Cost Considerations of Hospital Waste
See how reprocessing healthcare waste streams can yield financial and
environmental benefits.
By Tim Maurice, CPA, MBA, & John Danby LEED AP BD+C, CIH, CSP
Vol. 3 • Issue 9• Page 22
CFO Perspective
Finance executives are continually on the lookout to find ways to reduce costs.
Administrators at UC Davis Health System have recognized opportunities for significant
cost reduction in a traditionally overlooked but increasingly important function:
management of healthcare waste streams.
Attention to environmental sustainability is a strategic initiative that many health
systems are embracing, so the opportunity to reduce expenses while improving
sustainability offers dual benefits. UC Davis Health System takes this opportunity to a
new level by integrating financial and environmental stewardship into the strategic
planning process.
Food Service Products
Organizations commonly justify increased expenses associated with environmental
sustainability strategies as a natural consequence of improving environmental
stewardship. Such cost increases are most likely in areas lacking easy solutions. For
example, last year UC Davis medical student leaders recommended replacement of
Styrofoam and plastic food service products with compostable plates and cups.
Compostable products are 50 percent more costly than disposables, but are visible
reminders of waste generated every day in our cafeterias.
Acceptance of this extra cost demonstrates a commitment to our social and
environmental responsibility - and it yielded an unanticipated benefit. This highly visible
commitment inspired innovation among UC Davis Health System staff members to
reduce their environmental footprint and suggest numerous ideas that will reap both
environmental and financial benefits for years to come.
Waste Hauling
In 2011, UC Davis Health System submitted requests for proposals to search for a new
waste-hauling service. Based on cost and service capabilities, the institution selected a
hauling firm that offered opportunities to recycle and improve environmental
stewardship, and saved almost 25 percent on refuse service costs compared with the
previous program. This waste hauler pulverizes the compostable food service products,
essential for the mulching process to achieve the intended environmental gain.
Medical Waste Savings
Evaluation of medical waste constitutes another significant cost-saving opportunity. For
many years, UC Davis Health System treated medical waste onsite in microwave
disinfection units. The health system has saved more than $100,000 since it began
using a vendor to handle all medical waste services when the microwave units reached
the end of their useful service life.
The audit and training program that the vendor conducts offers potential to identify
further ways to reduce medical waste, which will result in additional savings and
improved environmental stewardship.
Reprocessing SUDs
Organizations can achieve additional gains by appointing a value analyst to examine
the effectiveness and efficiency of existing processes to determine whether other
internal or marketplace opportunities can enhance fiscal and environmental
sustainability.
UC Davis Health System's value analyst found opportunity in reprocessing single-use
medical devices (SUDs). Many medical devices used in surgery and other aspects of
patient care are designated as single-use, and are disposed as medical waste post-use.
Several innovative vendors have received permission from the FDA to reprocess these
SUDs, under strict criteria, for reuse. These vendors established a SUDs collection
process: Ship used devices to their reprocessing facility, recondition and sterilize them,
and offer them for sale at a significant discount.
On the recommendation of the value analyst, UC Davis Health System tested this
concept with reprocessed alternative leg pressure sleeves (ALPS), which are
noninvasive devices. Reprocessing went well; however, some surgeons initially were
hesitant to use reprocessed invasive SUDs. The vendor provided clinical evidence
supporting the safety of the reprocessed devices, and the medical staff now supports
the reprocessed devices.
Today, UC Davis Health System routinely purchases several types of reprocessed
invasive SUDs, resulting in estimated overall annual savings of $400,000, along with
avoidance of seven tons of medical waste that otherwise could have been created.
Working in collaboration, UC Davis Health System administrators, value analyst
personnel and medical staff members anticipate numerous new opportunities through
expansion of this program.
Battery Recycling
Battery reuse and recycling constitutes another excellent means of diverting products
from landfills and saving hazardous waste disposal costs. Virtually all rechargeable
batteries can be managed by the Rechargeable Battery Recycling Corporation (RBRC),
also known as Call2Recycle, a free nonprofit service that battery manufacturers
subsidize. RBRC furnishes shipping containers, instructions and free shipping for
depleted dry cell batteries. Local industrial battery retailers pick up larger sealed leadacid batteries at no charge because they receive a recycling rebate from their
wholesalers. Similarly, automotive battery retailers accept and recycle battery cores in
exchange for purchase of replacement batteries.
New Opportunities
Innovative reuse and recycling are helping advance the UC Davis Health System vision
of a healthier world not only in the realm of human health and corporate social
responsibility, but also in sustainability of the natural environment. Toward that end,
health system employees continue to discover and pursue new recycling and reuse
opportunities in reusable linens in surgical packs, surplus equipment donation, greater
consideration of product packaging in guiding product selection, construction and
demolition waste diversion, and other strategies.
Tim Maurice is chief financial officer and John Danby is sustainability administrator and
environmental programs coordinator, both at UC Davis Health System.
For additional ideas, organizations can visit Practice Greenhealth
(www.practicegreenhealth.org), a reliable sustainability resource. For a summary of UC
Sustainability efforts, courses and resources, visit
http://sustainability.universityofcalifornia.edu/about.html.
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