How might healthcare supply chain stake claim on sustainability?

“Supply chain leaders should leverage the experience they’ve gained through collaboration with clinical initiatives to become involved in sustainability work at their organization,” Starr indicated. “Working with other champions in the organization to develop priorities, ascertain requirements, set goals, identify alternatives and measure results are strengths and tools supply chain professionals use routinely to implement improvements. These same steps can be applied to sustainability focused projects.

“Gaining C-suite support can be done using methods employed for other supply chain projects: Outline the benefits including components such as cost-savings, improved clinical outcomes, improved community or employee health, supporting the organization’s mission, improving resiliency, community stewardship, etc.,” she added.

Sustainability leadership

Supply Chain serves as a logical choice for sustainability leadership, according to Evelyn Miller, Senior Manager, Environmental, Social and Governance (ESG), Medline Industries.

“A majority of a health system’s environmental footprints come from Scope 3 emissions, which are the result of activities from assets not owned or controlled by the reporting organization (EPA.gov),” Miller indicated. “This includes elements of the supply chain. When you consider where health systems can make the greatest impact, oftentimes it’s through the help of their suppliers. This gives supply chain professionals all the more reason to be leading the charge on environmental sustainability efforts internally.

“Of course, it’s always helpful to demonstrate the business case for environmental sustainability,” she continued. “To help start, consider switching some of your more cost-effective products to a sustainable alternative. Enrolling in a reprocessing program is another relatively quick win that can help demonstrate strong business and environmental results.”

“Business has changed rapidly in recent years,” she noted. “It is important to upskill supply chain professionals so they’re aware of the rapidly changing expectations, including regulations around sustainability requirements. Organizations should also revisit their supplier and employee codes of conduct to ensure they meet shifting stakeholder expectations and regulations. And finally, collaborate with industry groups and across the value chain to bring consistency to sustainability priorities and expectations of suppliers, which will encourage confidence in the investments required to scale sustainability impact.”

Buckley shares three key tips for Supply Chain approaching the C-suite for the green light. 

“First, establish robust governance practices and engage stakeholders, including through exercises that result in internal and external stakeholder feedback,” she said. “Also, create a reporting plan that has a maturation curve and includes goalsetting alongside thoughtful disclosures that build trust and create accountability. Finally, it is good practice to embed prioritized sustainability requirements into [requests for proposals] and tender processes. Ensure there is transparency in the weighting of this criteria and that each question has a purpose aligned with the healthcare system’s sustainability strategy.”  

Paul Murphy, Vice President, Major Accounts & Vertical Markets, Canon Solutions America Inc., acknowledges that sustainability may not be high on C-suite priority lists but expects its position to be changing and elevating.

“Sustainability efforts are not necessarily at the forefront of every healthcare organization’s day-to-day activities, but as more healthcare organizations realize that population health is intrinsically connected to ESG initiatives, incorporating sustainability into the decision-making process becomes a natural extension of care delivery,” he indicated. “Most healthcare organizations have mission and vision statements that highlight their commitment to serving their communities and for the long term, but these statements rarely articulate a measurable action.

“Supply chain professionals need to work within the institution’s framework to identify sustainability champions both inside and outside the healthcare environment,” Murphy continued. “Asking the right questions to determine what suppliers can offer is a key part of this process. More often than not, sustainability efforts end up supporting the enhancement of healthcare services by establishing measurable goals, creating efficiencies and reducing waste. Supply Chain can improve its external reputation by becoming the lead in these initiatives and a resource for external practices.”

Introspection for interjection

If anything, healthcare organizations should look inward at their own operations to make outward manifestations of sustainability, according to Mikhail Davis, Director of Technical Sustainability, Interface.

To wit, the Centers for Disease Control and Prevention and the World Health Organization both cite climate change as the No. 1 threat to public health in this century, even after a global pandemic, Davis notes.

“For Supply Chain to make the case for sustainability efforts, they need to start with what their organization already believes is important,” he continued. “Maybe it’s public health in general, maybe it’s specific health conditions that are a concern in your community. For any of these issues, there is always a sustainability link when analyzing solutions. And once you begin to understand the sustainability and health impacts of the materials and products you purchase, it becomes clear that to make strides towards reaching sustainability goals, supply chain and procurement must be top of mind.

“In fact, a healthcare organization’s biggest source of emissions that contribute to climate change is from the materials used to keep it running,” Davis noted. “Every product can and does contribute to climate change – this emissions type is referred to as embodied carbon.

“Embodied carbon emissions just from building material production make up at least 11% of humanity’s global greenhouse gas emissions,” he continued. “And it is estimated that for a new building constructed in 2020, 72% of its impact on climate change between now and 2030 will be from embodied carbon. Engaging with your supply chain and partnering with vendors to purchase low embodied carbon products, starting with building products, is an essential part of contributing to a stable and healthy climate for all of us.”

Andrew Knox, Manager, Environ­mentally Preferred Products, Premier, concurs about introspection as a starting point.

