The Healthcare Hub

How to Achieve Sustainable Healthcare Supply Chain Management

Thursday, February 29, 2024

While the primary goal of health systems and hospitals is to heal patients, healthcare organizations do much to harm the environment. The many components that go into care delivery (e.g., buildings/infrastructure, equipment/instruments/supplies, logistics/transportation) result in substantial energy consumption, greenhouse gas emissions, and waste.

The healthcare supply chain, with its production, procurement, transport, and management of goods, plays a significant part in environmental damage and social injustices. Conversely, sustainable healthcare supply chain management practices reduce these negative impacts. Healthcare supply chain sustainability can also cut costs associated with waste.

 

 

Table of Contents

  1. What is sustainable healthcare supply chain management?
  2. The benefits of a sustainable healthcare supply chain
  3. Implementing sustainable supply chain practices in healthcare
  4. Examples of sustainability in healthcare supply

 

 

What is sustainable healthcare supply chain management?

 

Sustainable healthcare supply chain management seeks to balance the delivery of medical supplies and services with environmental, social, and economic sustainability. It involves stakeholders across the spectrum—from suppliers of raw materials to healthcare providers—addressing challenges such as material shortages, environmental impacts, and ethical labor practices. This approach not only ensures the efficient provision of healthcare but also emphasizes the importance of a sustainable global community and environment.

 

Key components

The healthcare supply chain spans many stakeholders both inside and outside of healthcare organizations - raw materials suppliers, finished product suppliers, distributors, health system and hospital supply chain teams, clinicians – all who play a role in ensuring the availability of equipment and supplies available for patients.

There are numerous components along the chain where these stakeholders can act to improve healthcare supply chain sustainability.

 

Raw materials

Ongoing supply shortages have shined the light on the raw materials and components used to manufacturer equipment and products used in healthcare delivery, not only the availability of these materials but their environmental and social impacts on healthcare supply chain sustainability.  

For instance, mining of 3TG minerals (tin, tungsten, tantalum and gold) used in the manufacture of medical devices and supplies produces greenhouse gas emissions, contributes to soil erosion, can contaminate local water sources, among other environmental impacts.[1] Additionally, 3TG minerals are referred to as “conflict minerals” because their mining and trade have funded armed groups in the Democratic Republic of Congo and adjoining countries.[2]

 

Product design

The benefits and drawbacks of reusable versus disposable supplies used throughout healthcare delivery is hotly debated when it comes to sustainable healthcare supply chain management. Single use supplies are often seen as supporting infection control and prevention practices, but their disposal generates waste and costs. It is estimated that 80% of the healthcare industry’s carbon footprint is a result of the production, transportation, use, and disposal of the single-use medical supply chain.[3]

While reusable supplies can cut down on costs and waste, those that require reprocessing consume resources such as energy, water and labor. Their reprocessing can also involve the use of harmful chemicals with environmental and human health impacts. For example, “ethylene oxide (EtO), a chemical used to sterilize half of all medical devices in the U.S.,” can also cause an increased risk of various cancers.[4]

 

Product production and packaging

Medical equipment and product suppliers consume natural resources and generate greenhouse emissions and waste in their production of these items. More than 70% of healthcare emissions are generated in the supply chain, including the manufacture and disposal of medical devices and pharmaceuticals.[5]

Investigations have also uncovered the use of forced labor in medical product manufacturing.[6] For example, the U.S. banned import of disposable gloves from a manufacturer in Malaysia after finding evidence of “abuse of vulnerability, deception, retention of identity documents, intimidation and threats, debt bondage, abusive working and living conditions, and excessive overtime” among its employees.[7]

Excessive product packaging and the use of non-recyclable packaging materials for healthcare products is another challenge to sustainable healthcare supply chain management. Traditional plastics used in product packaging “are not biodegradable and their use causes pollution through both landfill contribution and microplastics contamination.”[8]

 

Transportation and logistics

While the COVID-19 pandemic spurred efforts to source healthcare supplies closer to home, U.S. healthcare organizations still rely heavily on products manufactured abroad. In the case of N-95 respirators and surgical masks, pandemic-driven domestic production has waned.

