White Paper
Cost of Non-Compliance in Sterilisation Equipment Maintenance: Impact on Australian Healthcare
October 2026
Disclaimer
This content is provided for information only. The authors make no representation or warranty regarding the accuracy, completeness or currency of the content. No information in this whitepaper should be construed as medical advice. Readers should seek appropriate professional guidance before acting on any information contained in this document. The authors expressly disclaim all liability for any direct or indirect loss or damage arising from the use of or reliance on this information.
Introduction
This paper sets out a method for costing non-compliance in the maintenance of steam sterilisers and washer-disinfectors in Australian hospitals. It defines the compliance program and its cost, the events that non-compliance makes more frequent, the cost of each event, and the event frequency at which deferring compliance work costs more than it saves. A worked example applies the method to a reprocessing department with two steam sterilisers and two washer-disinfectors.
All values are illustrative, in Australian dollars at 2026 prices, excluding GST, unless a source is stated. Replace them with contract prices, local costing data and the failure records of the facility.
Regulatory Framework
AS 5369:2023: Supersedes AS/NZS 4187:2014 and AS/NZS 4815:2006. It requires validation of every process by IQ, OQ and PQ, requalification at least annually, planned preventive maintenance by a competent person to documented procedures, recalibration at intervals not exceeding 12 months, an annual electrical safety check, routine monitoring, traceability and water quality testing. Washer-disinfectors conform to the applicable parts of ISO 15883, large steam sterilisers to EN 285 and ISO/TS 22421, and small steam sterilisers to EN 13060 and ISO/TS 22421.
Accreditation: All public and private hospitals, day procedure services and most public dental practices are required by health regulators to be accredited to the National Safety and Quality Health Service (NSQHS) Standards. Action 3.17 requires reprocessing consistent with relevant national and international standards, traceability of critical and semi-critical equipment to the patient and procedure, and planning for reprocessing demand. Under the Australian Health Service Safety and Quality Accreditation (AHSSQA) Scheme, an organisation has 60 business days to remediate actions rated not met. If any action remains not met at final assessment, accreditation is withdrawn and the regulator is informed. State and territory regulators determine the action taken where a service does not comply.
Advisory AS24/01: Published by the Australian Commission on Safety and Quality in Health Care in November 2024, it replaces Advisory AS18/07 and its compliance deadlines. It requires a gap analysis against AS 5369:2023, a compliance plan with timeframes, risk assessment and mitigation during implementation including water treatment, and conformity of replacement equipment, including previously used equipment, to the relevant standards. Action 3.17 is rated not met where the gap analysis is incomplete, the plan is not implemented on schedule or required monitoring is absent.
Therapeutic Goods Administration: Reprocessing equipment must be included in the Australian Register of Therapeutic Goods (ARTG). Confirm the ARTG entry before purchase, and confirm that replacement and loan equipment is also included.
Work Health and Safety: Steam sterilisers and steam generators are pressure equipment. Determine the hazard level of each pressure vessel to AS 4343:2014, register items where the Work Health and Safety Regulations require it, operate and maintain pressure equipment to AS 3873:2001 and inspect it in service to AS/NZS 3788:2024. Regulators can issue improvement and prohibition notices. In 2026 to 2027, the maximum penalty for a body corporate across the jurisdictions applying the model Work Health and Safety laws ranges from A$500,000 to A$827,000 for a Category 3 offence and from A$1,500,000 to A$2,470,000 for a Category 2 offence. Victoria applies the Occupational Health and Safety Act 2004 and Occupational Health and Safety Regulations 2017.
Maintenance and Monitoring Requirements
Steam Sterilisers: Run an air removal and steam penetration test each day before the first load in pre-vacuum sterilisers. Record the cycle parameters of every load, use chemical indicators in every pack and use biological indicators at the frequency set by facility policy. Service, calibrate and requalify to the planned maintenance program. Test safety valves and inspect the pressure vessel at the intervals set by AS/NZS 3788:2024.
Washer-Disinfectors: Clean filters and check spray arms daily. Verify the thermal disinfection parameters and chemical dosing, and test cleaning efficacy at the frequency set by the validation. Inspect gaskets and seals at each service and replace them at the interval set by the maintenance program, because degraded elastomers shed particles onto processed instruments.
Requalification After Repair: Requalify after any repair, component replacement or software change that affects the process, before the machine returns to service.
Records: Record every cycle and link each record to its load and, for critical and semi-critical devices, to the patient and procedure. Keep maintenance, calibration, requalification and pressure equipment inspection records for each machine. Missing records are a finding in their own right, because compliance cannot be demonstrated without them.
