In the News: Healthcare Purchasing News – Making haste with controlling waste

November 20, 2017

Consumption, processes contribute to red, blue and black bags, sharps containers, red ink

Effectively managing a healthcare organization’s waste stream doesn’t always and totally involve used products.

Sure, used products may comprise a significant portion of a facility’s waste stream, but a considerable part also includes new and unused products removed from packaged protection and sterility that are discarded as waste.

Some might classify that as more wasteful than actual waste even though it ends up in the same place.

While it’s certainly admirable to concentrate waste management efforts on treatment and disposal options and contract pricing for service as well as environmentally safe alternative products and processes, those efforts don’t complete the picture and may not be enough to make a meaningful and noteworthy difference. Still, healthcare organizations could improve how they treat and dispose of their medical and non-medical waste as well as how they approach and implement sharps safety measures.

If anything, perhaps waste management can be more accurately and acutely characterized as effective and efficient product selection, delivery frequency and usage, including choosing the right products in the right quantities at the right time — from simple disposables to kit and tray components to sharps. Implementing just-in-time or stockless inventory programs for low-unit-of-measure distribution enables end users to access products only when needed for selected cases, patients and procedures.

And the way to improve product selection, usage, reprocessing and eventual disposal can involve information technology systems, supply data standards for track-and-trace intelligence and value management processes, including data analytics.

Data, value analysis matters

“Reporting systems can provide access to valuable information concerning waste generation, disposal and the associated costs,” said Carl Solomon Sr., FAHE, CHESP, Director, Environmental Services & Linen Services, UC San Diego Health. “Also, information systems can be used to monitor waste processing equipment to ensure equipment is functioning correctly, as well as to indicate when service is required. Information available on the web is invaluable in researching waste treatment and disposal companies, available technologies and regulatory requirements applicable to any state.”

Enrico Vona, Vice President of Integrated Waste Operations and Compliance Training, Stericycle, indicated that his company’s geolocation technology has proven to be effective in streamlining the pickup and transportation of waste from the healthcare facility. “Using these tools to monitor our trucks and fleet not only allow us to track truck idle times and distance, and re-route based on traffic, but also helps us communicate more effectively with our clients and share real-time updates with them,” Vona told Healthcare Purchasing News. “For instance, if a truck is delayed and a facility is expecting a pickup. We can also respond to an immediate request from a client who requires an unscheduled pickup, and re-route a truck to make a stop at that facility. This method is also beneficial from an environmental perspective. By using advanced routing technology and more efficient transportation logistics, we are also reducing the number of miles driven, improving fuel economy and ultimately reducing total energy consumption and greenhouse gas emissions.”

Using IT in waste management definitely can help “optimize the process,” according to Arthur McCoy, Senior Vice President, San-I-Pak Inc.

“Generally, the waste pick-up process is very inefficient,” McCoy noted. “There are several drivers for this inefficiency. The most significant is that most compactor systems are ‘dumb.’ They do not have the ability to provide information to the facility staff about how full or empty they are. This manifests itself in scheduled pick-ups that will haul a compactor with 2 tons of waste, but has the capacity for 8 tons. Waste generation is a direct consequence of patient census, and most hospitals set up their waste services on a scheduled basis even though census fluctuates from day to day. We provide a solution with our systems that can communicate directly with the waste hauler when the compactor is near full, which will dramatically lower solid waste disposal costs.”

IT can be used to understand consumption patterns, according to Stephen Kovach, Director of Education, Healthmark Industries. Kovach cites a surgical procedure as an example. “With almost every item used in surgery right now having a bar code, this information could be used to track trends in supplies,” he said. “Items that are used and not used — even returned.”

Lisa Zierten, Director of Marketing for Hospital Services at Cardinal Health, agreed that “An automated system makes it easier to proactively remove expired, recalled or obsolete products — and in result, reduces waste.

