Digital Transformation

The High Cost of Poor Waste Management in Healthcare

January 8, 2021

American hospitals throw away the majority of materials they use, at great financial and environment cost: 7,000 tons of solid waste are generated by the U.S. healthcare system every day, at a cost of $10 billion per year in total.

All told, medical facilities overpay for waste management by $7 billion, due to an over reliance on single use materials and improper disposal of items, particularly in regulated medical waste (RMW) and landfill bins. 

Second only to labor costs, supply chain expenses make up 33% of the operating budget for hospitals, averaging $72 million in expenses for a standard hospital. For example, the average operating room disposes of $968 worth of medical supplies per each procedure, which adds up to nearly $3 million annually, according to the Journal of Neurosurgery

The COVID-19 pandemic has only compounded the problem, with greater volumes of personal protective equipment (PPE) being generated as the pandemic sweeps through American communities. For example, Northwell Health’s 23 hospitals in New York saw a 2x increase in disposable glove use, from 250,000 pre-pandemic to 500,000 per day during the COVID-19 surge. Nationwide, as of June 10th FEMA had shipped 94.7 million N95 masks, 14.3 million face shields, 44.6 million surgical gloves and more than 1 billion gloves, all of which must be discarded after use.

The good news? Hospitals can reap major cost savings, and further their zero waste or sustainability goals by:

  • Reducing total waste generated from unused medical supplies
  • Reducing pre-consumer food waste 
  • Sending less materials to landfill by recycling and composting
  • Reducing  improper disposal of items into regulated medical waste bins

Failure to identify the issues and properly dispose of these items results in exorbitant costs. Non-regulated waste makes up 85% of total waste generated by the average hospital, 60% of which is either recyclable or compostable and is cheaper to divert than landfill.

Many items that could be recycled or landfilled end up in regulated medical waste (RMW) bins, whose disposal fees are 10x more than landfilling and 30x more than recycling. In hospitals with poor disposal and sorting, RMW bins can account for 20-40% of a hospital's total waste volume. 

To validate these problems further, we spoke with more than 32 Directors of Environmental Services (EVS) and Environment Health & Safety (EHS) from hospitals across 13 states, to better understand their challenges with waste. We learned that discarding unused medical supplies cost each hospital around $100,000 per year, and that incorrect waste disposal resulted in high hauling costs and fines for their facilities, at around $10,000 per month. 

Other challenges these Directors had at their facilities included:

  • High amounts of pre-consumer food waste being generated in kitchens
  • Hard to find vendors to take away bulky items (such as beds or furniture) 
  • Continuous, targeted education of clinical & operations staff regarding proper waste disposal and identifying issues
  • Slow documentation and communication of maintenance issues, such as missed pickups, eating up at least 50 hours/month of staff time
  • Cumbersome processes to crunch waste data into separate streams of solid, bio-hazard, hazardous, donations, reprocessed, shredded, etc. 
  • Need for weekly, if not daily, Environment of Care Rounding to monitor bins

In total, waste management processes that correctly identify bad practices and institute solutions can save healthcare facilities between 40% - 70% of their waste disposal costs, equal to $4 - $7 billion across all facilities in the U.S.

Here’s why:

Hospitals don’t have a consistent and accurate lens into their waste stream. Without this ability, they don’t know where problems are occurring, which items are at fault or why they are paying so much. At the core of these problems is insufficient data, limited insights and burdensome data collection methods.

For example, operating rooms are often the worst offenders for disposing of non-regulated waste into RMW bins. Yet without the ability to see the breakdown of RMW generation at a precise level, the hospital cannot tell which operating rooms are most at fault and efforts to tackle the issue will be imprecise. 

Equipped with modern digital tools to efficiently capture data, gain in-depth analysis and actionable insights, waste management in healthcare can be drastically improved. Consider a few examples:

  • By regularly tracking RMW, trash, recycling and composting streams, facility supervisors can identify where misplacement and contamination is occurring
  • With immediate uploads of data captured in the field to the cloud, alerts can be triggered when costly mistakes such as missed pickups or hazardous waste contamination occur, allowing them to be identified and quickly remediated
  • Granular data from waste stream content and disposal patterns can inform initiatives to lower bin contamination, boost diversion and reduce landfill volume

Summary: 

Medical facilities can reap significant savings and make progress towards zero waste or LEED certification, by bringing waste management into the 21st century via digital tools and processes. Savings can be as much as 10x the cost of implementing waste monitoring and creating programs to reach dedication, diversion and contamination goals. 

Demonstrating environmental values and creating a safe, clean workplace will also boost employee morale, satisfaction and retention. 

As a result of freeing up money and labor hours previously spent on waste management, hospitals can instead allocate these resources towards their primary goals of employee safety and patient care.

For more information on how to set up a 21st century lean process to identify waste, save money and protect resources, please contact us

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