The Wall Street Journal reports, “about 70% of the 100 or so U.S. mask companies launched during the pandemic have closed, according to industry estimates. U.S. production of N95 and surgical masks fell by more than 90% in 2023 from 2021 levels after elimination of masking requirements knocked out consumer demand.”[9]

While the price of foreign healthcare supplies is often lower than those manufactured in the U.S., the environmental costs are high from a logistics perspective. Maritime shipping causes about 3% of global greenhouse gas emissions.[10]

 

Hospital inventory waste

Hospitals produce more than 5 million tons of waste each year.[11] Poor inventory management practices contribute to the volume of supplies that are wasted. Lack of visibility into inventory can result in over ordering and the need to discard items that have expired before they can be used. Case in point, an inventory count at a 2,000-bed health system uncovered dozens of expired items that amounted to nearly $200,000 worth of inventory.[12]

 

The benefits of a sustainable healthcare supply chain

A sustainable healthcare supply chain offers multifaceted benefits—environmental conservation, social responsibility, improved population health, economic savings, and enhanced reputation—demonstrating its critical role in advancing both healthcare efficiency and society at large.

  • Environmental: Healthcare supply chain sustainability lessens the industry’s negative impact on the environment.

  • Social: Insights into supply sources and manufacturing practices can aid a healthcare organization is procuring only from suppliers that engage in socially responsible practices.

  • Population health: The environment impacts everyone’s health. Pollution contributes to chronic health conditions, such as respiratory disorders, that impact human lives and increase healthcare costs. Protecting the environment through fewer emissions and less waste ultimately benefits population health, including the health and wellbeing of individuals in healthcare organizations’ communities.

  • Economic: Excessive energy usage and high volumes of waste (e.g., supplies, packaging) generate additional costs for healthcare organizations already struggling to stay financially afloat. Conserving resources and limiting the items and materials that enter the waste stream can generate significant savings. For example, one health system’s use of a sterilization wrap (aka blue wrap) recycling program yielded $31,680.00 in cost avoidance during an 8-week pilot program.[13]

  • Reputation: Programs such as The Joint Commission’s (TJC) Sustainable Healthcare Certification program for U.S. hospitals and critical access hospitals, are shining the light on healthcare organizations that engage in sustainable practices. Demonstrated commitment to ESG initiatives can help an organization differentiate itself from other providers in its local community. 

 

 

Implementing sustainable supply chain practices in healthcare

Sustainable healthcare supply chain management is attainable. Here are 3 steps health systems and hospitals can take to work toward their healthcare supply chain sustainability goals.

 

1. Identify sustainable suppliers (and how to identify them)

From raw materials to logistics, suppliers can have a major impact on the environment. As health systems and hospitals prioritize sustainable healthcare supply chain management practices, they increasingly demand evidence that their suppliers prioritize it as well.

Here are 5 key areas to examine when assessing a medical/surgical supplier’s commitment to healthcare supply chain sustainability:

  1. Raw materials and components: To enhance supply continuity and ensure they can meet the demands of healthcare organizations, many suppliers are more closely examining and monitoring their raw material/component sources. With greater visibility upstream in the supply chain, suppliers can act quickly to avoid disruptions downstream. In the spirit of greater supply chain transparency, some may be willing to share with their finished product customers information on where they source their raw materials or components. These insights can help healthcare organizations determine if these sources are sustainable and/or socially responsible.

