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Health care facilities cope with new environmental risks.

The well-publicized washing ashore of medical wastes along the beaches of New York, New Jersey and Delaware in the late 1980s marked the end of the age of environmental innocence for hospitals and other health care facilities. Since that time, health care facilities have increasingly come under the scrutiny of the federal Environmental Protection Agency (EPA), plus local and state regulators. Hospital boards, administrators and risk managers, already under stress from rising costs and malpractice concerns, must now weigh the costs and consequences of reducing the pollution they contribute to the air, land and waterways of their communities.

Health care is a service industry that most communities traditionally have welcomed as clean and desirable, but with respect to pollutant discharges to the environment, it has many traits in common with manufacturing and industrial operations. As such, hospitals, clinics and nursing homes are subject to greater scrutiny from environmental interest groups. They are being forced to deal with recent environmental legislation that not only mandates compliance and cleanup, but also includes administrative, civil and even criminal penalties for noncompliance. Many of the newer environmental laws also allow citizen or third-party lawsuits designed to bring about compliance.

While many of these regulations have resulted in significant improvements to the general well-being of the American public, the cost of compliance, in many instances, has been enormous. Few institutions in the health care industry have been left untouched. In order to manage environmental risk, health care facilities should take a proactive approach to complying with these regulations. The facility will have more control over the process by acting first, rather than waiting for regulators to respond. Early identification of exposures allows a hospital, clinic or long-term care facility to develop compliance and remediation plans without the restrictive schedules often mandated by government regulators. In many cases, proactive compliance will allow regulatory involvement to be avoided completely.

Medical Wastes

In 1987, large quantities of medical waste washed ashore in New York and New Jersey, resulting in the closing of local beaches and an environmental and public relations nightmare for local health care facilities. Similar incidents made national headlines in 1989. The fallout from these events included the passage of the Medical Waste Tracking Act of 1988, which charged the EPA with developing rules for managing medical wastes. Beginning in 1989, the EPA started what was to be a two-year test program in Connecticut, New York, New Jersey, Rhode Island and Puerto Rico. The evaluation of that pilot program is still ongoing, with formal rules to follow.

It is a certainty that medical wastes will be regulated by the EPA in the near future, even though the exact terms are not yet known. Most health care institutions have taken the initiative by tightening their own internal procedures. At issue here is not only the environmental liability posed by these procedures, but also the risk of spreading infection among patients, staff and visitors.

Virtually all health care facilities already employ "red bags" to collect medical wastes, and have strict procedures for segregating and properly disposing of these wastes. Another common technique is the use of clear plastic bags for the collection of non-medical debris, so that the custodial staff can check for proper segregation of these wastes prior to disposal.

Concerned about their own liability problems, most solid waste collection and disposal firms now closely monitor solid wastes collected from hospitals, clinics and long-term care facilities. Any indication of medical wastes being improperly disposed of normally results in the waste-management firm refusing to accept the shipment. In some instances where these rules have been violated, the institution guilty of mixing medical and non-medical wastes has been required to remove all wastes associated with that shipment from the disposal site and has been barred from further disposal for several months.

Underground Storage Tanks

Leaking underground storage tanks (USTs) constitute one of the biggest threats to groundwater in the United States today. The EPA estimates that there are more than 2.5 million USTs that come under its jurisdiction, and this number includes USTs located at most of the nation's hospitals. The seriousness of this problem is illustrated by the fact that just one leaking UST can easily contaminate an aquifer, rendering local water supplies unusable. Replacement of a leaking tank and remediation of the contaminated soil and groundwater adjacent to the tank can cost as much as $1 million. Last year, more than $1.6 billion was spent nationally to remediate leaking USTs. Additionally, third-party suits for damages associated with a leak can result in considerable costs for defense and subsequent damage payments.

Most health care facilities are classified as "nonmarketers" under the regulations of the Resource Conservation and Recovery Act (RCRA), which sets standards for the design, installation, operation and monitoring of USTs. As nonmarketers with fewer that 100 tanks, health care facilities must have all USTs tested by the end of 1993, by which time they must also demonstrate financial responsibility of $500,000 per occurrence with an aggregate of $1 million for disposal and cleanup. By 1998, nonmarketers must either replace existing tanks or upgrade them to double-wall equivalent, meaning the tanks must contain both an inner and an outer wall. Because of the complexity of remediating a leaking tank, health care institutions are advised to select only experienced contractors and to make sure the contractor carries adequate insurance with pollution coverage in the event of any spread of contamination.

