Editor's Corner: Making lemonade out of healthcare's discards

After years of traveling to various posts as an executive with Johnson & Johnson, Charles Redding wanted to transition to a non-profit and improve the quality of lives of many others around the globe--all the while cutting waste in U.S. healthcare delivery.

And he is doing just that. Redding, president and CEO of MedShare, pictured above, embarked on a re-branding campaign two years ago, making the non-profit seem less like a humdrum re-purposer of surplus medical supplies. Its new motto, “Improving the Quality of Life of People & Our Planet,” speaks more to the company’s intended impact and concern for the environment.

MedShare ships out to developing counties some $20 million a year in salvaged medical supplies. The supplies include masks, instruments, sponges and other pieces of equipment that are “donated” by hospitals at the end of surgeries, put into barrels that MedShare strategically places outside hospital operating and emergency rooms. They would wind up in a landfill otherwise.

In America, the land of the nearly grotesque plenty, the over-ordering of medical supplies for surgeries is commonplace. A recent study by researchers at University of California at San Francisco (a MedShare client) concluded that a single neurosurgical procedure led to nearly $1,000 in medical supplies specifically ordered for that patient going unused. Virtually all of that  equipment was discarded.

But In the 2015 fiscal year, MedShare shipped nearly 800 tons worth of stuff that U.S. hospitals didn't use or need (that total also includes donated items from big medical supply companies such as Halyard Health and Hill-ROM). The company also refurbishes off-lease and aging medical equipment (think beds and anesthesia machines) and ships it overseas. Yet it's still a drop in the bucket of the estimated 2.5 million tons of medical waste generated in the U.S. every year, no doubt a large chunk of which was never used for its intended purpose. Of the 4,000 or so acute care hospitals in the U.S., MedShare only serves about 50 of them each month.

“The fact of the matter is, this is an opportunity to make lemons out of lemonade, because that stream is so huge,” Redding said during an exclusive interview.

Countries in Sub-Saharan Africa are the biggest beneficiary, getting about 70 percent of all the MedShare shipments. During the Ebola outbreak in 2014 and last year, the company sent nearly three dozen 40-foot shipping containers of medical supplies to the afflicted regions. It also shipped more than five tons of supplies to Nepal last year after it suffered two magnitude 7 earthquakes.

MedShare works with a lot of health ministries of various countries. They can select supplies from the company's website, which currently uses inventory management software similar to the food bank to display items to the world. Teams of physicians and other providers who want to go on an overseas medical mission can also use MedShare to stock up on supplies, which can be obtained for a donation of $75 for 50 pounds of items, and $2 for each additional pound. The company has also provided equipment and supplies to more than 100 safety-net clinics around the U.S. in recent years.

Many of MedShare's agreements are with larger hospital systems. Sutter Health makes cash and equipment donations. Kaiser Permanente essentially turned over the contents of three hospitals it recently replaced with newer facilities. But the company is always looking for new sources of supplies. Most donations can be counted toward community benefit expenditures. So, if you're a hospital or healthcare system CFO looking for a way to cut waste and a writeoff, there's at least one company where you can turn. – Ron (@FierceHealth).