“An inventory management solution with analytics as its foundation enables informed decision making around purchasing and inventory control by providing complete visibility into product utilization,” Zierten noted. “Without the ability to track and forecast, providers tend to base future purchasing decisions on their previous buying habits without knowing if everything they bought was actually used.”

Information also can be gathered to examine how much and what kinds of waste are being generated in a facility, Kovach noted. He cites wrapped trays in sterile processing as an example.

“How many were opened in a case, and the waste generated by the wrap and its impact on the weight of the trash to be disposed of?” he said. “It could be compared to the waste generated by a sterilization container and then be part of a process comparing the two methods and what they generate in waste and that cost to the facility. This information could be used in deciding, do we move more toward containers or stay with wrapping tray?”

IT helps

IT also plays a key role in the logistics for treatment of medical waste, McCoy said. “The days of a paper chart for monitoring temperatures during the cycle are long gone,” he insisted. “Our system integrates a touch-screen user interface for operations, troubleshooting and regulatory support. The information available at the machine can also be accessed remotely.”

IT provides visibility into its entire supply chain to manage it effectively, including waste, according to LeeAnn McWhorter, Strategic Alliances Director, FDB Prizm, First Databank Inc. “Health IT solutions don’t always integrate with one another, and the resulting lack of coordination creates challenges in tracking product costs, performance and consumption,” she said. “Healthcare organizations who fail to build a supply chain that can meet these needs will struggle, but the application of the right technology can significantly improve the performance of an organization, not only in its financial operations but in clinical capability.”

McWhorter acknowledged that supply data standards can make a difference, too. “Standards promote visibility that reinforces patient safety, and missing data or poorly defined product attributes adversely affect the supply chain as well,” she said. “Whether in tracking medical devices to the patient level or choosing the billing codes necessary to file claims, having proper data throughout the supply chain reduces wasteful spending and prevents miscommunication. Every organization today must work to repair the data roadblocks to optimize financial performance and improve patient care.

“A healthcare organization needs high quality data and good technology to make intelligent purchasing decisions and clearly demonstrate clinical outcomes. Good technology and reporting tools ultimately produce actionable knowledge,” McWhorter added.

“Embracing data standards and leveraging emerging technologies can do for healthcare what the bar code has done for retail,” Zierten said. “It’s important to have a complete understanding of how products move along the value chain, from point-of-use all the way back to point-of-manufacture. This ensures products are delivered in the most efficient manner, damage-free and with sufficient product dating.

Value analysis remains a critical component, too, according to San-I-Pak’s McCoy.

“Far too often there is a disconnect between understanding the value of a project versus the price of a project,” he said. “On-site management of infectious waste is the only healthcare initiative that aggressively lowers operational costs, reduces CO2 footprint, fortifies operational sustainability, lowers legal liability, and improves community/public safety. Often the non-financial metrics are not applied to projects simply because the project manager may not have a clear understanding of the value of the overall project.”

Stericycle’s Vona reinforces the need for waste management to be funneled through a value analysis process.

“By engaging multiple stakeholders in a comprehensive value analysis process, healthcare organizations can be assured of selecting the best possible vendor partners in terms of regulatory compliance, operational efficiency, staff safety, infection prevention, environmental sustainability and financial impact,” he said. “For example, with our Sharps Management Service, having our service technicians manage the proactive exchange of our reusable sharps containers impacts infection prevention and safety through reduced needle stick injuries; environmental services and nursing by removing their operational burden to exchange containers; supply chain by removing sharps container purchasing and logistics responsibilities, all while reducing waste volumes through the benefit of reusable containers.”

Cardinal Health’s Zierten calls value analysis a “core component of performance improvement” in hospitals, impacting clinical, financial and operational perspectives when making product decisions. The three perspectives are interrelated and play a key role in combatting the constant challenge to reduce waste, she added.