Twenty-eight states currently have EPA-approved UST funds that will fulfill the financial responsibility requirements and cover all or a portion of the costs to remediate a leaking underground tank. Another six states have programs that are not yet approved by the EPA. Health care providers in states without UST funds must shoulder the full cost of repairing leaking underground tanks, although insurance is available to provide financial coverage for incidences.

In addition to USTs, hospitals also need to pay attention to their above-ground storage tanks. The federal Clean Water Act mandates that tanks be sufficiently diked to prevent spills in the event of a catastrophe. Many states are enacting financial responsibility requirements for above-ground storage tanks that mirror the requirements for underground tanks. A number of large hospitals operate their own sewage treatment plants, in which case the importance of regulations and liabilities is obvious.

Air Emissions

Incenerators have long been used at hospitals for volume reduction of paper and other routine solid wastes, as well as for disposal of medical wastes. But when it comes to medical wastes and some types of disposable supplies, incineration raises many new environmental concerns.

The increasing use of disposable supplies, mostly made of plastics, has caused previously innocuous incinerators to become a prime source of air pollution. The pollution results from the incomplete combustion of polyvinyl chloride (PVC) at temperatures below 2,000 degrees Fahrenheit. This process leads to the formation and discharge of carcinogenic substances such as dioxins and furans. In addition to these substances, the chlorine in PVC is converted to hydrochloric acid, which act as a respiratory irritant and can corrode nearby structures.

The EPA is currently developing new emission standards for medical waste incinerators. Risk managers at facilities that have active incinerators should carefully weigh the exposures and compliance costs associated with the continued operation of the incinerator against other methods of disposal.

The air pollution problems of health care facilities don't end with medical wastes. With the passage of amendments to the federal Clean Air Act in 1990, emission levels have been severely tightened and many small sources, including some hospitals, will be required to obtain air permits for the first time. These permits may take up to one year to obtain and may require the addition of extensive emission controls to the existing system. Risk managers should consult with local air quality officials to determine the local status for attainments of ambient air quality standards.

Other sources of air pollution generated by hospitals include emissions from power plants operating on fossil fuels, the evaporative blow-off from cooling towers and the release of chlorofluorocarbons (CFCs) by air conditioning and refrigeration equipment. All of these sources are coming under increased federal regulation.

The international debate over the destruction of the ozone layer has focused EPA attention on the problem of CFCs. New EPA rules propose steps that must be taken in order to control their release, and also create a bounty of up to $10,000 payable to anyone reporting violations of the law. Therefore, hospitals should survey all potential sources of CFCs (including vehicle air conditioning equipment), institute a monitoring program and initiate a plan for the elimination of CFCs.

Less publicized is the problem of evaporative blow-off from cooling towers, used in many large commercial air conditioning systems to dissipate heat. Many hospitals administrators, concerned about bacterial contamination of these systems, began adding cadmium-based bactericides to the cooling water to control bacterial growth. However, this has the undesirable side effect of releasing cadmium into the outside air, a process that the EPA is now seeking to regulate.

Two others often-overlooked sources of air pollution are maintenance activities and laboratories. Maintenance shops often may include polluting activities such as metal stripping, degreasing, painting and welding. Most shops have exhaust ventilation systems to protect workers, but these systems should be equipped with adequate air pollution control devices to remove organic vapors and metal fumes.

As for hospital and independent medical laboratories, nearly all appear to be equipped with sophisticated exhaust and filtering systems. However, problems can arise when maintenance declines or the systems begin to age. Numerous systems that have been inspected were found to have missing or improper filters. In these cases, the best risk management tool is to make sure maintenance crews are properly trained and that can adequate maintenance schedule is strictly followed.

