...the pandemic and its supply chain challenges have renewed the potential power behind a “circular economy” perspective in US healthcare...
In US healthcare, we need to adopt a different view on how technology is used. US healthcare, which is the second-largest generator of garbage in our economy, has not caught up. Instead, more and more devices are labeled “single-use,” and garbage truck after garbage truck hauls away medical and hospital waste from the hospital every day. While the environmental movement in the US in the late 2000s made a huge impact on procurement practices, etc., I believe that progress has stalled. Now, the pandemic and its supply chain challenges have renewed the potential power behind a “circular economy” perspective in US healthcare, due to the confluence of three developments:
- Financial havoc from the pandemic: Since April, US hospitals have functioned with a negative net operating margin, leaving many hospitals in financial disaster territory: While profit generating elective procedures (notably cardiology and orthopedics) were shut down, loss generating activities related to handling the pandemic were skyrocketing. This has resulted in added focus on how to reduce costs. Circular economy initiatives like single-use device reprocessing clearly have a role to play here, and while manufacturers have not showed up to develop more durable devices or adopt single-use device reprocessing, hospitals are strengthening their commitment to this key supply chain strategy.
- The single-use culture of healthcare suffered another blow from supply chain challenges associated with the pandemic, particularly in the area of PPE supplies. Infection control considerations (and supplier strategies) have historically created a situation in hospitals where we throw away as much as possible after using it once – masks, gloves, devices, etc. – without a single thought about the financial and environmental consequences. This infection control consumption hegemony was challenged when hospital staff all of a sudden re-used masks for days or had to use emergency authorized re-used PPE. Do we really have to throw it all away? Is there a way for manufacturers to provide better PPE that can be re-used? How do we make the supply chain more resilient?
- Environmentally sustainable procurement preferences: Although the environmental movement in healthcare has stalled in some ways, procurement practices are increasingly guided by environmental considerations. The challenge here is that while staff at US hospitals have become more environmentally aware, manufacturers have largely failed to respond beyond superficial or symbolic fixes. Hospitals need to demand more radical solutions that impact product design and technology choice. Thankfully, the environmental movement is getting a helping hand from 1) and 2).
As hospitals take stock of their situations and evaluate how to manage procurement, costs, demand, and service line activities in a prolonged COVID-19 crisis, they need to look more fundamentally at technology utilization. The principle of the circular economy provides a great framework for this that can simultaneously address cost reduction, supply chain resiliency, and environmental values.