2007 Electronics Recycling Supplement - Embracing Change

Prior to 2000, Kaiser Permanente lacked centralized, corporate-wide practices and processes for managing end-of-life technology. As a result, conference rooms, offices, cubicles and medical closets were cluttered with stockpiles of obsolete technology across the organization’s distributed enterprise.

"At the time there were no regulations covering disposal of technology systems," says Lynn Garske, environmental stewardship manager at Kaiser Permanente, headquartered in Oakland, Calif. "Because we have been so committed as an organization to environmental responsibility, employees did not want old equipment ending up in local landfills, so they stored them until we could find a better solution. The stockpiles grew quickly as Kaiser continued to implement new technology across the organization," Garske adds.

Kaiser estimates stockpiled equipment cost the company $2 per square foot and that its value depreciated 6 percent per month. In addition, the equipment was subject to California property tax and caused operational problems by consuming valuable facility space.

"At the same time we identified the problem of stockpiled equipment and its costs, we were embarking on one of the biggest medical records projects in the history of the healthcare industry," says Garske. "It involved putting a PC and monitor in every patient and exam room within Kaiser Permanente and it significantly expanded the role of technology within Kaiser.

"If we were going to be successful, we had to have a process in place for responsible disposal from both an environmental and data security perspective," Garske adds.

Kaiser’s environmental group and IT organization partnered to establish standards and to evaluate resources. Following a thorough evaluation process, Kaiser selected Redemtech, an IT asset recovery firm headquartered in Columbus, Ohio, based on the company’s national capabilities, its ISO 14001 certification and its commitment to the Electronic Recycler’s Pledge of True Stewardship.

"Redemtech separated themselves from other vendors in two ways that were important to us," Garske says. "Their focus on increasing reuse, which minimizes e-waste, and their data security processes."

Working with Redemtech, Kaiser implemented standard processes for technology disposition across its more than 1,000 facilities.

Janemarie Lee, senior manager, asset and vendor management services at Kaiser, says, "We began our relationship with Redemtech just as we were establishing clear asset management policies and processes for our facilities. Having a partner that could directly support all of our facilities was critical to the success of our program."

Redemtech recovers surplus technology directly from Kaiser facilities and manages the secure transport of these materials to a Redemtech TCM (technology change management) center where data-bearing assets are verifiably erased, and all materials are evaluated based on Kaiser’s business rules. Depending upon equipment condition and value, technology systems may be repurposed within Kaiser, remarketed or recycled.

Materials are tracked as they move through the process, and all downstream partners are managed to ensure no Kaiser materials are landfilled, incinerated or shipped to emerging countries. Redemtech uses manual demanufacturing processes where appropriate to recover usable components.

Using Redemtech’s Retrac process automation technology, managers like Lee can track assets from the point of recovery through erasure, refurbishing, recycling or remarketing. Redemtech also provides certified reports on data destruction, reuse and recycling that can be imported into Kaiser’s Asset Center asset management system.

ENSURING SECURITY. "As the nation’s largest HMO, we must be above reproach and follow HIPAA (Health Insurance Portability and Accountability Act) guidelines precisely," says Todd Gower, director, IT compliance and contracts.

"Redemtech’s reporting and tracking capabilities are important to our HIPAA compliance effort," Lee says. "We not only have the right processes in place to protect patient privacy, we can document the effectiveness of those processes."

All assets have a serial number that is recorded at the point of recovery and reconciled at point of receipt to document that no assets were lost in transport. End-of-life assets undergo a complete data erasure. Data destruction is verified through a series of documented procedures and indexed back to asset records. All asset transport and erasure records are available online for review or audit by Kaiser personnel.

OPTIMIZING LEASE RETURN. Once basic processes for managing equipment at end-of-life were in place, Kaiser could focus on optimizing technology utilization through increased redeployment and improved lease management.

When the organization’s lease return program was examined, many of the same problems that had affected disposition were discovered. Leased equipment was being stockpiled in storage rooms because negotiated return volumes were already met. Storage costs climbed above $6,000 per month, and equipment in storage was losing 6 percent of its value monthly.

Redemtech developed a lease-return management program to streamline processes and improve information flow between Kaiser and its equipment leasing companies. By integrating lease returns with other TCM activities, Kaiser was able to eliminate storage costs and to reduce handling and buyout costs.

Among the benefits Kaiser realized were increased redeployment of leased equipment to minimize early return, improved asset tracking and the use of secondary market sources to augment equipment shortfalls where appropriate.

SIGNIFICANT RESULTS. Since Kaiser began working with Redemtech in 2000, the company has processed between 2,500 and 5,000 IT assets per month.

An increasing number of assets are now redeployed, and every asset that is recycled is handled in a way that exceeds environmental regulations.

Efficiencies achieved through centralization, process automation and increased technology utilization have offset the costs associated with the processes.

Reducing facility costs and unnecessary property taxes generated savings of more than $500,000 annually. Enhancements to the lease return program generate $2 to $3 million of savings annually.

"We have consistently found that sound environmental policies support sound business policies. By paying attention to how we are managing our technology systems, we have not only dramatically reduced our volume of e-waste, but also improved efficiencies, increased technology utilization and saved millions of dollars," Garske says.

Gower adds, "We are very comfortable with the superior level of service Redemtech is providing as a partner in our compliance program."