How to move towards a circular economy (CE) is the topic of the moment, and various sectors are working out how to take this from concept to reality.
The financial strain that the healthcare sector is facing could be the driver that pushes it towards more CE models, such as sharing platforms and being more effective with resources.
As Alexandra Hammond, associate director for sustainability at Essentia, Guy’s and St Thomas’ NHS Foundation, says: “We need to find a way for healthcare decision-makers to make long-term decisions in the face of severe budget constraints. It’s a tough challenge, but one that will allow the CE to take hold in healthcare. It’s got to be about saving money to get their attention.”
Lieke van Kerkhoven, business development manager at sharing marketplace FLOOW2 Healthcare, based in Luxembourg, agrees. She says: “Decision-makers within organisations have to have a long-term vision. Saving, or making, money is definitely an attention grabber.”
US-based technology company Cohealo, which helps health systems to share medical equipment across facilities, has a similar view. Chief executive Brett Reed explains that CE business models are “so important because healthcare systems are so challenged, both financially and clinically.
“Doing more with less is an important maxim. Technology and innovative ideas, such as leveraging the sharing economy business model, allows health systems to focus on what is really important: patients and their care, not outdated or inefficient business practices.”
Cohealo helps hospitals to share their under-utilised medical equipment through its technology platform. Reed explains: “Traditional notions of ownership have been a barrier for traditional health organisations. The innovators are focusing more on the benefits of access versus having one of everything sitting unused.”
The company has facilitated the sharing of equipment such as navigation systems, ultrasound machines, speciality surgery tables, surgical lasers, beds, drills and other instruments. It works with the health sector to determine what they want to share and gives them tools to determine what makes the most sense to share.
Motivation for setting up Cohealo came about after Reed observed the inefficiency that occurs in the health sector first hand: “One hospital had purchased a piece of surgical equipment and used it sparingly. A sister facility of the same health organisation about 30 miles away wanted access to the same technology, but did not have the capital or patient volume to justify the purchase. It was either renting at a costly rate or not doing the procedures at all.”
Van Kerkhoven admits that organisations are often reluctant to share their assets at first, but adds: “With the sharing economy [increasing] for consumers, we see that people are getting more used to the concept of access over ownership, and they will eventually start opening up to the idea they can actually do this in a professional setting as well.”
But while CE models and the sharing of assets and unwanted resources seems to make perfect sense, getting hospitals and health organisations on-board can be a different matter. Daniel O’Connor is chief executive of Warp It, a reuse network that allows organisations to give away or loan office furniture, equipment and other resources.
He explains: “It is a long, hard journey which takes time, patience, persistence and to have the ear of innovators. I would say there are 10-15% of managers who are willing to go for an innovative but credible platform. They then need to persuade their boards of committees. Boards and committees do not take risks – they need hard facts and figures. Some are more open to persuasion by the ‘internal innovator’ than others.”
O’Connor adds that Warp It is finding it much easier now than two years ago: “I think we are not far off the point in the UK where having an effective sharing platform internally is the norm.”
Cohealo is finding similar dynamics in the US. Reed explains: “Health systems do not respond to innovation for the sake of innovation, but if you can show them the path to [millions of dollars] in cost savings, you will generally get an audience.”
According to Hammond, much of the investment made in the NHS needs to have immediate and measurable benefit. She believes that change is also needed in the way it thinks about procuring goods and services: “There needs to be more awareness among procurement teams and key decision-makers that value can be driven through alternative models.”
Market research by Philips Healthcare in the UK, with Axion Consulting and the support of Innovate UK, asked more than 100 stakeholders, including NHS members, whether they were willing to explore the possibility of using refurbished systems and new business models. It had responses from more than 50, and around 30 showed an interest in exploring such options.
Philips Healthcare is also running a project with Delft University in the Netherlands looking at the design rules of the product platform for its next generation of interventional x-ray devices, and considering factors such as life cycle management, modularity, compatibility, serviceability, configuration, reusability, compliance and regulation.
Hammond leads the sustainability programme at Guy’s and St Thomas’, and explains that it has a waste bill of around £1m a year, “even with all the great stuff we do to reuse materials and close waste loops”. Its initiatives include leasing rather than owning its IT estate, having a furniture-sharing scheme across its sites and an on-site workshop for minor repairs, and procurement training to get CE principles into more tenders.
Organisations such as Warp It are starting to prove that embracing CE principles can deliver some impressive savings. Glasgow & Clyde NHS, for example, which is going through a major building move, is saving more than £15,000 a month in avoided procurement by better sharing of resources. And Warp It has helped other NHS trusts save £517,000 in two years by sharing resources and medical equipment. The organisation has set itself a goal of supporting its NHS clients in saving £1m this year and reduce waste arisings by 100 tonnes.
O’Connor believes that the biggest easy win for the healthcare sector is at the procurement stage, where leasing can start to be specified, particularly for high-value, low-usage equipment. Another is office furniture and stationery, which can be donated elsewhere to avoid wastage.
He has found the biggest barrier to change has been the necessary shift in mind-set away from the view that ‘we have always done it this way’. Hammond agrees that the barriers are around behaviours.
She adds: “No expenditure is being signed off by our relatively financially strong trust without measurable benefits. This is an opportunity as well as a challenge – the hospital is looking at different ways of working in a way that it wasn’t open to when finances were stronger.
“This is a great opportunity for new models to take hold.”