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Study finds managerial discretion drives voluntary medical device recalls

por John W. Mitchell, Senior Correspondent | August 23, 2018
Business Affairs Risk Management
In a complicated behavioral dance of costs, physician feedback and managerial self-reflection, a recently published study found that voluntary medical device recall parameters appear to be driven mostly by individual judgment.

The authors linked these findings to the observation that the FDA does not explicitly specify how medical device companies should sort out such decisions. Also, the study found that physician action figures prominently into the medical device recall process.

“Medical device industry managers are less likely to recall a defective device when the defect is detectable to physician customers before product use," said George Ball, Ph.D., assistant professor, Operations and Decision Technologies Department, Kelley School of Business, Indiana University (IU) told HCB News. “In other words, managers appear to trust the physician to screen out defective products, and not use them on patients, instead of the firm choosing to recall the products.”

Ball's interest is in the human behavior aspects of business, primarily related to his areas of expertise in product recall, lean manufacturing, and quality management. He said that because the issue of behavioral factors related to voluntary product recalls is "under-studied," the medical device sector was attractive for study. Medical device recalls can have a significant impact on a company’s finances, as well a manager’s career.

The study found that medical device managers who were “more reflective” and wanted to understand the root cause of factors suggesting a recall, tended to issue fewer recalls.

“We attribute this to the fact that highly reflective individuals tend to seek out more information before making decisions,” said Ball. “This tendency to seek out more information before recalling translates into a lower overall likelihood to recall.”

He added that it is important for managers in any industry to be cognizant of potential biases or factors that influence a product recall decision. But Ball stressed that perceived recall costs, perceived customer harm, and individual cognitive dispositions are factors that affect such decisions. According to a statement from IU, the FDA has expressed interest in applying the study findings to how the agency oversees medical device recalls.

“The more a firm can be made aware of these relationships, the better recall decisions they will hopefully make,” said Ball.

The study utilized interviews with 167 managers from a Fortune 500 medical device firm and a replication study with Amazon Mechanical Turk, an internet outsourcing market platform. The study was conducted in conjunctions with researchers at the University of Minnesota’s Carlson School of Management, and published in the recent issue of the Journal of Operations Management.

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