Cost of Compliance
Cost Basis: Build the annual compliance cost of each machine from labour hours, labour rate and parts. The following illustrative program uses a service technician rate of A$150 per hour and parts and fees of A$100 per inspection visit, A$1,000 per full service, A$100 per pressure equipment inspection, A$50 per backflow device test and A$400 per year in laboratory fees.
| Activity | Steam Steriliser | Washer-Disinfector |
|---|---|---|
| Inspection visit, 2 per year, 3 h each | A$1,100 | A$1,100 |
| Full preventive maintenance service, 8 h | A$2,200 | A$2,200 |
| Requalification and calibration, including dosing calibration and cleaning efficacy testing for washer-disinfectors, 10 h | A$1,500 | A$1,500 |
| Pressure equipment inspection and safety valve test, 2 h | A$400 | Not applicable |
| Testable backflow prevention device test, 1 h | A$200 | A$200 |
| Water quality testing, including steam quality for sterilisers | A$400 | A$400 |
| Total per year | A$5,800 | A$5,400 |
| Labour hours per year | 27 h | 25 h |
Cost per Cycle: At 10 cycles per day on 260 days per year, the steriliser program costs A$2.23 per cycle, or A$0.28 per tray at 8 trays per load.
Other Compliance Costs: Add operator time for daily tests, routine monitoring consumables, training and competency assessment, records administration and pressure equipment registration fees. These costs continue whether or not the maintenance program is deferred, so they do not change the comparison.
Cost of Non-Compliance Events
Non-compliance in maintenance means planned maintenance, requalification, calibration or pressure equipment inspection not completed at the required interval. It produces no cost directly. It raises the frequency of events that do. Cost each event from its components. The following event costs use a service technician rate of A$150 per hour, an after-hours rate of A$225 per hour, a loaded CSSD technician rate of A$60 per hour and a loaded rate of A$100 per hour for clinical, quality and management staff.
Breakdown With Redundancy: A single machine fails and the remaining machines absorb the load with extended hours, overtime and loan instrument sets.
| Component | Cost |
|---|---|
| After-hours call-out and repair, 8 h | A$1,800 |
| Parts, A$2,000, and expedited freight, A$500 | A$2,500 |
| Requalification after repair, 6 h | A$900 |
| Downtime, 4 days at A$1,500 per day | A$6,000 |
| Total | A$11,200 |
Capacity Loss: The department loses reprocessing capacity, e.g. contamination of processed instruments from a degraded washer component, loss of steam or treated water supply, or failure of more than one machine. Common-mode failures defeat redundancy. The following example assumes 40 elective cases per day for 5 operating days, with 25 % of cases transferred to other providers and 75 % deferred. A transferred case is costed at 1 national weighted activity unit (NWAU) at the 2026 to 2027 National Efficient Price of A$7,418. A deferred case is costed at the idle theatre staff cost of 2 h for 6 staff at A$120 per hour, or A$1,440. Withdrawn instrument stock is reprocessed at 0.5 h of CSSD labour plus A$10 of consumables per tray, or A$40 per tray. Urgent cases are supported by outsourced reprocessing of 20 trays per day at A$80 per tray plus A$400 per day in transport.
| Component | Cost |
|---|---|
| Transferred cases, 50 at 1 NWAU | A$370,900 |
| Deferred cases, 150 at A$1,440 | A$216,000 |
| Reprocessing of withdrawn instrument stock, 300 trays | A$12,000 |
| Outsourced reprocessing and transport, 5 days | A$10,000 |
| Investigation, review and reporting, 200 h | A$20,000 |
| Total | A$628,900 |
This is about A$125,800 per operating day. Use the NWAU of the affected procedures and the transfer arrangements of the health service.
Process Failure With Look-Back: A failed biological indicator, failed air removal test or out-of-limit cycle record is found after loads have been released. Loads are recalled and the patients on whom the devices were used are notified, reviewed and tested.
| Component | Cost |
|---|---|
| Patient notification and clinical review, 60 patients at 1.5 h | A$9,000 |
| Testing and follow-up, 60 patients at A$200 | A$12,000 |
| Recall and reprocessing, 60 trays at A$40 | A$2,400 |
| Investigation and reporting, 100 h | A$10,000 |
| Total | A$33,400 |
Each surgical site infection attributed to the failure adds A$18,814, the cost per case estimated for Australia by Royle et al. (2023).
Accreditation Action Not Met: Action 3.17 is rated not met and must be remediated within 60 business days. A remediation project of 0.5 FTE for 12 weeks at 38 h per week costs A$22,800, and assessment of the not met actions over 2 assessor days at A$2,500 per day costs A$5,000, a total of A$27,800. The omitted maintenance and requalification must also be completed before the action is rated met, so deferral saves nothing on the program itself.
Pressure Equipment: A lapsed in-service inspection or registration can result in a prohibition notice that holds the machine out of service until it is inspected. Cost the outage as a breakdown. Statutory maximum penalties are exposure limits, not expected costs, and are excluded from the model.
