Now is the time to take serious action to reform wasteful hospital practices and strengthen the healthcare supply chain. The high cost of American healthcare has topped headlines for years.
Now is the time to take serious action to reform wasteful hospital practices and strengthen the healthcare supply chain. The high cost of American healthcare has topped headlines for years. The media has historically focused on issues such as lowering the cost of prescription drugs, but the world has awoken to new realities as illuminated by the COVID 19 pandemic. Fighting COVID has taken an enormous financial toll on hospitals, and the healthcare supply chain is vulnerable.
The American Hospital Association estimates $120.5 billion in financial losses from July 2020 to year-end, on top of $202 billion between March and June of this year. Hospitals were largely already operating on slim margins of around 2%, and the shut-down of revenue generating procedures, increase in costs from COVID-19, and the lack of access to critical Personal Protective Equipment (PPE) have shocked the industry.
What is needed is a mind shift to think about healthcare supplies as assets rather than disposable items.To ensure the best outcomes possible for healthcare workers and patients, we must urgently identify ways to use medical supplies more efficiently. Like our grandparents who learned to tighten their belts after the great depression, the time has come for hospitals to reduce and reuse what they can to create necessary resiliency and capacity in the supply chain. It is also time to ultimately become better prepared for the next wave of COVID-19 patients, as well as other supply, demand, and health challenges.
A comprehensive approach to supply chain optimization across all healthcare practices simultaneously addresses the financial, environmental, and clinical sustainability of hospital operations. In the article “Improving Value in Health Care Through Comprehensive Supply Optimization,” I, Cassandra Thiel, published in JAMA with Leora Horowitz, MD, we took an evidence-based look into supply chain waste. We felt the findings were important last fall when the article published, but now we know them to be urgent.
The U.S. spends nearly twice as much on healthcare as other high-income countries. Most efforts to reduce these costs have focused on avoiding unnecessary or excess care. However, overtreatment represents only 6% of health care costs. Excess spending on pharmaceuticals and medical devices are another, and much less studied, driver of supply chain vulnerability and waste. To create financial, environmental, and clinical sustainability hospitals must establish a ‘reduce and reuse’ culture, and demand that drug and device makers better consider the financial, environmental, and clinical pressures on healthcare providers today.
Indeed, current studies find that healthcare practices in the U.S., whether necessary or not, all come with inordinate amounts of waste. Some of the key findings we pointed to in the JAMA article provide a convincing case that, even before COVID-19, wasteful practices at hospitals need to be minimized.Examples we found include:
- U.S. hospitals generate more than 4.7 million pounds of waste annually, which equates to roughly 27 pounds of waste per staffed hospital bed in America per day.
The U.S. health sector spent approximately $5.9 billion on medical waste management in 2014 alone.
- A study of pharmaceutical waste in cataract surgeries found that across 4 facilities and 40 cases studied, an average of 45% of drugs (by volume) were unused and discarded after every case. Two of the four facilities studied waste $190,000 worth of drugs per year, an amount that would pay for 50 additional surgeries per year.
- A survey of waste from 58 neurological procedures found that on average, 13% of surgical supplies went unused.Unused items become waste and must be discarded. The survey concluded that $653 in unused supplies went to waste per case, equally $2.9 million annually for the neurosurgery suite studied.
- Inconsistent practices among surgeons within healthcare facilities results in further waste. Directing surgeons to use waste-reducing practices resulted in 17% reduction in the cost of surgical supplies for laparoscopic appendectomies per case, not including cost savings from disposing of fewer wasted materials.
- Interviews with surgeons and anesthesiologists indicate they are already knowledgeable that much of the surgical waste they produce is unnecessary and has been increasing overtime.
No single solution will fix the problem, and some approaches require more effort than others. From process and policy improvements that standardize care pathways and decrease waste of unused supplies to procurement practices that prioritize reusability and waste reduction, we can reduce burden on the supply chain, while simultaneously lowering costs and eliminating waste. COVID-19’s impact on healthcare brings urgent attention to our need to rethink how we order and use supplies in healthcare.We must place greater emphasis on prioritizing and improving efficiency and resiliency, particularly when it comes to the supply chain for medical devices and supplies, including PPE.
The environmental movement of the 1990s introduced a mantra based on a prioritization of how we tackle waste. “Reduce, Reuse, Recycle,” is every bit as appropriate today as it was then. However, the same principles are now reinforced by their impact on clinical and supply chain sustainability. As a result, the movement has renewed relevance and strength.But “Reduce” and “Reuse” take on new urgency in helping our hospitals to become more resilient to be better prepared for a future pandemic or massive disruption.
