The Way Forward for Sustainability in Healthcare

Healthcare Purchasing News was able to speak with Amy Piser, lead clinical educator at Daniels Health, in order to gain some insight into how to best implement sustainability measures in hospitals to maximize success and efficiency.

What are the biggest challenges hospitals tend to face in adopting sustainability measures?

In my experience, the biggest challenge that hospitals face in adopting sustainability measures is a lack of data to back and confirm their efforts. It’s one thing to make pledges or commitments around sustainability, but tracking and reporting on specific Key Performance Indicators (KPIs) such as waste per adjusted patient days is significantly more difficult. I always tell people “what you can measure, you can manage,” and the number one question we’ve been getting recently is around how we can track initiatives around waste reduction, CO2 offsets, and other measurable outcomes, which is a great first step.

Although organizations like Practice Greenhealth exist to provide reporting tools and best practices, the hospitals themselves still have to build and report on their own sustainability data in partnership with their vendors. This lack of data visibility from vendors and partners is still a significant challenge for many hospitals.

What are some measures hospitals have taken that have been particularly successful?

More than anything, hospitals that take a proactive approach to supply chain management tend to have the most success driving sustainable outcomes. Likeminded vendors are typically more than happy to partner on sustainability initiatives, but it’s critical for hospitals to start with building achievable and repeatable KPIs into the brief. From there, vendors can ensure they are tracking the appropriate data points, supporting with business reviews on a regular basis to track outcomes.

There are many other successful strategies we often see specifically within the hospital waste management space. For example, optimizing waste streams typically leads to a reduction in excess regulated medical waste, which is more energy intensive to dispose of. Similarly, developing a stringent pharmaceutical waste program keeps medications out of wastewater and trash.

Additionally, adopting reusable products where possible, such as waste containers, is increasingly successful for many hospitals. While this is sometimes a point of conflict with infection prevention and risk, there is rarely any infection risk associated with certain reusables. Hospitals are increasingly focusing on identifying those products that have a more sustainable lifecycle without threatening patient or staff safety.

How can hospitals educate their workers on acting and working more sustainably?

A successful educational program starts with a strong work plan backed by specific goals and vision. This sets clear top-down expectations and enables key stakeholders to regularly engage clinical and educational teams with consistent learning messages. Consistent and continual education is increasingly important, especially as many hospitals see a rise in employee turnover, traveling support, and contractor support. Focusing on sustainability in the onboarding process is also critical.

Lastly, auditing current programs and metrics to determine success, and then adapting education based on findings, ensures that efforts are continuously focused on driving results and updated to meet the needs of the sustainability program.

What do you anticipate for the future in this space?

Whether through voluntary commitments like the Department of Health and Human Services Healthcare Resilience Pledge (to which Daniels Health is a signatory) or regulatory requirements like the new Securities and Exchange Commission ruling for public companies to disclose climate-related information, there is a growing trend toward data-based carbon emissions reporting.

While this hasn’t happened yet, it is not hard to imagine a world where Medicare and Medicaid reimbursements are impacted by sustainability measurements, similar to HAI [healthcare-associated infections] reporting. Additionally, many accreditation organizations like the Joint Commission are adding focus to sustainable outcomes.

The bottom line is that this trend is not going anywhere, and with public perception at an all-time high, hospitals have nothing to lose by starting to plan now.

Are there any developments you're tracking that seem particularly promising?

I am very excited by technology advances allowing us to develop better solutions for sustainable waste management. Hazardous and regulated medical waste require intensive disposal treatments that are not necessarily environmentally friendly, so developments in alternative treatment options like hydrogen destruction and waste to energy are very promising. While the technology is not yet universal, it is promising to see a roadmap for a world where medical waste management has a more positive impact on the environment.

Additionally, within the space of waste management, we are seeing an ongoing shift away from paper to digital when it comes to manifesting, which is another step in the right direction. Combined with the adoption of optimization software, this digital first approach not only reduces paper waste, but enables tracking and reporting capabilities that support a deeper environmental impact.

Healthcare Purchasing Isn’t Going as Green as You Think

By Lars Thording, VP of Marketing & Public Affairs at Innovative Health LLC

Is healthcare purchasing going green? The industry headlines might suggest so. But the reality witnessed by boots-on-the-ground healthcare professionals suggests otherwise.

According to the Commonwealth Fund, in the United States, the healthcare sector is responsible for 8.5% of total greenhouse gas emissions, and emissions increased 6% from 2010 to 2018. Today, U.S. hospitals generate more than 4.7 million pounds of waste annually (which equates to roughly 27 pounds of waste per staffed hospital bed in America per day), and they dispose of 2 million pounds of unused supplies each year, at a cost of $15 million annually. Further, according to a Modern Healthcare report, more than 70% of a health system’s greenhouse gas emissions are embedded in the products and services they buy (i.e., scope 3 emissions).

