CIRCULAR HOSPITALS: 
REDUCING COSTS BY one BILLION € PER YEAR THROUGH THE CIRCULAR ECONOMY

This article was originally published in Actu-Environnement .

While many sectors have managed to optimize their production resources, this is not yet the case for hospitals. Medical equipment, such as scanners or MRIs, remains unused on average 58% of the time. While their acquisition and installation costs are often very high, their operating life is relatively short. Hospitals often replace equipment in good condition to benefit from the latest technological innovations or higher technical packages. Technical packages, billed for each procedure and reimbursed by social security, are in fact reduced by 30% for MRIs and scanners more than 7 years old. This inefficient use of equipment is even worrying manufacturers like GE, which recently published a study entitled ”  Out of Control: How Equipment Proliferation and Low Use Affect Hospital Budgets . “

Yet, by relying on the principles of the circular economy, some hospitals and equipment manufacturers are demonstrating that it is possible to use medical equipment much more efficiently.

USE EQUIPMENT MORE EFFICIENTLY

To extend the lifespan of their equipment, major manufacturers such as GE, Siemens, and Toshiba are marketing remanufactured, or completely refurbished, devices. North American hospitals alone purchase half of these devices, thus achieving significant savings. A refurbished device costs 20% to 30% less than a new device with identical functionality. Philips’ recent inauguration of a refurbishment plant for its medical systems in the Netherlands may contribute to increasing demand for remanufactured equipment in Europe. Some manufacturers also offer hospitals services to extend the lifespan of their equipment. For a fixed monthly fee, Philips manages the purchase, maintenance, and upgrade of all equipment at Karolinska University Hospital in Stockholm. It is also likely that, in the short term, manufacturers will no longer sell their equipment to hospitals, but rather its usage, with  “pay per scan” offers .

In the United States, to improve equipment utilization rates, the startup Cohealo is proposing to leverage the sharing economy. The Boston-based company has set up a collaborative platform where hospitals can share the use of their equipment.

According to a study by the Ellen MacArthur Foundation conducted for the Danish government, Danish hospitals could save between €70 million and €90 million annually starting in 2035 by managing their equipment more efficiently. Scaled up to France, the savings would amount to €1 billion.

REDUCE AND RECYCLE WASTE

The circular economy also offers solutions to reduce and recycle hospital waste.

French hospitals produce 700,000 tons of waste per year, or nearly 3.5% of the national production. Single-use medical devices, which have gradually replaced reusable medical devices, are one of the sources of this significant waste. In France, once used, a single-use medical device, which can cost several thousand euros, is incinerated. Its reuse after sterilization is prohibited. However, it is authorized, and carried out under certain conditions, in other countries such as Germany and the United States. A study by the Commonwealth Fund estimates that generalizing the reuse of medical devices to all hospitals in the United States would save half a billion euros annually.

Faced with increasing healthcare spending and tightening public budgets, the hospital sector must adopt the circular economy without further delay.