DELIVERING THE CIRCULAR ECONOMY A TOOLKIT FOR POLICYMAKERS

140 • DELIVERING THE CIRCULAR ECONOMY – A TOOLKIT FOR POLICYMAKERS
3.6 Hospitals
Hospitals constitute a large, public service in Denmark and as such procure
and consume large amounts of resources. The two key circular economy
opportunities identified are to adopt performance models in procurement,
and to become leaders in recycling and waste reduction. Modelling suggests
that performance models in procurement could save hospitals EUR 70-90
million by 2035. With a systematic effort Danish hospitals could become
leaders in recycling and minimisation of avoidable waste. For these
opportunities to be realised, it is important that necessary capabilities
are developed and existing custom and habits are addressed, for example
by supporting pilots and training programmes, and by creating national
guidelines and/or targets.
The healthcare sector in developed economies face a tremendous challenge over
the next decades. Healthcare costs are increasing, for example driven by an ageing
population, technological development and increased expectations from patients.
Although Denmark is the country with the lowest projected cost increase, its public
spend on healthcare is expected to rise from ~7% of GDP in 2008 to ~10% GDP by
2050. 268 Such projections obviously motivate investigations for cost reductions and
productivity improvement.
Hospitals are different from the ‘producing’ sectors discussed in Chapters 3.2–3.4 in that
their output is a service. Hospitals do, however, procure, use, and discard vast quantities
of goods and materials. For this sector this report therefore focuses on how hospitals
could use their scale and centralised management to maximise resource efficiency
through performance models, and minimise their waste through best practices in
prevention and recycling.
In 2013, Danish hospitals spent EUR ~2.4 billion on physical goods. 269 Based on what
types of products are already offered in the form of performance models, an estimated
38% of the total purchases could be addressable (Figure 33). This includes a range of
advanced equipment (e.g. MRI scanners, radiation treatment equipment, and laboratory
instruments) and also (semi-)durable goods (e.g. scalpels, cuffs, and surgical apparel). It
does not include the long tail of smaller product categories in ‘other medical equipment’,
so the estimate is likely on the conservative side.
There are also large quantities of structural waste in healthcare that could be addressed
using circular principles. Though these were not explicitly analysed in the Denmark pilot,
a few deserve mentioning:
• Virtualisation. Although the technology is not yet mature beyond the level of
isolated trials, it is anticipated that the efficiency of part of the healthcare system
could be significantly improved by leveraging connectivity and technology-driven
cost reduction of diagnosis. Two existing examples are the blood glucose
monitor for diabetic patients and the various ‘e-health’ applications; a plausible
development is that patients take a variety of samples at home using a connected
table-top device, send the diagnostic outcome electronically, and consult physicians
remotely using a videoconference application.
• Preventive healthcare. Increasing healthcare costs have prompted the idea of
governments reducing the need for costly healthcare interventions by increasing
the overall health of the population. Shifting the focus to disease prevention
could offer a tremendous opportunity, not only in terms of avoided investment
in hospital beds (and the materials associated with construction and usage/
management) but also in terms of reduced productivity loss in the society. The
Alzira model from Valencia offers an early example: driven by the nature of the
268 The King’s Fund, Spending on health and social care over the next 50 years. Why think long term?, (2013).
269 Expenses for Denmark’s 5 major regions, data from Danish regions. Purchase of goods represents ~15% of
total hospital budgets; hospitals purchase services for an additional EUR 2,400 million.