The Cost of Hospital Waste
Each year, the US healthcare system wastes $765 billion according to a 2012 National Academy of Medicine study. According to the same study, that total eclipses the annual budget of the Defense Department and the amount could be used to cover the insurance coverage of 150 million American workers.
While the numbers are staggering, there are some non-profits trying to turn this big lemon into a little lemonade. Organizations such as Partners for World Health are gathering unused or discarded medical supplies and sending them to hospitals overseas that can still use the equipment. As this article by Marshall Allen at ProPublica explains:
“[Partners for World Health founder Elizabeth] McLellan is sensitive about the built-in tension of her mission. The hospitals are casting off useful supplies that would otherwise be sent to a landfill. But they are also donating items that are desperately needed in the developing world. “They are trying to be good stewards in our community and in their world,” she said.
On the flip side, she can’t look past the waste. She said she could fill 15 shipping containers now if she had the $25,000 it cost to send each one overseas.
Hospital officials either declined to comment or, sometimes sheepishly, said some of the waste was unavoidable. Elton Cole, the supply chain manager at Stephens Memorial Hospital in western Maine, said some items, such as a torn exam table, must be replaced to meet infection control guidelines. Same goes for those supplies left in patient rooms. At Stephens, he said, the supplies in the room, such as bandages or gloves, are typically included in the room charge and not billed directly to patients.
Health care finance experts say while patients might not see the cost in their bills, the wasted supplies boost a hospital’s overhead, which in turn makes everyone’s costs higher.
The waste “contributes a lot to the cost of health care,” Cole said. “It’s pretty phenomenal the tons of product we’re shipping out to Elizabeth’s group.”
Read the entire article here: What Hospitals Waste
There’s no argument that the American healthcare system is extremely wasteful compared to other industries. As hospitals work through their waste problems and focus on becoming more lean, a great place to start would be their surgical areas.
Lack of standardized systems and processes around supply management lead to oversupply issues. Hospitals overstock inventory by millions of dollars, and throw away a lot of expired inventory as a byproduct. Hospitals can help remedy these issues via automation and data analytics. Getting a handle on this waste will go a long way to helping hospitals reduce their waste, decrease patient bills and improve their bottom line.