For an environmentally friendly supply chain, what we buy matters

Hospitals and other healthcare providers buy $200 billion worth of products and services every year from businesses that serve the healthcare sector. Much of that spending—about 70%—is bought through group purchasing organizations.

Most hospitals know that the selection of products they buy and use can have a tremendous impact on their sustainability performance. Products might contain or release hazardous chemicals or materials during production, use or disposal, and disposable products, and excess packaging creates waste that exacerbates a product's harmful impact on the environment. In addition, the energy or water requirements to use medical equipment can vary greatly from one product to another. In the end, when a product's useful life expires, disposing of the product presents another series of environmental choices and impacts.

It's clear that many of the sustainability challenges hospitals face each day are inextricably linked to the particulars of the products that are purchased and the end-to-end supply chain that the products and their components travel. This is why we at Practice Greenhealth believe strongly that what we buy matters. Creating a more sustainable hospital starts in large part with changing the products and supplies that come through the front door and leave as waste through the back door.

The challenge for individual hospitals and health systems is that the environmental attributes of products are often not apparent within some purchasing processes. However, market-wide progress is being made through several initiatives that bring together hospital sustainability and purchasing managers, GPOs, and medical product and service providers.

For a sustainability manager or purchasing professional at one hospital or health system, it can be extremely difficult to implement what's called environmentally preferred purchasing (EPP)—the purchasing of products that have a lower impact on human health and the environment. Much of this difficulty stems from basic factors such as a lack of clarity about a product's content and environmental attributes, the complexities of modern supply chains, and contractual terms that have not been updated to focus on environmental attributes to the same extent as they focus on other product attributes and price.

However, with collaboration across the supply chain, it is possible to change purchasing practices. This collaborative process is underway in several initiatives chartered by Practice Greenhealth. These include the Environmentally Preferable Purchasing Supporter Program, the EPP Business Leadership Coalition, and the Greening the Supply Chain Initiative. These initiatives bring GPOs, hospitals, and suppliers together to drive fundamental change.

Through this collaborative work, these sector participants have been able to develop standardized questions for medical products—questions that function as an industry standard for evaluating sustainability in the contracting process. They've also been able to create education and training opportunities for those involved in the EPP process.

Hospitals and healthcare systems have adopted environmentally preferable purchasing practices because the reduction of harm is part of their healing mission and because of the significant savings they've realized when they included the cost to purchase, use, and dispose of a product and its packaging.

For example, 62 hospitals participating in Practice Greenhealth's Healthier Hospitals Program saved $6 million over the past three years just by reformulating their surgical kits. These savings were achieved by reducing the number of surgical tools that were purchased and were not used in a given a given surgery, but had to be discarded because they were exposed to the surgical environment when the kit was opened. Fort Lauderdale's Broward Health's surgical kit reformulation project yielded a 30% savings on its $3.4 million annual spending and resulted in the elimination of nearly 25,000 pounds of surgical kit waste.

Another example of smart EPP practices took place at Virginia Mason Hospital and Medical Center in Seattle where they reduced supply cost by $3 million in three years by reprocessing single-use devices rather than disposing of them. Product designs and purchase contract terms that promote reprocessing are, again, the result of supply chain collaboration.

The lesson for hospitals and health systems that want to change purchasing practices is clear: Don't Go It Alone. Only by collaborating with your peers and your product and service partners can you drive the supply, demand and economies of a greener supply chain.

Jeffrey Brown is executive director of Practice Greenhealth, based in Reston, Va.