Keeping Score of Sustainability
Sustainability all along the supply chain is an essential part of Kaiser Permanente's environmental stewardship goals and "Total Health" agenda.
Kaiser Permanente has launched a significant sustainable purchasing initiative with the goal of reducing greenhouse gas emissions by 30 percent by the year 2020. A culture of sustainability in both real estate and supply chain management has now been fostered throughout its entire U.S. health system, and particularly in California, where stringent sustainability efforts are not only championed, but also required.
“With a long history of working with manufacturers to remove harmful chemicals from the products we purchase, Kaiser Permanente already has demonstrated that we can improve and expand our health care services while reducing the organization’s environmental impact,” said Joel Sigler, Kaiser Permanente’s national environmental health and safety senior manager.
Kaiser Permanente’s supply chain sustainability program is essential to the health system’s environmental stewardship and “Total Health” agenda, which focuses improving the physical, social and emotional health of communities.
Success Down the Supply Chain
Kaiser Permanente’s environmentally preferable purchasing (EPP) program includes initiatives to reduce and eventually eliminate harmful chemicals in products and materials, to seek more sustainably produced food and to reduce waste throughout the health system. The current goal is that 50 percent of purchased inventory meets or exceeds the environmental standards by 2025.
One of Kaiser Permanente’s most successful supply chain initiatives was the creation of the first Sustainable Food Scorecard—a green rating system for vendors and their products that informs as it inspires others to green their offerings. As part of its EPP program, Kaiser Permanente also uses a Supplier Sustainability Scorecard for medical and surgical products that has helped reduce the use of chemicals of concern, which now include harmful antibacterial agents in cleansers and lotions.
In addition, there are more than 50 Practice Greenhealth-documented greening initiatives that have happened within Kaiser’s supply chain. Kaiser has made a commitment to reduce PVC and DEHP in numerous supplies, such as ID bands, medical tubing, laryngeal airway masks, IV administration sets and materials such as carpeting and fabrics. More technology is being traded, exchanged, bought back, donated and upgraded for energy efficiency than ever before, including cardiology ultrasound machines, ECG carts and computer components. The approximately 2,500 defibrillators installed across Kaiser’s medical facilities were revamped in 2008 and are now composed of 33 percent fewer raw materials, which led to a 9 percent cost savings in the first year. More recently, Kaiser has upped its spending on healthier, sustainably produced food (a 20 percent increase as of December 2015); sourced and procured the chemically safest infant skincare products, soaps, lotions, sanitizer and flooring; and doubled down on purchasing paper and products made from recycled content. Greener cleaning previously accounted for about 23 percent of purchasing dollars, but that has nearly doubled to 43 percent. The overall savings produced by reducing chemicals of concern is measured at about $85,000 every year.
Kaiser Permanente has also invested in energy-efficient vending machines, elevators that use regenerative drives, self-powered keyless locks, and more energy-efficient and cost-effective light bulbs. Recycling and upcycling continue to gain new ground: Just one success story is the transfer of more than 44 tons of old linens to a partner that resells nonreclaimable linens across the globe to be remade into drop cloths and moving wrappers for the cargo transport of fragile airplane parts.
The health system’s logistics, distribution and fleet management operation is a well-oiled machine. It is a top-scoring EPA SmartWay Partner and has overhauled its Southern California fleet by using smaller, more fuel-efficient vehicles along 37 routes, thereby eliminating 20,786 gallons of gasoline and $79,610 worth of fuel waste.
Building Buying Power
One of the biggest challenges in greening the supply chain is gathering the right information to properly vet suppliers and their products. Sometimes this takes a little convincing—or a lot. A large health system like Kaiser Permanente has more clout at the bargaining table.
“We leverage our purchasing power to drive the availability of that information during our procurement processes, and a number of our key suppliers have been supportive and collaborative with these efforts,” said Sigler. “But we want to get to a place where information about chemicals of concern in products, as well as other environmentally relevant attributes, is readily available from all suppliers for all products.”
Kaiser Permanente purchases must meet not only environmental standards, but also competitive business standards that ensure continuity of quality and supply. An exhaustive selection process is ongoing throughout the supply chain, and dozens of vendors are short-listed and further vetted from there.
“We go through a very rigorous selection process, not just looking at the cost offered by vendors, but their stability, track record and ability to perform at the scale required at numerous locations,” said Ramé Hemstreet, Kaiser Permanente’s vice president of operations and chief sustainable resources officer.
Taking advantage of scale is a must for driving sustainability while reducing cost. With about 600 separate facilities in California alone—including various hospitals, medical offices and administrative buildings—Kaiser Permanente harnesses enormous purchasing power to reduce unit cost.
Preventing the Drain of Water Resources
Managing the supply chain requires a great deal of water consumption. Operating sterilizers, kitchens and restaurants, as well as any on-site laundry services, takes its toll on the use of this valuable resource. Kaiser Permanente outsources a large portion of its laundry services, but water intensity was still at about 53 gallons per square foot, per year, when the baseline measurement was taken in 2013. Around that time, health system leadership made a commitment to improve water efficiency by 10 percent. That goal has already been surpassed nearly two times over. “We have already achieved an 18 percent reduction against that 2013 baseline,” said Hemstreet.
Just a few of the initiatives that have allowed this to happen include smart irrigation systems that water plants only when needed instead of on a static timer, the installation of low-flow fixtures wherever appropriate, and scouring water bills for the presence of possible leaks that are then fixed immediately. Kaiser Permanente now hopes to reach a 25 percent reduction in water intensity usage by 2025.
“Some facilities have already reduced consumption more than 25 percent, so it becomes a matter of bringing other facilities up to speed across our full inventory,” added Hemstreet.
Collaborating for Change
Two of the most important criteria for a healthy supply chain are commitment and active engagement from leadership, plus continued community outreach. Many of these commitments to greening energy and the supply chain go beyond Kaiser’s California facilities and affect purchasing programs in Hawaii, Colorado, Maryland, Virginia and Washington, D.C. Collaborative efforts, including those with the University of California system, are easing the way toward achieving common greening goals using the most cost-effective means possible.
“We take every opportunity to discuss with others how we reduce our carbon footprint while reducing costs,” said Hemstreet.
It is this attitude of openness and community engagement that will pave the way to a greater understanding and commitment toward environmental stewardship. The next step is working to become carbon-positive by 2025. Removing more carbon from the atmosphere than the health system contributes will demand an even more concerted effort among energy purchase, water reduction and supply chain greening programs.
This net-zero-carbon initiative will likely take the form of multiple strategies, including purchasing carbon offsets or additional green power. But one thing is certain: Kaiser Permanente is among the health systems leading the way toward healthier, more sustainable medicine.