“This really depends on the state of sustainability efforts within each individual organization,” he noted. “For example, if a health system is early in its sustainability journey, sometimes coming forward and volunteering can be all that is required. There may be efforts already underway that are looking for allies/champions, and the supply chain plays a key role – either in leading the charge or lending important support. It may not be a case of gaining ownership as much as it is forming networks to achieve common aims. Overall, the most successful sustainability efforts include a cross-functional and enterprise-wide team inclusive of C-suite, clinicians as well as supply chain and operations leaders and teams. 

“Broadly, making the connections between sustainability and the overall mission to enhance health can help engender internal support,” he added. “Further, talking about sustainability publicly and highlighting your efforts can create a groundswell of support as well as enhance your organization’s reputation.”

While the pandemic may have changed thinking priorities, strategies and tactics in business, the sustainability issue remains consistent, according to Rob Chase, Founder & CEO, NewGen Surgical Inc.

“We live in a different world now than even just 24 months ago,” he said. “In the past Supply Chain has been focused on cost and finding the products at the best price. Now it has become clear that acquisition cost is not the only deciding factor but also how a product is made, where it is made, and the materials used are increasingly important to understand. Healthcare contributes 10% of the total U.S. CO₂ emissions.

“The United Nations has developed the ‘Sustainable Development Goals,’ which are a roadmap for society to become more sustainable,” Chase continued. “These goals can be a roadmap for healthcare as well [with] SDG 12 responsible consumption and production. Bring the C-suite into these conversations and discuss how your healthcare facility can be part of the solution to climate change, just through your purchasing decisions and integration of environmentally preferable products. Small changes in what you buy can have a huge cumulative impact in lowering your facility’s environmental footprint, and also stimulate demand in the market for suppliers to create more sustainable product solutions. In terms of ownership, we all need to take ownership in solving our industries and society’s problems. However, given the influential role of supply chain leaders, they are in a great position to create a positive impact and make a difference for us now and for future generations.”

Sweat the small stuff

A comprehensive, but granular perspective may be necessary for Supply Chain to make its case for sustainability leadership.

“Ownership and responsibility for managing sustainability must begin with a clear understanding of the choices and protocols that promote the best outcomes, encourage stewardship and assure sustainable use of medical devices and supplies,” said Richard Radford, CEO, Cenorin LLC. “The supply chain in healthcare is an immensely complex system that is influenced by many cost sources, market forces, inventory management methods, product types and by how products are used. Financial accounting should include the associated book-end costs related to inbound freight and waste disposal. Unfortunately, typical hospital cost analysis fails to include all direct, indirect and external costs related to utilizing a product for its natural life and then disposing of it correctly. Workflow processes and transit times that an individual product type may encounter are another under-recognized variable cost associated with its use.

“The most effective way to make a successful argument is to present the facts as they exist in the organization, which may not necessarily be apparent to those focused on solving a higher-level problem,” he continued. “In our experience, supply chain and inventory management accounting does not include all related costs in the analysis. In many cases these costs are siloed in different parts of the data collection or are not accounted for at all. It would seem to me that professionals in supply chain management could come together and develop a comprehensive list of cost sources that would lead to a more accurate and thorough understanding of absolute/total costs.”

Categorizing devices and products may offer significant benefits for sustainability efforts, according to Radford.

“It may also be useful to review medical devices by product type, material construction or professional classification, and to recommend processing techniques that might optimize full life use and minimize costs,” he advised. “For example, the costs associated with single-patient-use (SPU) and disposable devices is an extraordinary financial burden for healthcare providers. Twenty years ago, this was the basis for the FDA approving the use of third-party reprocessors. Their success has been remarkable in lowering hospital costs for many device types.”

But Radford acknowledges that third-party reprocessors are not the sole solution.

“Hospitals need to know that they can significantly reduce SPU device costs by applying new approaches that directly address specific medical devices with reprocessable component materials and appropriate reprocessing products and protocols. The cost-saving opportunity may be in the billions nationwide. Moreover, product and process solutions to address this opportunity are currently approved and available. These approaches are systematic and include a tried-and-true, integrated process to clean, high-level disinfect, and thoroughly dry the devices, along with electronic documentation for the entire process by individual device.”

Dan McGown, Northeast Coordinator, Mattress Recycling Council, indicates the C-suite concentrates on one key area.

“The C-suite is primarily focused on cost analysis,” he said. “If the sustainable alternative isn’t specifically a lower upfront cost, the Mattress Recycling Council would provide your facilities or housekeeping manager or your sustainability officer with information on how your institution can save money by recycling your old mattress. If you are located in California, Connecticut or Rhode Island there will be no disposal fee to get rid of your old mattresses. There is no cost to your institution. Put simply, its free.”

Healthcare needs to recognize its own footprint and impact on the environment, surmises Andy Marshall, CEO, Sterilis Solutions.

“Healthcare in the United States produces more than 5.9 million tons of biohazardous medical waste each year,” he said. “In addition to the tremendous amount of waste that healthcare spaces and laboratories produce, they also use 10 times more energy and four times more water than typical office spaces.

