Purchasing should take into account the entire lifecycle of a piece of equipment—including how and when it will be disposed of. Biomeds should be part of the disposal conversation beginning with the purchasing process.
By C.A. Wolski
Purchasing should take into account the entire lifecycle of a piece of equipment—including how and when it will be disposed of. Biomeds should be part of the disposal conversation beginning with the purchasing process.
There’s one certainty facing every biomedical department. Today’s new, state-of-the-art equipment is destined to become tomorrow’s obsolete burden that will have to be disposed of. The question facing many healthcare enterprises is how to handle this disposal.
The days of thoughtlessly dropping non-hazardous medical equipment in landfills are over. There are other options from reselling to recycling to donation. Not exploring one of these options will leave money on the table for many healthcare organizations. These alternatives provide an opportunity to increase equipment ROI, limit the amount of stored equipment that needs to be tracked, and to demonstrate how the organization is a good corporate citizen by implementing a sustainable disposal program.
But whatever the disposition decision, it takes planning, and, ideally, involving the biomedical department even before an order is placed for the new asset. Unfortunately, many healthcare enterprises wait until they need to dispose of equipment to address their options. This may mean that the enterprise won’t be able to recoup any of its investment and/or be left with few or any options—other than a landfill.
With a bit of foresight and clear communication and cooperation between departments, disposition can result in numerous benefits for the enterprise inside and beyond its walls.
Options, Options, Options
Broadly there are five options for disposing of equipment:
- Throw it away.
- Recycle it.
- Resell it.
- Donate it.
- Trade it in to the OEM.
Jeff Dalton, CEO of reLink Medical, a company that specializes in the sustainable and safe removal and repurposing of out-of-service medical equipment, further elaborates on these options, saying effectiveness is tied to who is doing the disposing, with some of the options described as “not safe.”
“Healthcare enterprises can do it themselves—either throw away, sell, or repurpose the equipment,” he says. “They can just donate the equipment or attempt to use a local resource to dispose of it. Or they can use a proven sustainable solution that provides the highest returns and documented risk management.”
The one option that Dalton says is the least viable and the highest risk for healthcare organizations is throwing away or repurposing with the wrong company, he says, adding that this avenue, by analogy, is comparable to having your test equipment calibrated by a consumer electronics store.
Joel Anderson, medical program director for MATTER, a Minneapolis-based NGO, notes that disposing of equipment to other organizations not only keeps material out of landfills, but it also frees up expensive storage space, possibly even shrinking the overall storage footprint—saving the enterprise those costs.
“Hospitals storing old equipment ‘for later use’ in paid warehouse space can be a slow financial drip,” he says. “Analysis of equipment coming out of service should be evaluated not only on functionality but on feasible use within the hospital system. Warehouse storage costs can quickly outpace the FMV of certain types of equipment if it is stored more than a few months.”
While an argument could be made for redundancy or that this stored equipment could be used for parts or as a ‘backup,’ in the era of ongoing advancements in technology underpinned with planned obsolescence, it is doubtful that these stored pieces of equipment will ever be used again once they’re unplugged.
There certainly are opportunities today for healthcare enterprises to realize a return on investment for end-of-life equipment, but that takes planning, communication, and a change of mindset.
Planning Ahead
It’s not enough to find the right outlet. Healthcare entrprises must also figure lifecycle planning and risk management into the purchase equation. For example, Dalton notes that organizations typically “buy” a piece of equipment three times. The first is the purchase price, the second is the service contract, and the third consists of parts and other maintenance costs. “It’s not just the line item, but all the sub-line items you have to look at,” he says.
In most cases, healthcare enterprises aren’t designed to plan for equipment disposition; their expertise is patient care. This is where companies like reLink Medical come in. They can help healthcare organizations use data to develop disposition plans that work best for that enterprise—returning maximum ROI and risk mitigation at the end of the equipment’s useful (for that organization’s) life. First there needs to be a fundamental shift in the organization’s mindset, according to Dalton. “Our reLink 360 platform lives by the adage of moving organizations from reactive to proactive to predictive,” he says.
Reactive organizations are characterized by waiting until there’s an equipment crisis. They will have few options, and certainly will likely recoup very little of their investment. To become proactive, according to Dalton, organizations have to build disposition and risk management planning into their budgets—in other words, have a strong lifecycle planning process in place that is followed throughout the equipment’s use by the organization.
Organizations with a predictive mindset have a holistic approach to their equipment programs. For example, they take into account depreciation, risk management, and other financial factors with equipment uptime. “You need to integrate these factors—financial, risk management, and operational—and understand that the longer you hold onto a piece of equipment the less you’ll get back,” says Dalton.
For example, if a healthcare enterprise has a fleet of monitors that have reached the end of their lives for the organization or are scheduled to be cycled out based on the pre-determined replacement parameters—and are still in high demand in the market—there is an opportunity to recover a maximum return on the equipment.