Here are considerations hospitals should take immediately:
The drastic shift in how hospitals handle PPE is an indicator of how undervalued supplies have been in the U.S. healthcare system. Where clinicians used to pull a single mask or pair of gloves from a box, dropping a few on the floor and throwing them away, these supplies are now often distributed under lock and key in set quantities for the day or week, based on number of staff and expected coronavirus cases. Minimizing use and waste should become the permanent mantra.
Prior to COVID-19, the U.S. healthcare system unnecessarily wasted supplies. Individual clinicians, departments, hospitals, and health systems should audit their practice for sources of unnecessary waste and create intentional standards to reduce waste. Clinical practices, device and supply types, as well as stocking or cleaning protocols must be assessed to reduce the resources needed to provide care.
In addition to reducing device and supply usage, health care providers must promote a culture of purchasing more sustainable and resilient supply chain options. This means insisting on medical devices and supplies that can be reused by hospitals or reprocessed by regulated firms. Further, providers should insist that manufacturers design and market devices and supplies as reusable or “reprocess-able.” Hospital staff at all levels should be incentivized to identify practices that can save resources.
Supply management approaches aimed at reducing financial and environmental waste must be considered immediately at hospitals given COVID 19-related supply chain shortages and the need for cost savings to offset lost income and to better prepare for the likely next wave of patients.But going forward, cost-savings from reduced inventory needs and reduced waste must be calculated to further educate hospital leadership on the benefits of resource reduction programs.
The shortage of PPE in American hospitals during the heights of the pandemic has left our healthcare providers inadequately protected while doing their jobs. Our healthcare workers have been taking great risks going into work every day. We have an obligation to ensure this never happens again.America has become reliant on disposable PPE, most of which is supplied by China. Reusable products – and yes, there are reusable PPE – can strengthen our resilience, as having a stock of reusable supplies would provide hospitals with a constant, controlled supply or ‘base load’ of necessary equipment, which they could supplement with disposables as needed.Supply chain strengthening may also call for domestic sources of these products to further strengthen the supply chain.
Reprocessing of “single use devices” (SUDs) is another critical solution in the realm of reuse. While SUDs cannot be reprocessed as many times as “reusable” devices, SUD reprocessing is another tool hospitals have to build resilience into the supply chain.Further, by reprocessing existing device assets, hospitals reduce costs by reducing demands of new equipment, not to mention drive down their hazardous waste disposal costs.Regardless of where the SUD is originally manufactured, reprocessing takes place more locally, putting to use existing assets with relatively quick turnaround times. Some reprocessed SUDs, including pulse oximeters and blood pressure cuffs, are used frequently with COVID-19 patients and are being reprocessed to lower costs for hospitals. The FDA regulates this practice and requires reprocessed devices to be “substantially equivalent” to their original counterparts.
More research is needed to study the long-term costs associated with reusable or reprocessable versus disposable equipment use. Fuller life cycle analyses that estimate environmental footprints are needed, but, at its core, reusing a product and minimizing financial and environmental waste is likely a net positive economically and for the environment.The hospital industry would be well-served to convene a special panel, comprised of supply chain managers at hospitals, providers, manufacturers, and academics to gather lessons learned and create a best practice guide for reducing waste by evaluating reuse efforts that can be standardized and implemented immediately.
For too long, we’ve been wasteful in our medical device and supply usage practices, gobbling up a wide range of disposables and throwing them away after one use, just because the manufacturer said so or because it was ‘easy’ or ‘cheap’ or perceived as the ‘safest’ thing to do for patients. This has led to an inexcusable amount of waste produced by hospitals, and a relative lack of value in the medical care provided in the US compared to other high-income countries.
The shortage of critical medical supplies brought on by the COVID-19 pandemic brings into sharper focus the weaknesses in both global medical supply chains and hospitals’ current use of resources. The healthcare supply chain has a moral obligation to reduce unnecessary waste so that precious financial resources can be stretched farther, and the sizable financial, environmental and public health impact of these practices can be eliminated.
While the pandemic will likely increase the amount of waste generated, supply chain managers should review wasteful practices in order to save budgets and supplies to be better prepared for future emergencies or disruptions. By looking at medical devices and supplies as assets, hospitals can reduce waste, lower costs, and build a more resilient supply chain. We’re currently at war against a virus, and in war time we conserve.Hospitals that find ways to conserve supplies, reduce waste, and save money will be better equipped to fight on the front line. We can fight the virus and prepare for future emergencies, including pandemics and climate change simultaneously.
Cassandra Thiel, PhD, is assistant professor at New York University School of Medicine and Daniel J. Vukelich, Esq., is president of association of Medical Device Reprocessors.