Practice Greenhealth has made yet another move into supply chain with the expected launch of a tool that helps hospitals forecast the total cost of using and maintaining a product, beyond just the purchase price.
The Greenhealth Cost of Ownership Calculator, expected to launch on Tuesday, will let hospitals compare the often-hidden costs that come with purchasing equipment, such as maintenance, energy, water use and disposal. The Reston, Va.-based not-for-profit, which helps its hospital members implement sustainable best practices, hopes the tool will help hospitals see the benefit of “green products” in reducing long-term costs.
The tool is based in an Excel spreadsheet filled with predetermined algorithms, and is free to any health system. It's designed by Trucost, a London-based company that builds similar tools across industries.
Users are able to enter the purchase costs of products for which they're hoping to compare costs, like an environmentally friendly laboratory freezer and a traditional lab freezer, for example, and the calculator will show which product is the most cost-effective over the years that the product is owned. Users can use default data used to calculate the energy use, or they can input their own data if they're aware of the products' specific energy usage.
Andrew Madden, senior director of supply chain at Dana-Farber Cancer Institute, said during a demonstration that supply chain executives have for years been “feeding leaders the wrong information” when comparing products, giving them the “price at the pump” instead of the true cost of owning a product.
Hospitals build LEED buildings but fill them with equipment that isn't sustainable, Madden said.
The launch of the purchasing calculator comes a few months after Practice Greenhealth announced that it would found a for-profit group purchasing organization focused on environmentally friendly products and services called Greenhealth Exchange. The group's initial members include Dartmouth-Hitchcock, Dignity Health, Gundersen Health System and Partners HealthCare.
As the product grows over coming months, it will be incorporated more into the “green” GPO, a Practice Greenhealth spokeswoman said. Eventually, certain companies will receive a higher sustainability rating in the Greenhealth Exchange portfolio if they use the calculator in developing their products.