  2. Product design: An increasing number of suppliers are designing their products with sustainability in mind. For suppliers of medical equipment that consume resources (e.g., electricity), look for those that have resource saving designs. For reusable items that must be reprocessed (e.g., surgical instruments and devices), prioritize those that require the least harmful reprocessing methods (e.g., steam versus EtO sterilization). For medical/surgical supplies and devices used in care delivery – from commodity to physician preference items – look for those that feature recycled materials or can be re-used or recycled. For supplies that must be discarded and enter the waste stream, choose those that are constructed from less harmful materials (e.g. biodegradable).  

  3. Product production: The medical/surgical supply manufacturing process inherently uses natural resources and generates byproducts that can harm the environment (e.g., emissions, waste). To move the needle on their own sustainability initiatives and goals and meet customer demand for sustainable healthcare supply chain management, more suppliers are taking steps to lessen their environment impact during production. Many public medical/surgical companies are now publishing their ESG achievements in their annual reports, which providers can often access online.

  4. Product packaging: Plastic product packaging and excessive use of any packaging materials is another area suppliers are targeting to improve healthcare supply chain sustainability. Look for those suppliers that have transitioned or are transitioning to biodegradable packaging materials and less packaging waste. This will have a direct impact on the healthcare organizations’ own sustainability initiatives because as the receivers of products it is their responsibility to discard the packaging surrounding them.

  5. Transportation and logistics: The ships, planes and trucks that carry finished supplies from manufacturers to healthcare organizations generate harmful emissions. While one solution is to source from suppliers that are closer to home – onshore/nearshore to the U.S. – and therefore have a shorter logistics journey, for some supplies this approach isn’t always possible. In those cases, seek out suppliers dedicated to supply chain efficiency. Perhaps they have mapped their logistics and engaged in efforts to reduce transportation steps. More progressive suppliers have incorporated into their fleets transport modalities that generate lower emissions, such as electric or hybrid vehicles.

💡 There are a growing number of resources health systems and hospitals can use to identify sustainable suppliers. One is the Sustainable Procurement Index for Health, which provides a consistent and transparent way for assessing the key sustainability credentials of a supplier.[13]

 

2. Direct Purchasing to Sustainable Sources

Even when a healthcare system has contracted with suppliers dedicated to healthcare supply chain sustainability, those making procurement decisions might not be aware of sustainable sources when purchasing items.

To drive sustainable procurement, health systems and hospitals can leverage directed buying through the GHX Marketplace solution. At its core, directed buying aims to simplify the procurement process for every requisitioner, ensuring they make informed decisions by acquiring the appropriate item from the correct source at the right cost. In this case of organizations with a commitment to sustainable sourcing, the GHX Marketplace solution can direct buyers to sustainable and/or socially responsible suppliers.

The healthcare organization can use GHX Marketplace intelligence to tag and prioritize suppliers and products based on their ESG category (e.g., environmental sustainability, diverse suppliers). This ensures that when users search for specific items, those aligning with the organization's goals in terms of ESG considerations will receive higher visibility and ranking in search results.

An additional strategy to steer purchasing towards preferred suppliers and products involves visually labeling them according to their ESG properties. By simply informing GHX Marketplace users about environmentally and socially responsible options, many individuals tend to self-select these items due to their commitment to making ethically sound choices.

 

3. Manage supplies for sustainability

Once supplies are received and stored within a healthcare facility, sustainable healthcare supply chain management is in the hands of the organization’s stakeholders – from supply chain personnel to clinicians.

Visibility to supply inventory is critical to preventing supply waste. When a supply chain team has real-time access to where individual items are stored, they can take steps to optimize their usage. For example, they can see when one department has an excess of a particular item and shift that inventory to a department that needs it.

Inventory visibility is critical to expiry management. Therefore, supply chain teams should take steps to ensure expiry dates are closely tracked as part of their inventory management processes. The ability to identify supplies approaching expiry and prioritize their usage can reduce the number of items that must be discarded into healthcare waste streams.

 

 

Examples of sustainability in healthcare supply

 

Innovative sustainability efforts in healthcare supply, such as redesigning packaging for efficiency, managing product expiry to reduce waste, recycling plastics in medical facilities, and cutting greenhouse gas emissions, underscore the industry's commitment to environmental stewardship and operational excellence.

