Regulated Medical Waste and the COVID-19 ImpactThe Coronavirus pandemic continues to affect the nation’s hospitals in almost every sourcing category.
Regulated Medical Waste and the COVID-19 Impact
Hospitals are operating differently now, and their demands have shifted to concentrate on certain products and services. We all know about the impact on purchasing of PPE and ventilators, but have you considered the downstream impact on the medical waste industry? What happens to all of that PPE once it has been used? It must be disposed of safely and properly. This is why hospitals have relied on specialized suppliers with the knowledge and infrastructure to perform this disposal properly.
Operational Impact & Guidelines
As a rule of thumb, Regulated Medical Waste should be around 10 percent of a hospital’s total waste stream. During this pandemic, hospitals have seen their RMW skyrocket to 40–45 percent of their total waste as hospital workers dispose of more materials and PPE as RMW (red bag) waste. However, much of this spike in RMW can be attributed to a general misunderstanding of how to safely dispose of materials that have been in contact with COVID-19 patients.
A report published by the Healthcare Waste Institute utilizing guidance from the CDC points out that “COVID-19 virus is not a Category A infectious substance (as per DOT/CDC listing; considered a Category B infectious substance which when discarded is considered regulated medical waste).” This is due to a key component of how COVID-19 is transmitted. COVID-19 is transmitted via “sustained human-to-human transmission,” so lightly soiled PPE materials are not likely to be a means of virus transmission.
The Healthcare Waste Institute’s report provides guidance on how to handle COVID-19 contaminated waste. A couple of key guidelines:
- “Only grossly contaminated PPE should be placed into red bags. Patient trash such as used tissues may be disposed of into regular trash (municipal solid waste) unless otherwise directed by your local health department.”
- “Although not required, HWI recommends that COVID-19 waste be identified in order to protect their workers in the event a bag needs to be opened for some reason. Be aware that healthcare waste companies may adopt special provisions specific for their companies and the safety of their employees during this time. It is best to check in frequently with your waste handling company during this time.”
There will undoubtedly be financial impacts caused by the spike in utilization of RMW services. However, these impacts may be softened by the pricing strategy utilized in recent years by Stericycle, the primary supplier in this category. Over the past several years, Stericycle has been converting clients over to the Integrated Waste Stream model. In essence, the Integrated Waste Stream model is a fixed monthly cost that does not fluctuate based on utilization.
Let’s look at the economics.
The Integrated Waste Stream model enables Stericycle to more accurately predict future revenues because their clients’ pricing is fixed rather than utilization-based. It also allows the hospitals to more accurately forecast future spend for RMW. This seems like a great deal and is much like the strategy the utility companies have been promoting for electricity service in peoples’ homes. However, at TractManager, we have analyzed many contracts utilizing this model, and we found that the monthly costs paid by hospitals under this model commonly exceeded what they would have spent if they were paying fair utilization-based prices. In some cases, the actual costs paid were higher by 15–20 percent.
However, though margins tend to inflate, there is still some risk to Stericycle when it charges a fixed monthly price. The risk can rise to the surface when something causes a dramatic spike in utilization, such as COVID-19. Although it is difficult to predict how Stericycle will respond from a pricing perspective, it is safe to assume that the company will attempt to increase client costs upon contract renewal to recover from the strain caused by COVID-19. This is similar to an insurance company attempting to raise premiums whenever a claim is made on a policy. When that happens, hospitals should be prepared to stand firm. It would also be wise to perform a retroactive analysis to see how much Stericycle was able to increase its margins prior to COVID-19.
As discussed above, there is no evidence to support the idea that disposed materials that have been in contact with COVID-19 patients will have a different environmental impact long-term than the same materials have always had. The primary area of concern is simply the volume of waste that is being generated as a result of COVID-19. We should keep in mind that it is not only healthcare facilities that are utilizing and disposing of PPE, but a similar trend is occurring in homes across the country.
Healthcare workers and all Americans have a responsibility to be environmentally conscious in order to lessen the environmental impact of the vast amount of additional medical waste being generated. This is especially important now. A few general guidelines:
- Utilize multiple-use materials rather than single-use whenever possible.
- Be wary of utilization and re-use PPE whenever possible and safe.
- Consider PPE reprocessing strategies.
- Ensure that the types of PPE utilized are appropriate given the risk level.
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