific and research
instruments which are not subject to FDA regulation. 


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================= Appendix III

ACCOUNTING AND INFORMATION
MANAGEMENT DIVISION, WASHINGTON,
D.C. 

Helen Lew, Assistant Director
Nabajyoti Barkakati, Technical Assistant Director
Tonia L.  Johnson, Senior Information Systems Analyst
J.  Michael Resser, Business Process Analyst-in-Charge

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