However, timing is everything. Every month that an organization waits to cycle out its equipment will see that value tumble. This is not a decision that’s left to guesswork. It is informed by a host of datasets that can be used to determine the optimal moment to cycle that piece of equipment. For example, Dalton notes the reLink 360 platform provides the kind of actionable data that allows the organization to move to that predictive mindset.
Enter the Biomeds
Perhaps the biggest secret weapon that any organization has in making their disposal decisions is one they don’t often use—their on-staff biomeds. “There’s a tremendous disconnect on this point,” says Dalton. “HTMs need to be part of the capital planning and disposition process.”
Dalton notes that HTM professionals bring three key perspectives to the planning and disposition conversation:
- Can the department repair the device that’s being purchased?
- What are the expected repair costs—including parts, downtime, etc.?
- Could the value of the existing device cover the cost of the training for the device being purchased, compared to the new one?
Clear lines of communication need to be established during the planning process so stakeholders across the organization can make the most informed decision possible, including the end-of-life disposal of the equipment.
Implementing Best Practices
Planning is one thing; making sure that equipment is properly disposed of is another. Whether an organization decides to handle the disposal itself—which could be time consuming and costly—or hand it over to a third party, there are several key elements that need to be considered.
The equipment needs to be triaged. What value does it have? Can it be resold, and to whom (U.S. acute care, subacute care, aftermarket, or international market)? This can be a tricky determination—for example, Dalton estimates about 40% of the equipment his company handles is recycled for its components and valuable materials.
By comparison, with its ability to accept more equipment for functional use, the international market has a significantly lower amount of recycled equipment. For the MATTER 360 program the rate is only 5% with just 0.6% ending up in landfills, according to Anderson.
Once the equipment has been triaged then a new set of determinations need to be made. Does it need to be cleaned? Has all the identifying material—software, patient information, identification tags, etc.—been removed? Have all the proper documents been created and distributed to the finance department?
The complexity of the process points to the reason why healthcare enterprises may want to turn to organizations like reLink Medical. They can handle every aspect of the disposal process. But just because an organization says it can handle disposal, it may not be quite the right fit for the enterprise.
Dalton offers some tips to guide healthcare enterprises during the vetting process:
- Ask the supplier what types of equipment they don’t handle. Look for a provider that is holistic and not modality specific.
- Find out how the disposal vendor handles government compliance reporting.
- Ask how hazardous materials are handled—including both biologic and non-biologic material.
- What data will the vendor be providing the enterprise—including records of disposal, release of liability, and other records the healthcare enterprise’s finance department needs?
- Find out about the logistics of the pickup process. Who does the pickup? Is it the disposal company itself? Is it subcontracted? Is the healthcare organization responsible for loading the equipment? How often are pickups made?
And, of course, involving all stakeholders in the entire process is critical to ensuring that the disposal process is handled according to both federal compliance regulations and the enterprise’s own rules.
Avoiding the Landfill
No matter what avenue an organization takes to dispose of its equipment, in today’s sustainability-conscious business environment, avoiding the landfill is critical. It is not only a potentially untapped area of revenue that many organizations may be leaving on the table, but a way to do good for the environment and a way to demonstrate good corporate citizenship.
Anderson vividly notes how medical equipment that might not be suitable for the U.S. market, but is given a second life in Africa can make a real difference in patients’ overall health and their experience receiving care.
“End-of-life of medical equipment should be thought of in most cases as ‘end-of-U.S. life,’” he says. “This old equipment, while out of date with U.S. standards, is highly sought after and needed in most African countries. Take for instance a hospital maternity bed. After five years of use, it may be cycled out of the system. It may have a few patches on the mattress, scratches on the frame, and one of the control buttons may not work right. This equipment may be simply recycled for scrap or disposed of another way.
“Now juxtapose this situation with what a rural hospital in Liberia or Congo may have for a mother giving birth,” he continues. “Their birthing experience will most likely be on the floor, lying on cardboard. If a mom is fortunate enough, she may give birth on a spring bed with carboard as the mattress. This stark contrast can be seen with many types of medical equipment and medical supplies. A slightly expired catheter is better than no catheter. A 15-year-old infant warmer is better than a 100-watt bulb. Expired surgical gloves are better than bare-handed surgery.”
Whatever the reason, goal, or method a healthcare organization uses to make its disposal decisions, moving from a reactive posture to a proactive or predictive mindset takes a willingness to tap internal and external expertise and to plan for the device’s lifecycle holistically.
And chief among that predictive, holistic shift is involving HTM professionals every step of the way.
Los Angeles-based freelance writer C.A. Wolski is a regular contributor to 24×7. Questions and comments can be directed to chief editor Keri Forsythe-Stephens at [email protected].
