Many industries and large companies have focused on greening their supply chains in recent years. Walmart, for example, has transformed entire companies that supply products to their stores by asking suppliers to aggressively reduce packaging materials and weight, saving on fuel, reducing greenhouse gases and cutting down waste. In 2011, 60 leading apparel and footwear brand launched the Sustainable Apparel Coalition to reduce the environmental and social impacts of the clothes worn every day.
Walmart and the maker of your favorite jeans are fairly visible to consumers, and their efforts to green their supply chains have a big ripple effect across their sectors. Another large-scale industry is engaged in this process, and as efforts to green this sector’s supply chain are successful, it could have a significant, sweeping and far-reaching impact. The industry? Health care, which accounts for 17 percent of U.S. Gross Domestic Product and employs 18 million Americans.
Big impact, big challenges
The health care sector has good reason to take sustainability seriously. Health care is the second largest user of energy of any sector. It generates over 5.9 million tons of waste, and hospitals are generally one of the largest water users in local communities. Hospitals, with 24/7 operations, have a large carbon footprint.
More concerning is that environment and health are intertwined. The President of the United State’s 2008-2009 Cancer Report states “the true burden of environmentally induced cancers has been grossly underestimated” and encourages action to reduce exposure to carcinogens. Many hospitals are seeking ways to reduce any contributors to disease. In light of health care’s credo, “first do no harm,” sustainability has become part of the mission for hospitals and health systems.
The billions that health care facilities spend on supplies and equipment in any given year are a part of health care’s big impact. There are numerous associated environmental and human health impacts in the manufacture, use and disposal of products, from raw material extraction, transportation, manufacturing, distribution, use, maintenance, and end-of-life disposal.
For some products purchased, impacts on patient and staff health are of particular worry, such as cleaning solutions, polyvinyl chloride bags and tubes and other products that contain chemicals affecting or suspected of affecting human health.
Unlike the apparel or retail industries, however, health care is a highly regulated operation, and often products are tailored for specific medical applications. In addition, safety and reliability of products are important to hospitals and health care facilities. Meeting these requirements with environmentally preferable products can be a challenge.
Evaluating the environmentally preferable
Health care facilities nationwide have begun to tackle the issue of what products come through their doors in two ways: by working towards “environmentally preferable purchasing” (EPP) and by developing a set of common standards for contracting for products.
Health care products are, by and large, purchased through contracts developed by Group Purchasing Organizations (GPOs), which assist hospitals in providing needed supplies, equipment and products at the best possible pricing. Health care GPOs aggregate the purchasing volume of hospital members for various goods and services, and develop contracts with suppliers through which members may buy at group prices and terms. GPOs typically provide contracts for all types of medical supplies, nutrition, pharmacy, and laboratory items.
The GPOs and their hospital members have lacked a common set of standards for environmentally preferable products that can be specified in these contracts. This is partly because until now, few environmental standards existed for products and services in the health care sector. A few health care companies have broken new ground on their own to begin to change this dynamic, including Kaiser Permanente, which in 2010 announced its “Sustainability Scorecard” requiring suppliers to provide environmental data for $1 billion worth of medical equipment and products used in Kaiser hospitals, medical offices and other facilities.
To drive industry-wide change, however, medical supply companies need standardized information and specifications about what products are environmentally preferable, in much the same way that products are specified for safety and efficacy. And doing that requires industry-wide collaboration.
Moving towards industry-wide standards
The development of a common set of standards for environmentally preferable health care products began last year, when Practice Greenhealth, a national membership and networking organization for sustainable health care, launched the Greening the Supply Chain® initiative. Bringing together medical supply companies, the five largest GPOs and individual hospitals, the first task has been to develop and release the Standardized Environmental Questions for Medical Products. Based in part on Kaiser’s groundbreaking Sustainability Scorecard, these questions can inform the decisions in the group procurement process. They are being used in contracts by the five participating GPOs (Amerinet, HealthTrust Purchasing Group, MedAssets, Novation, LLC, and Premier healthcare alliance), which represented over $130 billion in health care spending last year.
The standardized environmental questions ask for information about the resources used to create products, certain chemicals of concern, packaging and end-of-life impact, and waste.
Next: Moving beyond first cost[pagebreak]
Moving beyond first cost
Many in the health care industry — indeed, in many other industries — worry about environmentally preferable products increasing the costs of operations. Environmentally preferable products may or may not cost more, but they do demand rethinking the criteria by which products are purchased in the first place. Procurement processes include the evaluation of many things, including safety, efficacy and cost. A robust EPP effort should seek to add several other factors to this process, such as the total cost of ownership, including impact and cost of exposure to chemicals of concern, cost of disposal, amount of energy and water used during a product’s use, and labor and other staff costs of maintaining and disposing something that may be hazardous to human health.
Evaluated on these more robust terms, environmentally preferable products can and often do have a reduced impact on human health and the environment, are cost neutral or save money while meeting key performance and efficiency measures.
Rigid endoscopes: reducing chemicals while maintaining safety
An example of using the total cost of ownership concept is Kaiser Permanente’s move from chemical cleaning of endoscopic cameras to sterilization with steam. Rigid endoscopes are used in minimally invasive surgeries and allow surgeons to see what they are doing without opening a patient up. Traditionally, they are cleaned with a hydrogen peroxide-based chemical deemed by the Occupational Safety and Health Administration as hazardous to workers and to aquatic life.
By working directly with suppliers and evaluating endoscopic camera heads based on the total cost of ownership, Kaiser was able to source endoscopic camera heads that could be steam cleaned. This one simple action reduced worker and environmental exposure to a chemical known to be a respiratory irritant and carcinogen, and it reduced costs by 31 percent.
Aligning purchasing with health care’s mission
Environmentally preferable purchasing has many benefits, but the largest may be the least tangible: aligning a hospital’s mission with the every day products used to promote the health of patients and their communities. As more health care organizations move to a “total health” focus for their patients and staff, the reduction of toxics, a decrease in waste and a greener supply chain will have a beneficial effect on the community at large. As awareness of the need to green health care’s supply chain grows, our hospitals and medical clinics will be places of true healing, for patients and the natural environment.
Beth Eckl is the Director of Practice Greenhealth’s Environmental Purchasing Program. She can be reached at email@example.com.