Sourcetoday 399 Prosthetics 1

A Supply Chain That Improves Damaged Lives

Aug. 25, 2014
Makers of prosthetics for military applications demand high-quality products and specialized solutions from supplier partners.

Michael Fillauer looks for suppliers that can deliver the quality materials and electronic components his company needs in the small quantities his industry demands. Fillauer is president of Fillauer LLC, a manufacturer of orthotics and prosthetic devices, many of which are designed to help wounded soldiers who have lost limbs in combat. The wars in Iraq and Afghanistan have produced thousands of such injuries; helping those soldiers live more normal lives has become a key mission for companies such as Fillauer LLC and its supply-chain partners. Whether that means supplying the materials and parts that go into the devices, researching and developing the best new products, or bringing those end solutions to customers, the supply line for supporting today’s military is made up of a series of specialized companies.

“Because the prosthetics industry uses smaller quantities than what may be used in the automotive and aerospace industries, it is important that we partner with suppliers that are willing to sell to us in these quantities,” says Michael Fillauer, president of Fillauer LLC, a maker of prosthetics and orthotics.  

According to a recent Associated Press article detailing the high survival rate from battlefield injuries in the U.S. military today, “about 50,000 military personnel have been injured in the conflicts in Iraq and Afghanistan, with 16,000 hurt so severely that they likely would not have survived previous conflicts.” Innovations and advancements in new prosthetic devices are giving those wounded warriors a better chance at a near-normal life than ever before, Fillauer explains, pointing to new materials and advancing technology that are driving the industry forward.

 “We certainly see a lot of demand for the high-activity, carbon-fiber, dynamic-response feet that will allow individuals with amputations to be able to run, to do outdoor activities, to work out,” explains Fillauer, who is a Certified Prosthetist and Orthotist (CPO). “And for some soldiers, even to return to active duty.”

Depending on their age and the extent of their injuries, many returning veterans want to do more than just walk. This increases the demand for the more sophisticated and durable prosthetics Fillauer points to.

“People see these examples of individuals who return to active duty or they return to their sport after amputation,” he says. “So they want that same technology.”

A Collaborative Effort

Developing that technology is a continual and collaborative process, Fillauer adds, pointing to the supply-chain partners Fillauer LLC works with, including distributors of electromechanical and electronic components. He says Fillauer LLC relies on such companies—especially some of its newer suppliers—for component and material recommendations when enhancing or developing new products. This is on top of more routine demands for high-quality products, on-time delivery, and the ability to meet small-quantity needs.

“Because the prosthetics industry uses smaller quantities than what may be used in the automotive and aerospace industries, it is important that we partner with suppliers that are willing to sell to us in these quantities,” Fillauer says.

He adds that improving quality and advancing the devices is the ultimate goal of the partnership.

“The challenge is always the need to make it lighter and smaller,” Fillauer says of prosthetics, emphasizing an industry-wide trend. “For our myoelectric prosthetics [which use the existing muscles in the residual limb to control its functions], the batteries need to last longer and the microprocessor needs to function just like the real hand. Technology has really played a pivotal role in the expectations for prosthetics.”

Fillauer adds that patient testing is a critical part of the development process as well, and that Fillauer partners with practitioners at its own patient care facility and around the world before introducing a product to the market. And then there are the standards that must be met.

“All of our products, outside of tools and equipment, must be FDA approved and CE marked,” he says. “Our equipment must meet UL and EU standards.”

Applying the Technology

Fillauer LLC and its associated companies work directly with patients to deliver cutting-edge solutions. Other companies on the front lines of delivering such solutions include distributors of orthotics and prosthetics that specialize in finding the right solution to a patient’s needs.

“For the active patient, like those returning from military service, we see a high utilization of prosthetic feet with carbon fiber that offer benefits like … vertical shock absorption and torque absorption,” says J. Anna Avakian of distributor SPS, based in Alpharetta, Ga.  

“For the active patient, like those returning from military service, we see a high utilization of prosthetic feet with carbon fiber that offer benefits like … vertical shock absorption and torque absorption,” says J. Anna Avakian, who works in clinical and technical services for orthotics and prosthetics distributor SPS, based in Alpharetta, Ga. “Many patients want to return to activities above and beyond walking … [W]e have technology to allow them to do that, much more than in generations past.”

John Cronin concurs. Cronin is the sales and marketing manager at Cascade-USA, an independent orthotic and prosthetic distributor based in Chico, Calif.

“Carbon fiber has been the material of choice for feet,” Cronin says. “[And] composites are gaining ground also for feet. Titanium is the optimum for its components.”

Once a prosthetic device leaves the factory or warehouse, it is still a long way before that device is successfully implemented.

“As a distributor, we are always working with suppliers to keep costs in check so our customers, the prosthetists who are working with the patients directly, can have quality components at the best possible price,” Avakian adds.

Making sure the prosthesis fits comfortably and that the amputee learns how to walk, and maybe run, all over again is the goal of companies such as Medical Center O&P, located in Silver Spring, Md.

Ian Fothergill is clinical development manager at MCOP, which he describes as “a clinical provider. We work directly with amputees and provide them the care that they require,” he explains. MCOP works with many amputees, including those at the Walter Reed National Military Medical Center in Washington, D.C.

