Outside Help
Written by Peter Buxbaum
MMT 2011 Volume: 15 Issue: 3 (May)
Commercial enterprises often outsource activities in order to reduce costs, streamline operations and focus on core competencies. The latter motivation is perhaps the key factor informing decisions to outsource military and veterans medical functions.
Recruiting and developing career-oriented personnel is central to the mission of the United States military, no less so for its medical branches. But when it comes to filling temporary slots for physicians, nurses and allied health professionals who have been deployed to theater, the military has found it best—especially in light of the nationwide shortage of these professionals—to rely on outsourcing companies with expertise in recruiting professionals for temporary assignments.
Some of the larger veterans hospitals have facilities for handling some medical waste. But few if any military or veterans hospital—or civilian hospital, for that matter—has the wherewithal to run a comprehensive waste disposal program. Enter medical waste specialists who perform these services on behalf of the medical facilities.
One of the core missions of the U.S. Army Medical Command HealthCare Acquisition Activity (HCAA) is to contract out those activities that have been determined to be ripe for outsourcing. From his perch as commander of HCAA, Colonel Scott Svabek oversees outsourcing contracts that range from personnel and medical waste disposal to housekeeping activities. Just about every Army hospital in the U.S. outsources its housekeeping and waste management functions; when it comes to personnel, Svabek takes a more discrete approach.
“We separate them into three basic portfolios,” said Svabek, “medical doctors, nurses, and allied health services such as lab technicians, therapists and other hospital specialties.”
Some temporary contractors are hired directly, through advertisements in newspapers or online by individual facilities. But Svabek’s group gets involved when the scope of the recruiting goes beyond that. The HCAA recently wrote contracts for nursing services at the Brooke Army and Wilford Hall Medical Centers in San Antonio, Texas. The organization also oversees standing regional and national contracts for the hiring of temporary personnel.
“The Brooke Army and Wilford Hall contracts were written to support those particular facilities, mostly to augment staff nursing services,” Svabek said. “The medical centers write task orders for the hours of nursing services that they need. We have also hired companies to provide services for anesthesia, orthopedics and chiropractics.”
Contracts awarded on a regional basis cover services that augment physician, nursing and allied health services at specific facilities. Temporary assignments for physicians usually cover 60 days to one year because of the expense involved. “We have to pay them a salary plus a per diem rate associated with the local area where they have been assigned,” Svabek said. “These types of contracts are used sparingly and are used if a provider had to be deployed.”
Federal acquisition regulations require that these types of human resources contracts be set aside for small businesses when it has been determined that sufficient competition exists among small businesses for these types of services in the marketplace. The contracts are awarded based on provider qualifications, price and past performance as a government contractor. As a result, Svabek deals mostly with small businesses when it comes to filling personnel slots.
But the small businesses that hold these contracts often seek the help of larger organizations which compete to fill the slots. Two of these are Staff Care, a unit of AMN Healthcare which specializes in placing medical personnel in temporary assignments, and LocumTenens, which works in the same space. Both companies are preferred contractors on federal supply schedules for personnel placement and also work as subcontractors to smaller companies that hold military contracts.
“We provide staffing for military physicians and allied personnel as well as nursing,” said Steve Delin, Staff Care’s vice president of marketing. “The majority of the positions we fill come about as a result of staff shortages and shortages due to deployments.”
Physician shortages are endemic to both the civilian and the military markets and have come about largely due to the aging of the population and the resulting increase in demand for medical services. Military facilities must also cope with the exodus of physicians and other health professionals seeking higher compensation in the civilian market.
“Deployments lead to temporary staffing needs for as little as three to six months or as long as one to two years,” said Delin. “If a cardiologist in a military hospital is shipped overseas, the facility needs to fill that position until the physician returns.”
There are two ways the military can fill those types of positions. The medical commands or facilities could consult the Federal Supply Schedule of preferred vendors in this area, of which Staff Care and LocumTenens are two, and which includes both large and small companies. Military medical facilities often use these vehicles to fill specific and immediate needs, particularly when it comes to deployments. Or they could go through one of the broader military medical staffing contract vehicles. Each branch of the armed services handles these types of staffing needs separately.
The Army contracts provide set-asides for small businesses which then seek help from larger organizations such as Staff Care and LocumTenens.com to fill the required positions. “These smaller companies compete on specific task orders and we support those smaller companies,” said Delin. “Small business set-asides are a great idea, but the disadvantage is that the small businesses don’t have the recruiting resources they need to fill many positions so they partner with larger companies. If they are trying to fill a position that they can’t on their own they come to our company on an informal and non-exclusive basis.”
LocumTenens.com specializes in filling positions for physicians as well as for nurse practitioners and physicians assistants. “Because of the physician shortage, it can take a military hospital six to 12 months to fill a position,” said Terrence Smith, the head of the company’s government sales division. “They call us because we can fill these slots rather quickly.”
