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Major Challenges for Adopting Circular Healthcare Operations

There is an increasing recognition that moving towards circular healthcare can improve sustainability in several ways, including cost savings, reduced waste, and environmental preservation. As the number of emerging markets and ageing populations contribute to rapid growth in the global healthcare sector, the large amount of medical waste generated by hospitals and clinics may pose a significant health risk to humans and the environment. A circular healthcare system aims to eliminate medical waste by extending the product life and looping it back into the system for reuse, while at the same time, healthcare organizations must meet specific standards related to hygiene and safety. In actual practice, there are several challenges to implementing circular healthcare. Examples of barriers to circularity in the healthcare industry include economic and financial, policy, organizational, environmental, social, human resources, managerial and operational, and technology. This article discusses six major challenges of adopting circular healthcare.

Regulatory and Ethical Barriers

The transition from traditional linear healthcare to circular healthcare requires significant changes in policies, regulations, and ethics, which will require substantial formalisation, collaboration and other processes mechanisms among governing bodies, healthcare providers, patients, and other stakeholders. Clear guidelines and regulations are significant regulatory barrier to circular healthcare initiatives. It is uncertain how medical waste streams are classified and how materials can be reinserted into production processes when they are still reusable but fall under the definition of medical waste under the law.

The absence of a global identification system for materials and an assessment of their recyclability presents an obvious obstacle since products are rarely produced and distributed on a national level alone but are sold, used, and ultimately disposed of in numerous countries worldwide in a time of globalisation. Another significant barrier is the lack of incentive policies, such as effective taxation, to encourage business models to adopt circular healthcare practices. Low resource taxes may influence circular healthcare business models, as healthcare organizations often choose to purchase raw materials at lower prices rather than recycle them, which usually involves additional processing. Ethical barriers to adopting circular healthcare are becoming increasingly a concern. First, the clinical challenges of safety and sterility of reuse of products or materials entail. Second, the redistribution of resources and benefits of resources from one group to another during the adoption of circular healthcare may raise ethical concerns related to fairness and equity. Therefore, healthcare organizations must engage with stakeholders to ensure that circular healthcare initiatives are implemented fairly and equitably.

Lack of Awareness

Poor awareness and understanding of circular healthcare practices amongst industry players and actors can hinder opportunities for adopting circular initiatives. Limited disclosure of statistics about the national production and disposal of medical waste and information about how value can be recovered, recycled, or reused remains relatively limited. This lack of awareness leads to the public’s poor acceptance and trust regarding the quality and usability of recycled medical products and goods.

Another cause of the lack of awareness is the complexity of the healthcare system. It is well known that the healthcare system is highly regulated and consists of several stakeholders, including healthcare providers, patients, insurance companies, and government agencies. Effective communication and collaboration may be challenging as each stakeholder has their own interests, priorities, and concerns. In addition, the complexity of circular healthcare, which involves a complex system of production, consumption, and recycling, requires a high degree of coordination and collaboration among the relevant stakeholders. As circular healthcare is still a relatively new concept, many people need to become more familiar with its principles and practices, which makes introducing new technologies and processes challenging.

Financial Constraints

The concept of circular healthcare refers to transitioning from a linear, waste-producing healthcare system to a more sustainable and environmentally friendly one that requires significant financial investments in infrastructure, technology, and human resources. As part of the circular healthcare business model, a company must manage distribution planning, inventory management, production planning, and a reverse logistics network. These activities require substantial amounts of time and investment from the company. The adoption of circular healthcare would incur significant upfront investment costs and indirect costs for healthcare organizations that are already experiencing financial pressures due to rising costs, ageing infrastructure, and increasing demand for services. Investments in energy-efficient equipment, waste management systems, renewable energy sources, staff training, construction, technology and so on contribute to the high cost of circular initiatives.

Regulations and legal requirements may also pose a significant financial challenge to healthcare organizations. For example, establishing a new waste management system may require compliance with strict regulations and standards, which can be costly. Especially the disposal and recycling costs of infectious and hazardous waste (e.g., drugs, chemicals, needles, etc.) are approximately 5-10 times higher than those of non-hazardous wastes. Furthermore, recycling operations can be costly and inefficient (resulting in material loss and cross-contamination), and the costs associated with reprocessing, recycling, or reusing waste make circularity a less attractive option.

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Lo Cham Man
Lo Cham Man
Lo Cham Man has over 26 years of healthcare experience in both public and private sectors, which include major project contracts and procurements. He holds an MBA degree from the University of Birmingham (UK) and he is a member of the Singapore Institute of Purchasing and Materials Management (SIPMM). Cham Man completed the Graduate Diploma in Procurement and Supply Chain Management (GDPSCM) in June 2023 at SIPMM Institute.

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