DELIVERING THE CIRCULAR ECONOMY A TOOLKIT FOR POLICYMAKERS

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144 • DELIVERING THE CIRCULAR ECONOMY – A TOOLKIT FOR POLICYMAKERS • Initiating a performance model pilot to develop and apply the total cost of ownership (TCO) concept to allow a more holistic view of cost in hospital procurement – thereby creating a mindset as well as bidding rules that are more conducive towards performance contracts. • Building a repository of case studies from national and international examples to build confidence around issues such as e.g. cost efficiency, long-term benefits, contractual flexibility, and dependence on fewer suppliers. o Establishing a government advisory body with the explicit mission of promoting performance-based contractual models in hospital procurement. Hospitals could be given the option to seek such advice for all or specific procurement projects. This could take the form of a partnership, task force, or network to facilitate knowledge sharing. • Procurement rules o o Adjusting budget rules to enable joint budgets and closer working between procurement and technical teams (“breaking down siloes”). This could enable more performance-based contracts (with more procurement staff and fewer technical maintenance staff). Removing regulatory or governance barriers that impede interaction of hospital teams and supplier teams could also help. Adjusting procurement rules and procedures. • Augmenting the procedures for assessing the quality of competing bids with tightly defined ‘circularity’ criteria or KPIs. Such criteria could be part of the (non-binding) guidelines for public procurement and could include promotion, piloting, and knowledge sharing of purchasing criteria). Examples include length of lifetime, reparability, presence of chemicals that hinder recycling, design for disassembling features. • Incorporating accounting for externalities (e.g. the life cycle carbon/water/virgin materials footprint) into the guidelines or rules for all public procurement to create full cost transparency. 3.6.2 Waste reduction and recycling in hospitals Opportunity: Centrally managed and systematic initiative to reduce waste and increase recycling. 2035 economic potential: Not quantified. Key barriers: Insufficient capabilities and skills due to lack of experience; custom and habit; imperfect information. Sample policy options: Pilot of waste reduction and recycling management integrated into staff training; waste minimisation and recycling targets; increased fiscal incentives to avoid waste generation. Large hospitals are like miniature cities, with many sizable and complex flows of materials and information. And, similar to cities, they produce large quantities of waste. Hospitals are run by a central management that coordinates staff and sets a strategic direction for the whole organisation, and thus might have the potential to holistically optimise their waste management. Therefore, as is the case for other centrally and
DELIVERING THE CIRCULAR ECONOMY – A TOOLKIT FOR POLICYMAKERS • 145 tightly controlled systems such as airports, it is reasonable to envision hospitals as champions in both waste prevention and recycling. THE OPPORTUNITY FOR DENMARK The largest source of (non-hazardous) waste in hospitals is the purchasing and preparation of food and beverage. As explained by one sector expert, it is common for departments to order too many meals from the kitchen to add a safety margin, which risks being magnified by the kitchen’s safety margins. As a result hospital kitchens may end up purchasing more food and ingredients than needed, which ultimately produces avoidable food waste. The approach to prevent avoidable food waste for large institutions such as hospitals differs from the alternatives laid out for the consumer-facing market (Section 3.2.2) in that it is more centred on right-sizing procured volumes. One way of incentivising this planning challenge is to set standards on sustainable procurement of the food and catering services, such as introduced by the NHS in the UK. 284 Given its scale, hospitals could systemise and improve recycling beyond the already ambitious targets of the Danish society set by the ‘Denmark Without Waste’ strategy. Hospitals are part of the service sector where the target for recycling packaging waste in 2018 is 70% (paper, glass, metal and plastic) and 60% for recycling of organic waste in 2018. 285 In comparison, Danish hospitals today note recycling rates of 15–30%, with an average below 20%. 286 Danish hospitals therefore have an opportunity to make a systematic effort with strong management commitment to improve recycling, while at the same time reducing waste generation. While this effort needs to be driven primarily by a well-informed and committed staff, it could be guided by, for example, working with waste management suppliers that increasingly provide waste minimisation services apart from operating the logistics and treatment. While the potential has not been fully quantified in this case, it should be feasible to achieve overall recycling rates above of approximately 85% (70%) by 2035 (2020). This corresponds to being aligned with the ‘Denmark Without Waste’ target by 2020 and then gradually outpacing it. BARRIERS AND POTENTIAL POLICY OPTIONS The following paragraphs provide an initial perspective on the barriers limiting the ‘waste reduction and recycling in hospitals’ opportunity (see Section 2.2.4 for the barriers framework). Hospitals face similar social factor and information barriers when aiming to reduce waste generation and increase recycling as when trying to increase the use of performance models in procurement. There is limited capacity within hospital administrations to consider waste prevention and waste handling and, while procurement departments are already highly professional, hospitals lack expertise in waste prevention and management. Furthermore, hospital targets are centred on quality of healthcare; expert interviews indicate that there is resistance to the idea of adding to or diluting such targets with targets relating to waste. Furthermore, there is limited information on the economic benefits of reducing waste and increasing recycling due to a lack of analysis of procured and disposed materials in hospitals. As in the food and packaging sectors, the incentive to reduce waste and increase recycling would rise if the market prices of packaging, food and other consumables reflected their true environmental costs. As before, at the level of individual hospitals, the main short-term challenge is improving capabilities and skills as well as changing mindsets. Over a longer time horizon, policymakers might choose to play a role by creating supporting guidelines (non- 284 UK Department of Health, The Hospital Food Standards Panel’s report on standards for food and drink in NHS hospitals (2014). 285 Danish Government, Denmark Without Waste. Recycle more – incinerate less (2013). 286 Excluding construction and garden waste. Based on interviews and correspondence with representatives from hospital environmental managers and Danish Regions.
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DELIVERING THE CIRCULAR ECONOMY A TOOLKIT FOR POLICYMAKERS

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