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**Conference Call with**  **John Kelsey of Clean Harbors**  **Re: Hazardous Waste Management**  August 17, 2012 Participants: J ohn Kelsey , VP, Clean Harbors David Metz , Industrial Economics (IEc) Tripp Burwell, IEc Patricia Kessler, DPRA David Gustafson, DPRA Questions from IEc and DPRA for Clean Harbors 1. Q: Can you describe the process of hazardous waste management from cradle to grave ? What is involved in sorting? A: There are mainl y 2 different models utilized by hospitals , sorting and not sorting. For the sorting model, healthcare employees, including nurses, separate waste into different bins

— black for hazardous waste, blue for non - hazardous waste, or purple for dual waste stream s . Less than 1 percent of our clients choose the sorting solution, because it is more difficult for nurses. The non - sorting model has a few different options. The key differences are the number of waste stream s and container placement. Almost 100 percent of our clients choose the non - sorting model. The majority do not want to sort because they want a simpler program for nursing as they believe that nursing cannot properly

sort. With thousands of different drugs and hundreds to over 1,000 healthcare emplo ye es involved in handling pharmaceutical waste, these customers realize, often through sorting pilots, that sorting at the point of generation is not feasible nor compliant They

feel they are non compliant as hazardous drugs still make their way into the non hazardous bins . Our non - sorting option focuses on the one - container model, which we have found to be market neutral ( +/ - 10% lower /higher price than sorting). We have won many hospital contracts, several 25 - 30 hospital sy stem contracts, and dozens of 5 - 10 hospital sy stem contracts on this one - bucket sy stem. Our pricing for small facilities (i.e. phy sicians’ offices) is the same as for hospitals. Container placement options include: a) A locked box on the wall of patient rooms

– the most rare option b) A wor

kstation on wheels (WOWs or COWs)

– options a) and b) together account for 2 to 5 percent of hospitals ; these are easier options for nurses. c) All waste is brought to a central repository (medication dispensing areas or soiled linen closets) with container s – approximately 95 percent of hospitals use this option.2

S atellit e storage areas each have an 18 - gallon barrel with a liner inside to collect waste . There is typicall y one satellite storage area per hospital wing per floor. We try to keep a ratio of 0 .1 2 - 0 . 20 containers per bed per waste container, so we can have dozens per floor. A seven story

hospital with four wings would have 28 generation areas , plus additional containers in pharmacy , OR, ED and other departments . Waste is then brought to a primary

storage site (ty

pically in the basement) where it is combined or sorted. Eight to ten 18 - gallon barrels will fit into a 55 - gallon drum, which will then go to the incineration facility . The 55 - gallon drums are picked up on a weekl y or monthly basis, ranging from 15 drums a month for smaller hospitals to 40 drums a week for larger hospitals. Smaller facilities (e.g., phys icians’ offices) generall y have one primary storage area, but no separate satellite storage areas, and have drums picked up on a quarterl y or bi - annual basis. Pharmacies will give us a copy of their formulary , so we will know which have various D , U, and P - listed waste codes. Some hospitals will separate out these different waste codes in order to remain an S QG (e.g., sorting out P - listed waste codes). About 0.5 percent of clients, DOT outliers, do sort, for inhalers. We have found that 9 5%+ percent of aerosol hazardous waste is generated in pharmacies. 2. Q: What percentage of hospital waste comes from floor was te versus pharmacy waste? A: This is an estimate , but Ibelieve that pharmacy waste accounts for 10 - 20% of waste, and other departments (including the ER and OR) account for 80 - 90% of waste. 3. Q: Do hospital buy

