2021 will be the year when a circular healthcare economy will become a vital conversation in the United States. The pandemic has led to a focus on the need to re-use some medical devices and underscored the need for hospitals to critically review their supply chain. During his very first days in office, President Biden placed the healthcare supply chain on the top of his agenda. Meanwhile, US hospitals seeing monthly losses of more than $50 billion (due to massive slow-down of revenue-generating non-emergency procedures and steep declines in patient volume) understand that financial sustainability comes with fundamental changes to the way they buy and use medical equipment, pharmaceuticals, and other supplies.
At the same time, the new administration has indicated it will have a strong focus on environmental sustainability: The United States is quite clearly lagging behind most other First-World countries when it comes to systemic reform to reduce unnecessary waste and greenhouse gas emissions, and this, likewise, is high on the administration’s agenda.
A circular healthcare economy
There are few clear pathways to supply chain solutions that simultaneously reduce costs and environmental impact. The term “circular economy” has been used to describe such solutions that defy the traditional “take-make-dispose” approach to resource consumption and put in its place a regenerative approach where used products and energy are captured and used as input into another production process. The circular economy at the same time reduces costs and preserves the environment.
Globally, the health sector is responsible for 4.6% of global greenhouse gas emissions, more than a quarter of which stem from the US healthcare system. In healthcare, the linear (take-make-dispose) approach to consumption is even more pronounced than in American culture in general. In a traditional healthcare economy, we take resources from the environment, make the devices, use them in the hospital, and then throw them away.
And why do we do that? There are four primary reasons:
- First, healthcare has a single-use mindset – it is safer to throw medical devices away after they have been used. The perception is that if we throw used devices away, we reduce infection risk: The less we re-use, the safer.
- Second, it is difficult to re-use devices. They have to be collected, transported, cleaned, tested, and sometimes sterilized before re-use. It’s much easier to throw the device away after a single use and grab another one.
- Third, many devices are so inexpensive and the necessary investment to re-use so high that it is financially unsound to engage in re-use.
- Fourth, the industry that manufactures devices has discovered that single-use means the hospital buys more, so by designing devices for a single use, the manufacturer maximizes its profits.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
However, current economic and supply chain pressures on healthcare have shown that the purely linear use-and-throw-away model is not sustainable:
- It simply costs too much.
- It is bad for the environment.
- When demand goes up – such as for certain types of devices during the pandemic – supplies cannot be found.
Therefore, the circular healthcare economy discussion is unavoidable. However, circular economy solutions in healthcare must somehow overcome the four barriers identified above. In this regard, there is an example that can prove useful in illuminating the path forward across multiple supply categories.
Single-use device reprocessing
Single-use device reprocessing is arguably the most successful and widespread example of a circular healthcare economy: Medical devices labeled “single-use” by the manufacturer are collected after procedures or other use and stored. The medical device reprocessing company’s representative picks up the devices and ships them to the reprocessing plant. Here, they are traced and registered, cleaned, tested, and sterilized. At this point, the hospital can purchase the reprocessed devices for a fraction of the price paid for a new device. After re-use, devices are collected, and parts are recycled. Most importantly: It is all FDA controlled, and reprocessors can only perform these services after receiving a device-specific clearance from FDA and demonstrating the reprocessed devices are functionally similar to new devices and don’t present any added patient risk.
Already today, single-use device reprocessing provides important cost savings to hospitals in the United States. Hospitals save more than $400 million per year through the use of reprocessed single-use devices. One of the biggest areas for reprocessing savings is in cardiology, where US hospitals could save a combined $800 million per year. Some US hospitals save more than $1 million per year using reprocessed devices in the Electrophysiology lab. However, the savings potential is far from being fully realized. Some estimates suggest that US hospitals could add $500M in savings by fully leveraging reprocessing.
However, single-use device reprocessing does more than save hospitals money. It also helps the environment, and it makes the supply chain more resilient. Last December, the Journal Health Affairs concluded that the health sector is “responsible for 4.6% of global greenhouse gas emissions” and that the “vast majority of health care global greenhouse gas emissions originate in the supply chain.” Reprocessing reduces solid waste from US hospitals by more than 6,000 tons per year.
But reprocessing means transporting devices, using chemicals to clean them, transporting them back to the hospitals – all activities that have an environmental footprint. So how much better is a reprocessed device actually compared with a new device when it comes to the environment? It turns out that reprocessed Electrophysiology catheters have an environmental impact that is less than HALF of the impact of a new device.
That was the revelation revealed by a recent study by the Fraunhofer Institute for Environmental, Safety, and Energy Technology. Published on Jan. 17 in the journal Sustainability, this study reveals the difference in global warming impact between new and reprocessed devices. Although electricity and detergents are used in reprocessing, the impact of plastic production and other elements on a new device makes the reprocessed devices much less environmentally harmful. Hospitals can do many things to reduce their environmental impact, but by using reprocessed devices instead of new ones, they can immediately reduce the impact by 50%.
Single-use device reprocessing challenges the single-use mindset in healthcare. Effective systems are in place for collecting the used devices, the process of making the devices ready for another use is FDA controlled, and devices seamlessly go back to the hospital for another use.
Is it possible for us to build a guide for how US healthcare can adopt more circular economy solutions, using single-use device reprocessing as a template?
A roadmap to circular economy solutions
Single-use device reprocessing has been challenged with the fundamental barriers to circular economy solutions. And during 20+ years, the industry has overcome these to create a process that seamlessly saves hospitals large amounts of money and reduces environmental impact.
To achieve similar results, healthcare can leverage a reprocessing-based template by focusing on the following:
- Identify medical supplies that are expensive and single-use. This could be medical devices, but it could also be any number of consumables the hospital uses in the cafeteria, in transportation, in visitor management, etc. Some of the most expensive hospital supplies are single-use devices. Most of these are not reprocessed.
- Perform a cost-benefit analysis to determine that re-use doesn’t imply added costs.
- Determine if the selected supplies can be safely cleaned and re-used. Many medical devices and other supplies cannot be safely re-used because of their design, their complexity, or due to safety risks for patients.
- Work with hospital departments, manufacturers, reprocessing companies, or other outside partners to ensure reprocessing or remanufacturing processes are safe, operationally feasible and economical. In some cases, this will mean asking manufacturers to change their products or asking reprocessors to seek clearances for devices they haven’t previously been able to reprocess: Many devices that could be reprocessed are not currently reprocessed.
- Create a collection and re-use infrastructure. This includes collection containers in which to place used supplies, instructions about how to handle used supplies, signage, new SOPs, and routines for storing and buying back/re-entering supplies into the inventory management system.
- Train appropriate staff to follow collection and re-use instructions – from capturing used supplies to buying back and inventorizing.
- Mandate compliance with re-use process. This is often the toughest part. It is hard to change a hospital staff’s routine, particularly because the staff is often over-burdened.
Reprocessing is an established circular economy solution. In fact, it may be the only circular healthcare economy model that is successfully used. Hospitals can learn from this to drive additional savings and promote a more sustainable US healthcare system.
Photo: DragonTiger, Getty Images
