Hospitals Find ROI in Recycling Efforts

In their relentless quest to contain costs, hospitals and health systems are examining all areas of their operations for signs of waste, even materials once considered trash.

They may be able to save billions of dollars.

Last year, an initiative of 350 hospitals recycled more than 50 million pounds of materials, diverted 61.5 million pounds of construction and demolition waste from landfills, and saved almost $32 million from single-use medical device reprocessing. These figures appear in the first Milestone Report of  the Healthier Hospitals Initiative, a nonprofit coalition whose mission is to reduce healthcare's negative impact on the environment.

Three nonprofits, Health Care Without Harm (HCWH), The Center for Health Design, and Practice Greenhealth created the HHI, Together they are working with industry experts to identify six specific measurable sustainability initiatives (renamed 'Challenges'): Engaged Leadership, Healthier Food, Leaner Energy, Less Waste, Safer Chemicals, and Smarter Purchasing.

So far, 700 hospitals have made commitments to the HHI. That includes 13 health systems and 500 independent hospitals, which represent $20 billion in collective purchasing power. HHI estimates that the 2,000 hospitals it hopes to eventually enroll can save billions. The healthcare  industry's shift towards sustainability could influence other industries toward a healthier mindset as well.

Recycling, regulated medical waste reduction, energy management, and single-use device reprocessing were the four HHI Challenge areas with highest participation levels and represented the areas with the fastest financial rewards, says the report.

"The ROI is quickest on initiatives such as reducing energy expenditures," says Gary Cohen, founder of HHI. "ROI is usually 3.5 years on expenditures in these areas. People can start tomorrow with a whole set of things that barely cost any money at all."

Some hospital CFOs are setting aside green revolving funds to finance these initiatives, which invest in their energy efficiency strategies, says Cohen. Then they are taking the return on those energy and waste reduction initiatives to invest in the next level.

Using less energy and obtaining it from cleaner sources can positively impact the respiratory health of their surrounding communities, as well as their facility costs, says the HHI report.

"If you aren't doing those things you just aren't operating an efficient business in healthcare," says Cohen. "On the waste side, there's almost no capital expenditure at all, it's just process change, [toward] recycling and waste segregation, so that waste goes down, so that doesn't spend any money. That's just attention, it's just a matter of learning from others. Reprocessing saves lots of money."

Single-use device reprocessing had the highest data-sharing rate of all the HHI Challenges, which indicates how important it is to align business partners and supply chain professionals in order to track data and monitor performance. The 185 hospitals that have begun the SUD process under the HHI initiative saved an estimated $32 million in 2012.

Based on participation rates and activities, the HHI report says that establishing a project lead for sustainability efforts and creating a related mission statement are "essential steps for all organizations pursuing an environmental sustainability program."

Ninety-four percent of 143 enrollees in the ‘Engaged Leadership Challenge’ have appointed a sustainability executive owner on the leadership team. The high level of participation demonstrates a growing interest in improving environmental impacts on patients and the surrounding environment.

"It demonstrates the transition of health care sustainability from grassroots to leadership offices, indicating that it is becoming less of a one-off trend and more of a strategic priority for health care organizations," says the report.