or rent barrels? A: Hospitals buy

these containers at the start of collection, often from Covidien , Becton Dickenson or Clean Harbors, and they experience about a 10 percent replacement rate per ye ar (due to contamination or improper placement of medical waste into a container). Many hospitals don’t realize that they have cradle - to - grave liability . 4. Q: For RCRA - compliant hospitals, what percentage incinerate versus sewer? What percentage of phys ician’s offices/health clinics? A: To be RCRA - compliant , all hospitals must incinerate RCRA waste nat ionally . In some states like California, all pharmaceutical wastes must be incinerated, including non hazardous. We have noticed an increase in incineration recentl y, as opposed to sewering or placement with medical waste as more hospitals have started Ph armaceutical Waste programs. 5. Q: What are the average cost s of hazardous waste incineration? A: Our costs are below $1/pound for hazardous and non - hazardous waste or less than $2/pound for dual streams. 80 percent of our non - sorting clients pay between $155 and $225 per bed per ye ar, for full cradle - to - grave service including the sorting, containers, labor, and transportation. WOWs, COWs, and in patient room collection have higher costs, because more labor is necessary to collect all the bins . On the low end, customers3

who on package RCRA Pharmaceutical Waste pay between $10 and $25 per bed per ye ar. Customers wh o combine their hazardous and medical waste into a dual waste stream will pay

more in the $500 to $800 range per bed, because they have more volume and dispose of the waste at a higher rate . 6. Q: Under current regulations, manifests require wastes codes

– d o incinerators use these waste codes to track emissions or make sure they don’t violate any

regulations? A: We are required b y permit to look at this information. You have to look at the codes and know what you’re burning. Arsenic trioxide, a chemo drug of last resort, is the one pharmaceutical you have to separate out and make sure you don’t burn , although most hospitals do not have it . All waste is ty pically incinerated within 30 day s of receipt at the hazardous waste incinerator . Note: there is no QA/QC of blue containers (non hazardous), which go to medical waste incinerators as they are not RCRA regulated Part B facilities . 7. Q: How do hospitals ty pically manage primary and satellite storage sites? A: The on - site storage areas for 18 - gallon containers are considered satellite storage sites ; there may be as many as 75 to 100 storage sites per hospital. These will be consolidated into one main area (typically the basement), which would be the primary storage site. Smaller facilities may not have satellite storage sites, their 18 - gallon containers and main accumulation areas may

be in the same section of the facility . 8. Q: How do hospitals conduct training under RCRA Subtitle C? Who is trained (e.g. nurses)? A: The nurses typicall y get an awareness training program, where we will usually come in and train the trainer. We will spend 3 - 5 day s onsite, rotating through shifts, to assist with that. We will also make sure that the hospital’s environmental services staff are trained to move containers from the satellite storage sites to the primary storage facility (but not sort them) .4

**Follow -**  **up q**  **uestions per e**  **- mail from**  **Industrial Economics on**  **August 23, 2012** 1) Does the $1 to $2 per pound incineration cost estimate include transportation and other costs? The below $1 per pound for RCRA Pharma and below $2 per pound for Dual Waste does not include transportation and other costs. Those are variable based on options chosen as well as distance from local service center. 2) Does the 10 to 20 percent of waste that comes from pharmacies include pharmaceuticals sent to reverse distributors (i.e., for manufacturer credits)? No, those are inventory

items that are not included in this discussion. 3) Do hospitals also purchase the 55 - gallon drums to transport waste or are those included in the overall costs? I f so, do you know how much those cost? Yes, the hospitals do purchase the 55 gallon drums and they vary from $20 - 40 based on if they choose fiber or metal. 4) Can you provide an estimate of the cost of sorting (excluding transportation and incineration), a) if the hospital sorts on its own and/or b) Clean Harbors sorts? (possibly in terms of time in hours and materials) Generally it takes 15 minutes to properly sort an 18 - gallon container. So from a labor standpoint 4 containers would be sorted in an hour . If each 18 - gallon had 25 pounds of waste, that would be 100 pounds in an hour. Based on a fully loaded employee of a hospital at $25 per hour, that would be $0.25 per pound. Based on a contractor employee that is at $50 an hour that would be $0.50 per pound.