LocumTenens.com, a Latin phrase that means “to substitute for,” has compiled a database of thousands of health care professionals who fall into three categories: new residents interested in testing different markets, lifestyle seekers who want to practice their profession but who don’t want to get caught up in hospital politics, and professionals approaching retirement who don’t want to lose their clinical skills. Physicians have the opportunity of working for the government in different locations without having to pursue licensing in several states.
“Psychiatrists are the specialists most in demand right now by the military, with many soldiers coming back from Afghanistan and Iraq with post-traumatic stress disorder and traumatic brain injury,” said Smith. “Because of the emphasis on preventative medicine, we are also starting to see an upswing in primary care physicians, as well as for nurses and physicians assistants.”
The military realizes a number of benefits by outsourcing these recruiting functions. “If they did it in-house, they would have to hire one or more civilians to work on these staff challenges,” said Delin. “They are also able to offer more flexible compensation packages because the professionals work as independent contractors of the personnel companies and are not subject to government pay caps.”
“We have the ability to plug a hole in a staff much quicker than the military could through permanent recruitment,” Smith said.
Management of regulated medical waste across most stateside Army hospitals is governed through single contract with a company based in Lake Forest, Ill., called Stericycle. The Army Medical Command awarded the company a three-year, indefinite delivery/indefinite quantity (IDIQ) contract which allows command regions and individual facilities to generate task orders to Stericycle which address their specific needs.
Stericycle also offers VA hospitals the Stericycle Sharps Management Service using Bio Systems reusable sharps containers. “This service combines safety, convenience and environmental responsibility because specially trained service technicians proactively exchange the reusable sharps containers before they are full,” said Pat Daley, director of government sales for Stericycle. “The system not only reduces the risk of needle sticks to your staff, but also prevents thousands of pounds of plastic and cardboard from accumulating in landfills. An average 200-bed hospital will annually divert 13,180 pounds of carbon dioxide; this is equivalent to not burning 679 gallons of gasoline.”
Medical waste is regulated by several federal and state government agencies. It constitutes a U.S. Department of Transportation class 6.2 hazardous material during transport. The Occupational Safety and Health Administration and various state government agencies are also involved in ensuring that this type of waste is properly handled, packaged, stored, hauled, treated and disposed.
“Health care facilities generate nine other waste streams in addition to medical waste and 80 percent of those are also highly regulated. These include pharmaceutical waste hazardous waste, confidential documents and electronic waste,” Daley said. “Stericycle provides solutions for these waste streams through a sustainable process that combines education, onsite training and continued assessments based on our proprietary compliance and waste audits.”
In addition to the MEDCOM contract, Stericycle works with VA hospitals, military facilities, state government facilities and educational institutions across the country, providing the necessary containers, as well as specially trained staff for the pick-up and disposal of regulated medical waste. The Stericycle medical waste disposal service provides complete custody documentation, which is essential for accountability and regulatory compliance of biohazardous materials As part of its waste disposal contract, Stericycle provides all necessary containers, picks them up, treats and disposes of the medical waste. The company scans the containers at every point in the process and provides online access to manifests. This provides Stericycle’s customers with essential documentation that can be easily accessed down to the department level through the company’s proprietary data management system.
“Health care facilities are one of the largest waste producers in the United States, second only to the food industry,” said Carrie Griffiths, a spokesperson for WM Healthcare Solutions, a subsidiary of Waste Management Inc. “Because medical facilities produce so much waste, the benefits of waste reduction and recycling initiatives can be substantial.”
WM works with a number of VA hospitals in an effort to comply with waste disposal regulations and to generate efficiencies in the waste disposal process. “About 25 percent to 35 percent of solid waste is composed of organic, biodegradable materials,” said Griffiths. “WM has a host of programs that use organic waste to generate energy, support agriculture and replenish the earth, including composting and biodiesel fuel production.”
Eighty percent of hospital waste is regular non-infectious solid waste, which includes regulated medical waste, confidential waste and hazardous materials, as well as packaging, food waste and other materials, said Griffiths. “Some of this waste is treated as regulated medical waste, which is far more expensive to handle,” she said. “Training your employees to segregate waste correctly can help create savings.”
Preventing standard waste from mixing with costly medical waste drastically reduces disposal costs. “The cost of disposing medical waste tends to be five times higher in a hospital than disposing of non-medical solid waste,” said Griffiths. “Some of the waste, such as pharmaceuticals, must be permanently disposed, but most medical waste can be recycled if properly segregated.”
According to Griffiths, most hospitals do not have adequate procedures in place to manage waste disposal in the most efficient manner. “Some VA hospitals are big enough to have their own autoclaves,” which perform deep sterilization of medical waste, “but many don’t,” she said. “That is where we come in. Medical facilities across North America have implemented integrated waste management programs in recent years. Most partner with experienced material management providers to develop a system.”
Such a system involves an integrated approach which looks across all of the hospital’s waste streams, said Griffiths. “Beyond the obvious environmental implications,” she added, “instituting a successful hospital materials management program can reduce costs, mitigate operational risk and increase worker safety.”
