My stethoscope is more than half my age and every year it gets proportionally closer to my age. It doesn’t have an expiration date and works just fine. In fact, not everything in medicine has a short expiration date or is consumable. Despite that, the traditional economy of healthcare is largely disposable. Healthcare materials are taken from nature and used to produce products, which are then consumed or used and thrown away.
Circular economy strategies are gaining traction in healthcare.
This year’s economic forum in Davos proposed an alternate reality called the circular economy. What makes an economy circular is that it aims to keep products, components, and materials at their highest utility and value at all times – not just recycled, often too early, to a lesser value product. Extension of the lifetime of a product involves either improving product durability through better design or prolonging product lifetime while it is in use and remains functional.
Circular economy strategies are gaining traction in healthcare because there are both strong financial and ecological incentives to transition from the current “take, make, waste” model. The cost of buying new equipment annually has increased by more than five percent over the last 20 years. Between 15 % and 25 % of the total healthcare waste contains radiological, biological or chemical hazards of which only 14% of plastics packaging material goes through recycle attempts, and only two percent gets reused in the same application. Out of the rest, four percent gets lost in the recycle process and eight percent finds use in lower-grade applications.
It is not always necessary to have the newest equipment.
A vendor focus on selling service instead of products is the basis of the circular economy model. Philips Healthcare, for example, operates a Multi-Vendor Services team for highly capital intensive equipment such as magnetic resonance machines, which usually have a lifetime of around a decade. The team refurbishes and resells pre-owned equipment.
Other companies use lending, renting or leasing arrangements (popular in providing equipment and hospital clothing to poorer nations), usage and subscription fees (the backbone of the medical publishing) or brokerage fees (the currency of health insurers).
Of course, everything – even my stethoscope – eventually has a use-by date. Lifetime extension is not just about prolonging a product’s utility for as long as possible but also recycling it when it has reached its end of life.