 

Sustainable packaging

Medline’s Sustainable Packaging Lab is dedicated to envisioning packaging innovations for a more sustainable future. For example, multidisciplinary lab team has redesigned cold chain packaging to incorporate 100% recycled and recyclable content. Additionally, Medline's Dynacor division redesigned its packaging for rectangular washbasins from two stacks of 25 to a more efficient single stack of 50. This change not only increased efficiency but also resulted in an annual reduction of packaging raw material by 417,000 pounds.[15]

 

Product expiry management

Wesley Medical Center’s endoscopy department performs 400 to 500 procedures each month. The facility does not have time, bandwidth, or budget to allow for expired endoscopy supplies, or to carry nearly $200,000 worth of endoscopy inventory at any given time to avoid supply shortages. Working with its supplier Boston Scientific, the Wesley Medical Center endoscopy department team decreased the total number of orders and reduced inventory on hand from roughly $180,000 to $120,000 by consolidating its ordering processes and inventory tracking.[16]

 

Plastics recycling

The Ohio State University (OSU) Wexner Medical Center successfully diverted 50 tons of plastic annually by transitioning to reusable sharps containers for items like needles, syringes, and fingerstick devices used for blood collection. The contents of the new containers are safely disposed of through a vendor, then the containers are cleaned and put back in circulation. Each container can be used up to 600 times.[17]

 

Greenhouse gas emissions

Through its efforts to reduce energy consumption and transition to clean energy sources to reduce air pollution in the community, Ascension achieved an overall 5% reduction in greenhouse gas emissions at the end of FY23 from its FY20 baseline, including a 9.4% reduction from acute care facilities.[18]

 

 

FAQs about healthcare supply chain sustainability

 

Q. How do healthcare supply chains measure and report their sustainability progress?

A. In the case of directed buying, start by identifying the specific ESG factors your healthcare organization aims to influence through targeted purchasing. Next, establish a baseline and define a meaningful target for improvement. Determine what percentage of your organization's supply spend aligns with ESG goals (5%, 10%, or 20%). To ensure measurable progress, implement a tracking mechanism that monitors advancements toward the ESG purchasing volume target and facilitates impact reporting.

Q. What role does technology play in sustainable healthcare supply chains?

A. Technology not only improves supply chain efficiency, but it can also play a central role in supporting sustainable healthcare supply chain management practices. Automated, digital procurement processes capture data that can be used for analytics to guide more sustainable procurement practices.

Additionally, automated inventory management processes provide enhanced supply visibility, enabling a supply chain team to shift supplies where they are most needed to avoid expiry waste. The data generated from digital procurement and inventory management processes can also be used for forecasting and planning to avoid overstocking items.

Q. What are common challenges in achieving sustainability in healthcare supply chains?

A. Cost is always a challenge in healthcare. While a health system or hospital might want to “do the right thing” when it comes to reducing its environmental footprint or focus spend on socially responsible sources, it can be hard to justify allocation of resources to these efforts. Identifying ESG efforts that reduce costs or generate savings is one way to get leadership on board. For example, the switch from disposable to reusable items could cut down on purchasing and disposal costs while reducing the amount of waste generated by the healthcare organization.

 

 

Disclaimer: The third-party contributor of this piece is solely responsible for its content and accuracy, and the views expressed do not necessarily reflect the opinion of GHX.