Cost Model
Expected Annual Cost: For each event, multiply the increase in annual event frequency caused by non-compliance by the event cost. Sum over all events to obtain the expected annual cost of non-compliance. Deferral reduces cost only where this sum is less than the annual saving from omitting the compliance work.
Break-Even Frequency: Event frequencies under non-compliance are rarely known in advance. Calculate the break-even frequency of each event as the annual saving divided by the event cost. Deferral increases cost if it raises the frequency of any single event above its break-even value. Express the break-even frequency as a return period, which is 1 divided by the frequency, and compare it with the failure history of the facility.
Saving: Count as saving only the compliance work actually omitted. Exclude work that must be completed later, such as requalification required to close an accreditation finding.
Worked Example
A department with two steam sterilisers and two washer-disinfectors omits its planned maintenance and requalification program. The saving is 2 times A$5,800 plus 2 times A$5,400, or A$22,400 per year. This is the upper bound of the saving. The increases in annual event frequency are illustrative assumptions. Expected annual cost is the frequency increase multiplied by the event cost.
| Event | Increase | Event Cost | Expected |
|---|---|---|---|
| Breakdown, 0.5 per machine | 2.0 | A$11,200 | A$22,400 |
| Capacity loss | 0.02 | A$628,900 | A$12,578 |
| Process failure with look-back | 0.05 | A$33,400 | A$1,670 |
| Action 3.17 not met, once per 4 years | 0.25 | A$27,800 | A$6,950 |
| Total expected annual cost | A$43,598 | ||
| Annual saving | A$22,400 | ||
| Net annual cost of omission | A$21,198 |
Result: At these assumptions, omitting the program costs A$21,198 per year more than it saves, an expected cost of 1.9 times the saving. Breakdowns alone offset the saving at 0.5 additional breakdowns per machine per year.
Break-Even Frequencies: The following frequencies are independent of the assumed event frequencies.
| Event | Break-Even Frequency | Return Period |
|---|---|---|
| Breakdown with redundancy | 0.5 per machine per year | 2 years per machine |
| Capacity loss | 3.6 % per year | 28 years |
| Process failure with look-back | 67 % per year | 1.5 years |
| Accreditation action not met | 81 % per year | 1.2 years |
Capacity loss sets the threshold. Omission by the department increases cost if it raises the frequency of a capacity loss event by more than 1 event in 28 years. For a single steam steriliser with a saving of A$5,800 per year, the threshold is 1 event in 108 years.
Sensitivity
Capacity Loss Cost: The break-even frequency of a capacity loss event falls as its cost rises. The following table gives break-even frequency and return period for a single steam steriliser with a saving of A$5,800 per year and for the four-machine department with a saving of A$22,400 per year.
| Event Cost | One Steriliser | Department |
|---|---|---|
| A$100,000 | 5.8 %, 17 years | 22.4 %, 4.5 years |
| A$250,000 | 2.3 %, 43 years | 9.0 %, 11 years |
| A$628,900 | 0.92 %, 108 years | 3.6 %, 28 years |
| A$1,000,000 | 0.58 %, 172 years | 2.2 %, 45 years |
Activity and Transfers: The cost of a 5-day capacity loss event scales with elective activity and the share of cases transferred to other providers. Columns give the share of cases transferred. Values are event cost in thousands of Australian dollars. All other assumptions are unchanged.
| Cases per Day | 0 % | 25 % | 50 % |
|---|---|---|---|
| 20 | 186.0 | 335.5 | 484.9 |
| 40 | 330.0 | 628.9 | 927.8 |
| 80 | 618.0 | 1,215.8 | 1,813.6 |
Event Frequencies: The following table gives the net annual result of omission for the department as additional breakdowns and capacity loss frequency vary. Rows give additional breakdowns per machine per year and columns give the increase in capacity loss frequency. The process failure and accreditation frequencies are held at 0.05 and 0.25 per year. Values are net annual cost in thousands of Australian dollars, and values in parentheses are net savings.
| Breakdowns | 0 % | 1 % | 2 % | 5 % |
|---|---|---|---|---|
| 0 | (13.8) | (7.5) | (1.2) | 17.7 |
| 0.25 | (2.6) | 3.7 | 10.0 | 28.9 |
| 0.5 | 8.6 | 14.9 | 21.2 | 40.1 |
| 1.0 | 31.0 | 37.3 | 43.6 | 62.5 |
Omission produces a net saving only where it adds fewer than 0.31 breakdowns per machine per year with no change in capacity loss frequency, or adds no breakdowns and raises the capacity loss frequency by less than 2.2 % per year. Test both values against the failure history of the facility before deferring any compliance work.
Unquantified Costs
The model excludes costs that cannot be estimated reliably in advance: litigation and compensation, work health and safety prosecution, loss of private referrals, staff turnover, loss of surgical training activity and reputational effects. These costs add to the expected cost of non-compliance and do not reduce it.
