Stericycle expands reach into strategic growth areas

Going back to the late 1980s and early 1990s, hospitals faced feverish fallout for operating on-site incinerators with neighborhood protests loosely organized under the "Not In My Backyard" or NIMBY banner.

In response, the federal government issued more stringent emissions regulations that forced many hospitals to close their incinerators in favor of alternative treatment and disposal methods and technologies, such as autoclaving, electro-thermal deactivation (ETD) and microwaving. Treated medical waste then could be hauled off-site. Or hospitals simply chose to outsource treatment and disposal to companies offering those services.

Meanwhile, the competitive landscape among treatment and disposal companies navigated through the same consolidation wave as the hospital and healthcare supplier markets in the high-flying, healthcare reform-minded mid-1990s. Chief among the big corporate moves at the time: The fourth-largest solid waste management services company, Allied Waste Industries Inc., agreed to acquire Browning-Ferris Industries Inc., the No. 2 player in the market that also served as the market leader in medical waste treatment and disposal services.

But Allied, which adopted BFI’s more recognizable branding, wanted nothing to do with the healthcare industry.

Enter Stericycle Inc., a growing player in the healthcare market with its ETD technology, that acquired the BFI division and ultimately crowned itself king of medical waste management. It’s a title Stericycle still holds as it continues to acquire other companies, the latest of which is privately held MedServ.

Amid the closing at press time, Healthcare Purchasing News Senior Editor Rick Dana Barlow pitched a series of queries about industry trends to Debra Gillmeister, Stericycle’s director of marketing for large quantity healthcare services. With her clinical background, her experience as a former advisory board member for the American Hospital Association’s American Society for Healthcare Environmental Services and her MBA in finance, Gillmeister fielded the questions with aplomb and authority.

[Environmental Protection Agency] regulations are designed to protect the environment. Ten years ago, according to the EPA, there were 2,400 medical waste incinerators in the U.S. with the goal to reduce this number by 50 percent to 80 percent by 2010. Much progress has been made towards that goal with hundreds of on-site hospital incinerators being shut down. This is because it is more difficult for a hospital to maintain this type of investment and to meet additional regulations. Newly proposed EPA regulations will make it harder to continue operating incinerators. Just this year, we are aware of 11 Midwestern and Northeastern hospital incinerators which have been or are pending shutdown. However, for certain types of waste, incineration at a specialized dedicated facility is required based on the regulations and state requirements.

Competition is ever-present in the business. With over 250 competitors across the country and with the advent of greener offerings, more companies are jumping on the bandwagon. This is why we have expanded our service offerings to include not only our Sharps Management Service but our Pharmaceutical Waste Compliance Service.

Stericycle’s Sharps Management Service using Bio Systems reusable sharps containers was introduced in 1986. By September 2009, more than 70 million disposable containers have been kept out of landfills due to this service. This is equal to more than 6 million gallons of gasoline not being burned since the program started. Stericycle now offers tools like the Carbon Footprint Estimator for hospitals to measure their diminished carbon footprint. This tool is made available to any curious and conscientious hospital that wants to become more aware of their carbon footprint. No password is required for a hospital to use the tool. A Stericycle customer measures their diminished environmental impact based on actual container utilization, while a non-customer would obtain an estimate of what their diminished footprint could be. For example, an average 200-bed acute care hospital will divert more than 13,000 pounds of CO2 or equal to the emission from 679 gallons of gasoline. Again, having green initiatives makes a difference to staff, patients and the community.

(Editor’s Note: To access the Carbon Footprint Estimator, click on http://www.stericycle.com/carbon-footprint-calculator.html.)

We believe that the green movement is growing. From our perspective, by keeping 70 million-plus reusable sharps containers out of landfills, a significant positive impact on the environment has occurred. This is the equivalent to preventing CO2 from going into the atmosphere that would be generated by a 25-mpg car circling the earth 10 times.

We agree it is a complicated issue that has flown under the radar. [The Resource Conservation and Recovery Act] has been around for 30-plus years and was originally targeted to industrial and manufacturing processes. Until pharmaceuticals started being detected in drinking water the issue was not apparent, especially at the hospital level, even though best practices would suggest that appropriate segregation and treatment of pharmaceutical waste is required. Today, Stericycle has a solution for this issue. Our Pharmaceutical Waste Compliance service offers a sustainable solution. Our turn-key service categorizes a hospital formulary, trains staff to properly segregate pharmaceutical waste and then insures that the waste is appropriately transported and treated.

Training is critical and can be very complex. Stericycle’s national team of healthcare compliance specialists train hospital staff over a two-to-three day period. Included in this training is pharmacy, nursing, nurse educators, environmental services, facilities and anyone who handles pharmaceutical waste. Hospitals are slowly becoming aware and changing their clinical practices because of RCRA, programs like Stericycle’s and state legislation. For example, Illinois Gov. Pat Quinn recently signed several key environmental bills including one that dictates that by Jan. 1, 2010, healthcare institutions are prohibited from flushing or dumping unused medications into public wastewater. The practice of disposing of pharmaceuticals down the drain or in the toilet – excluding saline and dextrose – whether hazardous or not, is not a clinical best practice.

Treating hazardous waste is more expensive due to the fact that only a few incinerators across the country can handle this type of waste because of the more stringent emission requirements. Each year more and more regulations, especially at the state level, are being enacted that require appropriate segregation, transportation and treatment of pharmaceutical waste. This makes it more challenging to be compliant with the regulators. However, if pharmaceutical waste is properly segregated only about 10 percent should be classified as hazardous. Proper classification and segregation are two ways costs can be minimized.