 

 

Sources

  1. Responsible Minerals Assurance Process, Responsible Minerals Initiative, June 2021, https://www.responsiblemineralsinitiative.org/media/docs/standards/RMI_RMAP%20ESG%20Standard%20for%20Mineral%20Supply%20Chains_June32021_FINAL.pdf
  2. Position on Conflict Minerals, Johnson & Johnson, https://www.jnj.com/about-jnj/policies-and-positions/our-position-on-conflict-minerals
  3. Medical Industry Can Reduce Its Carbon Footprint by Relying Less on Single-use Supplies, Lancet Commentary, Johns Hopkins, February 2023, https://publichealth.jhu.edu/2023/medical-industry-can-reduce-its-carbon-footprint-by-relying-less-on-single-use-supplies-lancet-commentary
  4. FDA Highlights EtO Transition Challenges During Device Sterilization Town Hall, FDA News, January 11, 2024, https://www.fdanews.com/articles/213106-fda-highlights-eto-transition-challenges-during-device-sterilization-town-hall
  5. Environmental Sustainability: Healthcare and Medical Devices, Greenbook, September 23, 2021, https://www.greenbook.org/insights/environmental-sustainability-healthcare-and-medical-devices
  6. Global Spotlight on Labor Trafficking in Health Care and Corporate Supply Chains, Jones Day, October 2022, https://www.jonesday.com/en/insights/2022/10/global-spotlight-on-labor-trafficking-in-health-care-and-corporate-supply-chains
  7. US bans imports of disposable gloves from Ansell supplier in Malaysia over allegations of forced labour, The Guardian, February 1, 2022, https://www.theguardian.com/global-development/2022/feb/01/us-bans-imports-of-disposable-gloves-from-ansell-supplier-in-malaysia-over-allegations-of-forced-labour
  8. Five ways to achieve sustainable medical packaging, American Chemical Society, June 2, 2023, https://www.cas.org/resources/cas-insights/sustainability/five-ways-achieve-sustainable-medical-packaging
  9. Domestic Production of Masks Fades, Healthcare Purchasing News, February 6, 2024, https://www.hpnonline.com/sourcing-logistics/news/53095831/domestic-production-of-masks-fades
  10. Maritime shipping causes more greenhouse gases than airlines, Yale Climate Connections, August 2, 2021, https://yaleclimateconnections.org/2021/08/maritime-shipping-causes-more-greenhouse-gases-than-airlines/
  11. Waste, Practice Greenhealth, https://practicegreenhealth.org/topics/waste/waste-0
  12. Discovering Nearly $200K Worth of Expired Products at One Hospital, GHX, March 4, 2020, https://www.ghx.com/the-healthcare-hub/the-inventory-diaries-pt-1-discovering-nearly-200k-worth-of-expired-products-at-one-hospital/
  13. Babu, Maya A MD, MBA; Dalenberg, Angela K BS; Goodsell, Glen; Holloway, Amanda B MS; Belau, Marcia M APRN, CRNA; Link, Michael J MD. Greening the Operating Room: Results of a Scalable Initiative to Reduce Waste and Recover Supply Costs. Neurosurgery 85(3):p 432-437, September 2019. | DOI: 10.1093/neuros/nyy275, https://journals.lww.com/neurosurgery/abstract/2019/09000/greening_the_operating_room__results_of_a_scalable.17.aspx
  14. Sustainable Procurement Index for Health, Healthcare Without Harm, https://noharm-global.org/content/global/sustainable-procurement-index-health
  15. Sustainability in healthcare: Solutions for reducing waste, Medline, November 2023, https://www.medline.com/strategies/supply-chain/sustainability-healthcare-reduce-waste/
  16. Improving Inventory Management Yields More Than Bottom Line Results, Boston Scientific, https://www.bostonscientific.com/en-US/medical-specialties/gastroenterology/asc-solutions/inventory-management-article.html
  17. Hospitals take creative steps to reduce carbon footprint, AAMC, July 28, 2022, https://www.aamc.org/news/hospitals-take-creative-steps-reduce-carbon-footprint
  18. Environmental Impact & Sustainability, Ascension, 2023, https://about.ascension.org/-/media/project/ascension/about/section-about/community-impact/environmental/ascensionenvironmentalstewardshipprogramreport.pdf
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Kara L. Nadeau

Healthcare Industry Contributor