The rehabilitation and prosthetic advances can create a challenge for prosthetists such as Fothergill who may have to temper rehabilitation expectations. While soldiers should set goals, they shouldn’t plan on running marathons or climbing tall mountains in their first year of rehab.

Fothergill explained that the initial target is both more pragmatic and reasonable.

“If they can use the prosthesis for their main mode of mobility during waking hours, that is success in our eyes,” Fothergill says.

The Road to Recovery

The high survival rate of battlefield injuries can also make for a more challenging rehabilitation for both soldiers and the prosthetists that will instruct and supervise the use of the prosthetic devices.

A Step Ahead Prosthetics & Orthotics has locations in Hicksville, N.Y., and Burlington, Mass. Much like MCOP, they work with amputees at all age levels and can also help design the prosthetic limb and related equipment.

“We do see more and more injuries to multiple limbs,” explains Bob Emerson, A Step Ahead’s director. “When you have multiple limb involvement—upper and lower extremities, for instance—it represents a lot of additional challenges … to get them back and fully functional, capable of caring for themselves.”

Emerson can speak firsthand, as he himself is an amputee, having lost his right leg just above the knee in an auto accident when he was nine years old.

Emerson agrees with Fothergill’s definition of success: getting an amputee to the point where they can effectively get around on a daily basis.

“If we can get somebody up and independent and capable of caring for themselves … that is success,” Emerson says. “That is kind of the baseline that we operate by.”

Economic Concerns Escalate

A concern voiced by manufacturers as well as distributors lies in working with insurance providers as to which prosthesis is best for the amputee—and how it will be paid for or funded.

“One of the challenges that the industry has right now is funding, being able to get these items paid for,” Fillauer explains. “Sometimes, not all the time, but sometimes insurance companies are reluctant to pay for a high-end prosthesis.”

Cronin and Avakian agree that these payment challenges have had an effect on their business.

“[Last year] saw some struggles as our industry went through a learning curve in response to increases in RAC [Recovery Audit Program] audits,” Avakian says, referring to the federal government’s Recovery Audit Contractor Program, which aims to identify and correct improper payments through Medicare.

“Medicare changes to reimbursement, increased required documentation for product specification, and RAC audits caused unprecedented pressure on our customers [in 2013],” Cronin explains.

Such issues affect the entire supply chain, especially when it comes to pricing pressures. Makers and distributors of orthotics and prosthetics are already constrained in what they can pay for components and materials by preset reimbursement amounts established by insurers, Fillauer and others explain.

In addition, not every returning soldier will need, or even want, the high-end prosthetic. Settling on which one is best, and agreeing with insurance providers, can occasionally delay things.

“We want to make sure that we’re able to get the kind of prosthesis [that is needed] to the amputee,” Fillauer says. “[There are] four different levels. One being someone who was not really going to walk and they need something to transfer from a wheelchair to a bed [for example]. On up to four, which is for a high-end athlete.”

But Fillauer believes a better arrangement, for all concerned, can be found.

“The question right now, with some of the changes that have been made in the rules, is who gets to make that determination,” he says. “Does the doctor make it [or] does the prosthetist make it? So the big challenge right now is there is not as much clarity as there needs to be. Hopefully that will be resolved in the coming year or so.”

Delivering High-Tech Solutions for Medical Transport Needs

Mike Traylor counts CSafe Global and its AcuTemp product line as one of his most interesting accounts. As a sales representative for electronic components distributor Hughes-Peters based in Dayton, Ohio, Traylor sells interconnect, passive, and electromechanical (IP&E) products to a wide range of industrial customers throughout the Dayton area, but CSafe Global is his only customer that offers a specialty product for use in military medical applications.

CSafe Global makes temperature-controlled storage and transportation products for use in pharmaceutical, biomedical research, and disaster/conflict applications. In short, the company’s products can be used to transport life-saving fluids and materials, protecting them from harsh environments and ensuring that they remain intact.

Traylor started working with CSafe several years ago, when the company introduced its AcuTemp AX56L mobile refrigerator/freezer, a thermal management active shipping device. The product has an ergonomic and rugged hard shell and is used to transport temperature-sensitive, life-saving vaccines and medical supplies to the point of need in any environment. Traylor says Hughes-Peters supported CSafe in its initial job to supply more than 1,000 of the units to U.S. military operations in Afghanistan.

“The unit is really great, because it can run off of AC [power] but can also be powered by battery,” Traylor says. “We sell a couple of larger batteries to keep the unit operable.”

Traylor works with CSafe’s engineers, quality managers, and purchasing staff on a variety of service and support issues, in addition to supplying the batteries to power the units.

“I think what’s significant is that most of the products [CSafe makes] are geared toward life-sustaining types of things,” Traylor explains, adding that the company has humanitarian goals at heart. “It’s a pretty different company—it’s people that care about people.”

Hughes-Peters also supports CSafe’s other products, many of which are larger items used for transporting pharmaceutical and biomedical materials. The distributor supplies CSafe with batteries, cable assemblies, and various other electronic components.

Traylor, again, emphasizes the human aspect of the account: “Their whole philosophy is to improve conditions for extended life.”

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