“Since Sterilis Solutions deals directly with hazardous medical waste disposal, we have some unique insights into the relationship between waste disposal and the environment,” Marshall continued. “Today, regulated medical waste is disposed of by medical waste hauling services that move the waste from the point of creation to designated disposal sites. There are clear operational benefits that come from ushering in sustainability efforts, as well as environmentally friendly outcomes.”

Sterilis works on a number of initiatives with My Green Lab. [Editor’s Note: See Sustainability project examples - https://hpnonline.com/21283854] Marshall cites from a My Green Lab study how segments of the healthcare industry contribute to the carbon footprint.

“The study finds that the global biotechnology and pharmaceutical industry alone has a carbon footprint larger than the semiconductor industry, the forestry and paper industry, and equal to nearly half the annual emissions of the United Kingdom,” he indicated. “A critical part of the solution will require companies to carefully quantify their emissions up and down their respective supply chains and leverage their purchasing power to motivate their suppliers and customers to reduce their own impacts.

“Building a culture of sustainability in healthcare will transform the industry for the better and help organizations carry out their lifesaving missions without damaging the environment,” Marshall continued. “It’s important to remember that the supply chain in healthcare organizations is usually at the forefront of the action and that their action, or inaction, can have a lasting impact on the industry.”

Environmental stewardship

Lars Thording, Vice President, Marketing & Public Affairs, Innovative Health, stresses the concept and importance of environmental stewardship that could emanate from Supply Chain.

“The role of the ‘environmental steward’ in U.S. hospitals is often parenthetical and somewhat isolated from the core operations of the hospital,” he said. “However, 71% of hospital emissions are Scope 3 emissions (emissions stemming from the supply chain), and the issue therefore should be a primary responsibility of the supply chain. Moreover, making the supply chain function responsible for environmental initiatives brings the topic right into the middle of the hospital’s core operations, and enforces a focus on accountability and results.” He cites a 2019 report from Health Care Without Harm found here: https://noharm-global.org/sites/default/files/documents-files/5961/HealthCaresClimate Footprint_092319.pdf.

“To gain support for this, I would recommend pointing out what the numbers say and reminding executive leadership that the environmental responsibility topic has become inescapable from a political, governmental and public opinion perspective,” Thording continued. “Hospitals that don’t make the environment a core initiative will have some explaining to do.”

Thording outlines a blueprint of action.

“Supply chain professionals should start by mapping out the environmental impact opportunities space specifically in terms of purchasing, demand environmental scorecards from vendors, set specific goals (packaging, reuse, preferential purchasing, etc.),” he said. “Engaging physicians and staff is a ripe opportunity for energizing this effort. A recent study published by the European Society of Cardiology found that physicians are highly motivated to reduce environmental impact. A total of 278 physicians from 42 hospitals were polled and 62% were motivated to work towards more sustainable solutions.” [Editor’s Note: Find the study here:  https://academic.oup.com/europace/article/24/Supplement_1/euac053.592/6589249.]

Still, Thording recognizes that healthcare organizations are trying to improve in this area, but that it may not be enough.

Most U.S. hospitals today are moving towards very dedicated sustainability strategies,” he acknowledged. “A common frustration is that only a fraction of the sustainability effort is about hospital operations – most pollution, waste, and environmentally harmful production are inherited from the suppler. In other words, a hospital can be 100% committed to sustainable practices, yet still end up a doing a lot of harm to the environment – because of what their vendors do. The problem here is that vendor evaluation and strategy is traditionally about price exclusively, and this needs to change. Our best partners are asking us to report on cost, resilience and sustainability. My recommendation is that environmental sustainability metrics are made part of not just the RFP process, but also value analysis assessments, preferred vendor programs, and periodical business reviews.”

“That is because the impacts to human health from climate change are vast,” she emphasized. “From increased cardiovascular and respiratory diseases caused by air pollution to water and food insecurity creating malnutrition, healthcare providers, suppliers and group purchasing organizations need to work together to solve the climate equation. After all, the healthcare industry works to ensure we’re not only healing patients but that we’re also contributing to the improvement of our communities’ health and ensuring the safety of future generations.

“A healthcare organization’s supply chain can take ownership of sustainability because it is the products and devices an organization purchases that bring in chemicals of concern and emit carbon from their transportation,” Indiveri continued. “Research demonstrates that 90% of healthcare organizations’ greenhouse gas emissions are generated in the upstream and downstream value chain, better known as the supply chain.” She cites from an EPA report found here: https://www.epa.gov/climateleadership/supply-chain-guidance.

“Supply chain must have a seat at the table of organizations focused on fighting the climate crisis,” she insisted. “But supply chain staff are not the only interested parties. Whether they are clinicians who conduct research in this area or analysts who evaluate the front- and back-end costs of climate change, find your champions. Sustainability can be overwhelming because it touches everything from anesthetic gases in the operating room to patient food.  Start with small wins that encourage improvements in people, planet and prosperity, such as removing toxic mercury from the supply chain or modifying printer settings to reduce waste and save money. Recognizing and celebrating wins that are necessary for human health, the environment and the bottom line are essential to building momentum and continuing this work to ensure healthy and safe communities.”