An economic analysis of a sterile processing closure in the United States found the duration of closure to be the major driver of cost, and identified reputational injury, staff loss, lost reimbursement and harm to residency programs as further consequences (Mittenzwei et al., 2017). Restore capacity quickly: keep outsourced reprocessing and loan equipment arrangements in place before they are needed.
Emergency replacement brings capital expenditure forward and removes competitive tendering, lifecycle cost evaluation and a planned changeover. Plan replacement from condition, repair and downtime records.
Case Studies
Fiona Stanley Hospital, Perth, 2015: Sterilisation services were provided under the facilities management contract of the hospital. Blood and tissue were found on sterilised equipment, and two breach notices were issued. In April 2015, the Western Australian Health Minister removed sterilisation services from the contractor, the service was taken in-house and a review of clinical services at the hospital was announced. For contracted reprocessing, specify measurable performance requirements, audit rights and step-in provisions, and monitor them from the start of the contract.
Austin Hospital, Melbourne, 2019: A malfunction of the surgical washers left small specks of black rubber on washed surgical instruments. Media reports at the time attributed the debris to a disintegrated rubber gasket and reported the washers as 8 to 12 years old. More than 500 elective surgeries were cancelled or postponed, and the Victorian Government directed that the highest priority patients be moved to the private system at government cost. A Safer Care Victoria review found the rubber very unlikely to cause harm to patients and made 20 recommendations. The faulty washers were replaced and the hospital committed to replacing all of its surgical washers. A single elastomer component produced a capacity loss event across the department. Inspect and replace gaskets and seals at the intervals set by the maintenance program, inspect processed instruments for particulate, and replace ageing machines before their condition produces an event.
Recommendations
- Baseline: Record for each machine the dates of maintenance, calibration, requalification and pressure equipment inspection against the required intervals, together with its repair and downtime history.
- Compliance Cost: Build the annual compliance cost of each machine from labour hours, labour rates and parts.
- Event Costs: Cost breakdown, capacity loss, process failure with look-back and accreditation findings from local costing data, NWAU data and contract prices.
- Deferral Test: Calculate break-even event frequencies before deferring any compliance work, and compare them with the failure history of the facility.
- Capacity Loss: Identify common-mode failures such as shared water treatment, steam supply, and washers of one type and age. Keep contingency arrangements for outsourced reprocessing and loan equipment in place.
- Contracted Services: Specify performance requirements, audit rights and step-in provisions.
- Accreditation: Maintain the AS24/01 gap analysis, compliance plan, risk assessment and monitoring records.
At the illustrative values in this paper, omitting the maintenance and requalification program of a four-machine department has an expected cost of 1.9 times the saving, before litigation, penalties and reputational costs. The result depends on event frequencies. Use the break-even frequencies to test any proposal to defer compliance work.
References
- Standards Australia. AS 5369:2023 Reprocessing of reusable medical devices and other devices in health and non-health related facilities.
- Australian Commission on Safety and Quality in Health Care. Advisory AS24/01 National Safety and Quality Health Service Standards requirements for reprocessing of reusable medical devices in health service organisations. November 2024.
- Australian Commission on Safety and Quality in Health Care. National Safety and Quality Health Service Standards, second edition, Action 3.17.
- Australian Commission on Safety and Quality in Health Care. Accreditation to national safety and quality standards.
- Australian Commission on Safety and Quality in Health Care. AHSSQA Scheme Fact Sheet 4, Rating scale for assessment.
- Independent Health and Aged Care Pricing Authority. National Efficient Price Determination 2026 to 2027.
- Royle R, Gillespie BM, Chaboyer W, Byrnes J, Nghiem S. The burden of surgical site infections in Australia: a cost-of-illness study. Journal of Infection and Public Health, 2023, 16(5), 792 to 798.
- Mittenzwei SE, Topkoff JL, Bessesen MT, Porter CA, Rai GS, Branch-Elliman W. When sterile processing goes down: an economic analysis of alternative strategies for supporting the service. Infection Control and Hospital Epidemiology, 2017, 38(8), 1002 to 1004.
- Safe Work Australia. Jurisdictional comparison table, maximum monetary penalties, 2026 to 2027.
- AS 4343:2014 Pressure equipment, Hazard levels.
- AS 3873:2001 Pressure equipment, Operation and maintenance.
- AS/NZS 3788:2024 Pressure equipment, In-service inspection.
- Austin Health. Austin Health welcomes Safer Care Victoria review findings.
- Premier of Victoria. Statement on Austin Health surgery. 12 September 2019.
- 3AW. Austin Hospital: 76-year-old's life-saving surgery among hundreds of surgeries cancelled due to equipment failure. 11 September 2019.
- Financial Times. Serco stripped of sterilising contract at Australian hospital. 20 April 2015.