With this background, one would think that healthcare purchasing would be adopting rules for preferring environmentally friendly products, given the level of attention being paid to battling climate change across industries. However, when looking closer, it seems that the healthcare supply chain has succeeded in insulating itself from any such considerations.

Supply chain professionals in healthcare today will tell you that even though hospital leadership is pushing for greater environmental sustainability, they will default to an uncompromised focus on cost when push comes to shove. The cheapest product wins, whether it is green or not. In fact, multiple supply chain professionals directly spoke to this conundrum at a recent roundtable in Scottsdale: While climate impact is top of mind in the industry, only green initiatives that are cost neutral or reduce costs are actually being considered.

Cost above all other considerations

For decades, the healthcare supply chain has been focused solely on one thing: driving down costs. This came with efforts to negotiate single-source contracts and pushing for just-in-time inventory policies. With this sole task in mind, healthcare purchasing has played a less-than-glorious role in the hospital, which has increasingly struggled with severely strained bottom lines.

The pandemic changed that – for a minute. Supply chain shortages in vital product categories like gloves and face masks shone a light on the healthcare supply chain and suddenly made the purchasing and inventory function of the hospital arguably the most important function in healthcare. Healthcare purchasing, having lived a life out of the limelight, became critical in the acquisition and availability of products.

In this way, the pendulum shifted from just-in-time inventories to just-in-case inventories, and the cost focus shifted to a focus on resource availability. Sole-source contracting (in some cases) was abandoned and changed to dual-source arrangements to enhance the resilience of the supply chain. During the pandemic, in other words, the sole focus on price faded. Other procurement criteria, such as environmental considerations, were invited to play a role.

However, since the pandemic, the pendulum has swung right back to where it started, with the healthcare supply chain solely focused on cost savings. We are back to single-source contracting and procurement decisions made to reduce costs.

Why green decision-making has stalled

Of course, the environmental and resilience discussion has not completely disappeared, and hospital leaders are eager to demonstrate that their hospitals are making an effort to combat climate change. After all, doing so helps to comply with political signals, build the hospital’s “brand,” and strengthen their hiring and retention efforts. To this end, most hospitals have hired sustainability directors.

Given the pervasiveness of this theme and the focus of hospital leadership, why is the healthcare supply chain still struggling with notions such as environmentally preferred purchasing? There are two main reasons why:

Supply chain executives do not drive all procurement decisions. Specifically, physicians and nurses often have the clout to insist on buying new or preferred technologies, for clinical reasons or otherwise. Some have suggested that physicians’ incomes and the fact that physicians direct most healthcare spending (80% is a frequently used number) are the real culprits in rising health care costs. We call this "physician-induced demand, a documented phenomenon that results in overtreatment and contributes to high health care costs.” So, for some of the most expensive products, supply chain staff is left to simply execute – not question.
When supply chain staff does drive procurement decisions, they are focused on their main task: to drive down costs. In the minds of supply chain decision-makers, the environment is considered when the environmentally friendly alternative is cost neutral or reduces costs, but otherwise not. In many cases, the environmentally preferable product is also the more expensive one. (A noteworthy exception is single-use device reprocessing, which reduces the carbon emissions footprint by up to 50% and reduces costs by at least 40%.) When hospital leaders ask the supply chain to demonstrate effort to combat climate change, they are essentially giving hospital supply chain executives conflicting instructions, since environmentally preferable purchasing often runs counter to the standing instruction to reduce costs. As a consequence, supply chain executives will ignore hospital leadership’s calls for greening the hospital.

The path to balancing costs with environmental sustainability

Given the importance of costs, what can supply chain executives in U.S. hospitals do to reduce their hospital’s environmental footprint? It must be recognized that they have to apply a common-sense approach; costs cannot be ignored. However, some basic initiatives would help:

Vendors typically don’t provide information about the environmental impact of their products. Why? Because the hospital does not ask. Simply asking for sustainability performance metrics for every supplier, contract, and product to appear alongside price would go a long way toward creating the conditions for balanced or “common sense” decision-making. Ideally, sustainability metrics would be based on life-cycle analyses (LCAs).

More fundamentally, while most hospitals have value analysis committees designed to balance clinical, operational, and financial considerations in contracting, they do not play the role they should in showing environmental stewardship. Simply bringing together the right people and providing sustainability metrics is well within the power of the supply chain professional. As usual, knowing the facts helps.

A joint platform for decision-making that considers – among other things – climate impact can be the foundation for supply chain leaders to “democratize” the procurement decision and create shared responsibility and accountability among different hospital functions. It may be time to re-write the charter of the value analysis committee.