A different kind of waste disposal program, to tackle a somewhat different kind of problem, was inaugurated in January 2010 by a Houston-based company called Sharps Compliance with the VA. The original pilot program, in place in the region which provides health care for veterans in Maryland, Virginia, West Virginia, Pennsylvania and the District of Columbia, has since expanded across 20 states. Around 20 percent of the 5.5 million veterans provide care by the VA nationally are now covered by the pilots.
“The pilot allows each of the medical centers within the region, both inpatient and outpatient, to provide the Sharps Recovery System and the RxTake- Away solutions to their patients,” said David Tusa, the 15-year old company’s president and CEO. These programs allow veterans to send used syringes and unused pharmaceuticals from their homes for proper disposal by way of the U.S. Postal Service.
“It is estimated that more than 4 billion prescriptions are written annually in the United States and up to 40 percent of drugs dispensed outside of hospitals aren’t taken, generating some 200 million pounds of unused pharmaceuticals each year,” said Tusa. “It is also estimated that some 3 billion syringes are being improperly disposed of by individuals in this country.”
Unused patient medications contribute to accidental poisonings, according to Tusa, which have involved an 80 percent increase in U.S. deaths from accidental overdose of narcotics in a recent six-year period. Studies have found waste pharmaceuticals in the drinking water of more than 50 million Americans, and the U.S. Environmental Protection Agency is now studying these and other contaminants to determine whether regulations are needed. Improperly disposed of syringes contribute to accidental sticks and the medical and health complications which can ensue from such an event.
“When a VA facility dispenses a syringe to a diabetes or multiple sclerosis patient or medication to a veteran, they also give them a prepaid package for return to our facility,” said Tusa. “In the case of syringes they get a red polyethylene container and a cardboard package. Unused pharmaceuticals are returned in a special envelope. Both have the postal permit on the outside.” Postal regulations permit the transportation of medical waste in this manner.
The alternative to the Sharps Compliance program, according to Tusa, would be for the VA to hire a pickup service to ensure the proper disposal of the syringes and medications. “They are required by law to properly dispose of medical waste,” he said. “With our solution, you are using the existing infrastructure instead of a truck and driver. The mailman comes every day. It is much less expensive.”
Once Sharps Compliance receives the material, unused medication is incinerated and syringes are autoclaved, shredded and converted into material that is used in the manufacture of cement and other products such as alternative fuels. “None of the Sharps Compliance processed medical waste ends up in landfills,” said Tusa.
Military medical facilities can also benefit from outsourcing done by their suppliers, such as medical device manufacturers. “There are tremendous pressures at most medical device manufacturing companies to cut costs,” said Kelly Lucenti, president of Millstone Medical Outsourcing. “We help by partnering with these companies and providing cost-effective solutions that enable the manufacturers to offer implants at lower costs to hospitals, including military and veterans hospitals.”
Millstone offers a number of programs that help manufactures manage their inventories efficiently.
One such program has Millstone inspecting and packaging the products on behalf of the manufacturers. “We can do it less expensively so it makes sense,” said Lucenti.
Medical surgical devices often come in the form of “loaner kits” that are sent to hospitals. “We manage loaner pools for a number of manufacturers,” said Lucenti. “It is all about making product available for surgery 24/7.”
If all the parts are not used, they are sent back to the manufacturer via Millstone, which decontaminates the returned items and prepares them to be shipped out to another customer within 24 hours. Thanks to the location of a Millstone facility near the FedEx hub in Memphis, orders secured even after midnight can be delivered in time for 8 a.m. surgery the next day on the West Coast.
As part of another program, Millstone accepts returns on behalf of the manufacturers, credits the customer’s account, and replenishes the inventory.
Millstone also has a Web-based program in place that allows hospital personnel to order devices directly, without having to interact with manufacturer personnel. Although the system has not yet caught on with hospitals, Lucenti is hopeful that before long this outsourcing solution will benefit hospital operations and finances.
The Army benefits from its outsourcing activities in a number of ways, according to Svabek. The main benefit of outsourcing personnel functions is that it allows medical personnel to concentrate on their core tasks. “We used to have soldiers mowing grass,” said Svabek. “After the first Gulf War and the drawdown of uniformed personnel, we wanted to get soldiers to be more focused on their missions and dedicating more time to do their battle tasks.” The same goes for accomplishing medical missions.
A potential drawback to this approach, said Svabek, is that medical units may place too much reliance on temporary personnel at the expense of recruiting and retaining staff. “But we defer to our customers,” meaning the facilities that actually use their services, said Svabek.
In the case of the waste disposal function the opposite consideration applies, as far as Svabek is concerned. “The disposal of waste is a recurring activity and it’s got to get done,” he said. “By outsourcing this function, the Army doesn’t have to worry about bringing in new people and training them. The contractors have been doing this for a long time and they make sure they bring in people who can do the job.” ♦