“While it is essential to understand the clinical benefits of various products and services, Supply Chain professionals must go even further by examining the financial and operational impacts,” she said. “For instance, are there tradeoffs of quality for cost? Products and services that come at a lower price may fall short when it comes to quality, resulting in overutilization or other forms of waste. Or perhaps outdated clinical practices are driving unnecessary product usage and waste. Regardless, Supply Chain professionals can use value analysis as a platform to conduct a broader financial assessment of these items. For other items, such as equipment, they must consider the true cost of ownership, which can include extra equipment or supporting products or services in addition to the original purchase. Value analysis can also be instrumental in understanding the impact that these products can have on reimbursement.

“Another key consideration for value analysis is the impact of products on operations, especially to clinician experience and day-to-day workflow in the hospital,” Zierten continued. “Will a product or solution result in less work for clinicians? Are there other unforeseen effects that would disrupt workflow and care? Standardization can be an effective way to consolidate volume and reduce cost and complexity on the supply chain side, but only if you have good visibility into utilization data to make your case, and a clear understanding of operational impacts on clinicians.

All told, value analysis in waste management makes too much economic sense, according to UC San Diego’s Solomon. “[It] allows a medical facility to determine the cost/benefit of various waste disposal and treatment options, including whether to treat waste on site using available technologies, or whether to contract out waste treatment and disposal to an outside company,” he noted.

Error apparent

Any distracted or overstressed clinician mistakenly can throw out the wrong product or put waste in the wrong color bag. Even Supply Chain can make mistakes when it comes to contracting decisions, product availability and product selection involving waste and sharps management.

McCoy blames it on blinders.

“In our experience, supply chain is often focused on the wrong aspects of waste management,” he said. “They look at convenience, service consolidation and billing efficiency. When there is a plan to put out an RFP, they only want to look at similar versions of what they currently have and do not challenge themselves to identify a superior alternative.”

Solomon advises Supply Chain professionals to review periodically the value of their waste management contracts, and always take advantage of the competitive bidding process. He also recommends conducting a cost-benefit analysis of on-site treatment of certain waste streams, working with their current vendor to look at ways to reduce landfill waste and biohazardous waste, while increasing recycling. “Value adds, such as a dedicated representative, on-site training, and periodic waste assessments should be required of your vendor,” he asserted. Yet challenges remain with having current knowledge of the various waste streams, and the regulations impacting these waste streams, he added.

Zierten looks to Surgical Services and also trepidation about investing in automation.

“Waste management can be such a difficult operation to master because Supply Chain professionals don’t always have visibility into the operating room,” she indicated. “It’s important to understand the clinical culture and collaborate with clinicians.

“In addition, not all medical supplies are created equal, yet, often inventory management solutions fail because hospitals may think that automating their supply chain is too expensive and not worth the long-term [return-on-investment],” she said. “For example, tongue depressors and cotton swabs don’t require real-time inventory visibility, but it’s a worthwhile investment to track a $10,000 pacemaker in real-time through the supply chain.”

Zierten encourages the adoption and implementation of an “end-to-end networked supply chain” that she defines as “an environment in which all stakeholders — producers, purchasers and distributors — swim in the same pool of information,” which can support patient safety, reductions in waste, proactive supply management, enhanced charge capturing and clinical satisfaction, she added.

“Supply Chain professionals have many challenges with technology, data standards and insufficient visibility into their spend that inhibits their ability to make informed decisions,” McWhorter said. “I once had a customer tell me, ‘we could house a museum with the failed technologies we have invested in over the years.’ That thought stayed with me throughout my career because that pain is real. Most Supply Chain professionals can tell you exactly where the gaps are within their supply chain. Finding the right resources and necessary funds to repair those break points is another matter.”

Vona urges Supply Chain pros to eliminate their misconceptions about the hierarchy of waste disposal.

“Many believe hospitals should incinerate everything, and while this is the most effective way to completely destroy all waste, it’s also the most costly and least environmentally friendly option,” he said. “And the fact is, not all waste needs to be incinerated in order to be completely destroyed. Proper waste management goals should be to reduce incineration from an emission perspective, especially when it’s more sustainable to dispose of waste with reusable waste containers and autoclave whenever possible.”