For hospitals, taking seemingly positive actions such as installing a new grassy commons or expanding a parking lot also have their darker environmental consequences. The EPA is focusing more attention on what is called "non-point" sources of pollution. A green campus area, for example, produces a runoff containing pesticides and fertilizers, while a parking lot generates runoffs contaminated with oils, greases and metals.

Radioactive Substances

Many treatment procedures carried out by health care staff involve radiation implants or radioactively tagged compounds and scintillation fluids, which are commonly used to trace the uptake (or absorption) and utilization of substances by patients. The handling and disposal of implants are governed by the Nuclear Regulatory Commission (NCR). Due to strict precautions that are mandated in the medical industry, implants are generally handled properly.

The same level of care is not always used with radioactively tagged compounds and scintillation fluids. Since most of this material is very low level radiation, laboratory procedures often become lax, and these compounds are simply poured down drains or emptied into the trash. Health care facilities must use care in selecting a disposal site for radioactive wastes. Also, these facilities must be licensed by the NRC. Under the regulation of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), better known as Superfund, more than 40 health care facilities and laboratories have become potentially responsible parties (PRPs) by sending low-level radioactive wastes to disposal areas that are now Superfund sites.

Hazardous Sites

Hospital risk managers are also learning that the costly cleanup of hazardous waste sites can quickly become their problem. A recent University of Tennessee study estimated that the cleanup of hazardous waste sites in the United States could exceed $1 trillion. Up to now, 43 health care facilities have found that their lack of attention to past disposal practices has resulted in their becoming PRPs at Superfund sites. Due to the strict, joint and several liabilities associated with Superfund, a health care facility could easily find itself liable for the total cost of cleaning up a site.

Two of the primary hazardous waste culprits for hospitals are paints and solvents, which are used in various maintenance activities. These wastes must be disposed in a permitted treatment and disposal facility and not simply poured down a drain, dumped in the rear of the facility or shipped to the local landfill. Depending upon the quantity of hazardous waste generated, the facility may be required to manifest and record quantities, transporters and ultimate disposal sites for these wastes.

Since health care facilities identified as PRPs are normally small-volume contributors to a Superfund site, the best way to comply with CERCLA is to evaluate the total quantity of waste disposed at the site. If the waste contribution is less than 2 percent of the total volume of hazardous waste at the site, the facility should attempt to enter into a de minimus (small contributor) settlement with the EPA. By "cashing out" in this manner, the health care facility can limit its ultimate liability independent of actions by other PRPs.

Proactive Environmental Compliance

Considering these various hazards and exposures, medical facilities should take a proactive approach to complying with regulations. Self-initiated compliance may help the facility avoid or greatly reduce administrative, civil and criminal penalties for noncompliance.

Both the Department of Justice and the EPA encourage self-initiated compliance, and will often waive penalties for violators demonstrating a willingness to comply voluntarily. This proactive approach may eliminate or reduce the threat of third-party lawsuits permitted under most environmental laws.

Proactive management of environmental risks can greatly reduce transaction costs, which are predominately legal. A recent study by the Rand Corp. found that up to 31 percent of hazardous waste cleanup costs under the Superfund program are associated with legal fees. Finally, taking a proactive approach allows the hospital to develop goodwill and better community relations by demonstrating that it is an environmentally responsible member of the community.

Specific risk management steps can be taken as part of this proactive approach. The first is an environmental audit, which identifies any exposures or points of noncompliance. Next is a management review, which is conducted to ensure that the facility's management team and systems adequately address environmental concerns. These steps are followed by cooperation with regulatory agencies to establish compliance plans and schedules and by a community relations plan to ensure that the adjoining community is aware of the steps being taken to improve and safeguard the environment.

Health care facilities have entered a new era of environmental awareness and regulation that requires careful vigilance by administrators and risk managers. Many of the potential risks are not readily obvious. With state, national and international political attention focused on environmental issues, hospitals and other health care providers must stay abreast of new legislation and agency regulations, and be prepared to deal with environmental interest groups that may challenge the facility's past or current environmental practices. Overall, a proactive approach is the best way to mitigate the impact and any potential costs associated with environmental compliance.
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Author:Ayers, Kenneth W.
Publication:Risk Management
Date:Oct 1, 1993
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