Segregating waste is a more useful strategy, Vona continued. Waste that should be incinerated includes pharmaceutical, chemotherapeutic and pathological waste.

Regulated medical waste occupies the next rung on the waste hierarchy, he said. This waste can be transported to available “Waste-to-Energy” facilities where it can produce electricity and/or heat directly through combustion, or produces a combustible fuel commodity, such as methane, methanol, ethanol or synthetic fuels.

“Autoclaving and land filling is the next best option,” he noted. “Autoclaving is an industry best practice for disinfecting medical waste as it is the most sustainable and cost-effective solution for regulated medical waste disposal. Finally, sharps waste is disinfected using validated equipment, sent to a third party for removal of glass and metal and then shredded. The shredded plastic is then extruded or formed into small plastic pellets that may be used in plastic molding processes to make paint cans and trays, shelving and flower pots.”

Vona acknowledges that waste management can be complicated because “it is a highly regulated industry with many differences between federal and state regulations. Some agencies, such as U.S. DOT, EPA and DEA may not match up, and it’s difficult to manage the waste stream and maintain regulatory compliance when that occurs.”

Getting it right

Still, when it comes to effective and efficient waste management, Supply Chain approaches some of the right strategies and tactics for the right reasons.

“We’re seeing more healthcare facilities look beyond purchasing price point, and now more than ever, they understand the value that service providers can offer,” Vona said. “From containers, to compliance to supply chain management to logistics and more, Supply Chain professionals recognize the value that comes from choosing a full-service vendor that can help decipher complex federal, state and local regulations to ensure a facility maintains compliance.”

McCoy also points to relationship management as key.

“We are seeing a recognition by some progressive organizations that the ‘bundled approach’ to waste management is not ideal,” he said. “If a bundled approach is to be used, there is clear communication between the vendor and client on the cost basis for each line item service. More healthcare systems realize our methodology is based providing the best technology to allow hospitals to be operationally and financially independent. However, the alternative, outsourced infectious waste services, thrive financially by making hospitals dependent on the vendors’ operation.”

Healthmark’s Kovach expresses the value in working with suppliers.

“Partnering with companies is a strength and in this area it is key,” he said. “Using the correct waste management company can save money. The waste management companies have experts that can help predict your waste disposal cost. They can work with your clinical staff and help understand what type of waste is being generated, and the cost associated with that waste. Not all waste is equal in disposal cost and understanding that helps predict or estimate what your yearly cost might be for your budget. Think of the different type of waste generated by your laboratory. Analyzing the waste properly will help understand the cost of that waste to the facility and helps in the bidding process for the disposal of waste.”

Zierten contends that Supply Chain knows how to reduce waste, but may not have the right tools to drive change.

“Many of these leaders understand how much the supplies cost and how are they are typically used, but often don’t have the resources to synthesize that data or frame up or present their case to internal stakeholders in a way that resonates,” she said. “They lack visibility into the right data, such as cost-per-case or cost-per-case by physician, to hold these discussions and demonstrate the need for improvements. Management tools, such as information technology, supply data standards, and value analysis, can help these Supply Chain professionals hold data-driven discussions and pinpoint opportunities to reduce waste across the health system.”

Supply Chain just needs to be familiar with its entire operation, according to McWhorter.

“Supply Chain professionals understand the break points within their organizations well and they know how to duct tape it together when necessary,” she said. “This is a resourceful group of people who will merge spreadsheets to get the data they need and strive to excel with the tools they have. What executive leadership teams need to understand is that managing a supply chain is a complex responsibility with great opportunities for improvement and duct taped solutions are not the appropriate remedy.

“When you lack visibility into your spend, you lose the ability to make informed decisions around your data and products that is undoubtedly costing your organization money,” she added.

“Smart Supply Chain professionals usually never accept the status quo, and are seeking ways to balance cost with service,” Solomon concluded. “Also, they usually engage the end-user stakeholder in purchasing decisions.”

Written by Rick Dana Barlow. Click here for full article.

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