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Rules, Regs, Planning Needed When Going From Shred to Med


While document destruction companies may be well positioned to expand into the medical waste industry, careful planning and a clear understanding and knowledge of the rules and regulations of that market are essential for success, according to experts in the field.

Issues ranging from how to break into a market that is dominated by one player to figuring out where to have medical waste treated are among the challenges, not to mention having to deal with federal and varying state regulations.

“It’s not that complex,” says Alan Rosenauer, president and publisher of Compliance Publishing Corp. “You just have to do your homework. There are very specific rules for hauling medical waste. You have to make sure that you’re following those rules.

“They are not daunting,” says Rosenauer, whose Edina, Minn.-based company provides state and federal regulatory information to more than 55,000 customers worldwide. “You just have to make sure you follow them correctly and don’t take any shortcuts. If you follow it step-by-step, there’s no reason why any company can’t start a medical waste business.”

But, he adds, “Nothing is as easy as it looks. If it was that easy, everybody would be doing it. It‘s not like you can go out there, put out an ad and say, ‘Okay, I’ll pick up your medical waste’ and a whole bunch of people will just come flocking to you.”

Among the barriers that shredding companies need to overcome when attempting to get into the medical waste industry is dealing with tighter insurance regulations due to the fact that they will be handling a highly regulated material. They also will need to provide blood-borne pathogen training for their employees, and will have to understand rules surrounding manifests, including the requirement to retain those documents for three years.

“If you’re just dealing with a few hundred pieces of paper, fine,” says Rosenauer of those manifests. “But when you have hundreds of customers, over the course of a year you’re dealing with thousands of these documents . . . Because it’s a highly regulated industry, you basically have to file a lot more paperwork.”

Regulations can vary from state to state, with some, such as those in California, being more stringent.

“Each state has its own requirements,” notes Roger Thielman, a sales representative with LB Medwaste Services of Wausau, Wis., which serves a five-state area in the Midwest.

In Illinois, for instance, medical waste must be picked up within 30 days once a container is full; in Wisconsin, the time frame is 90 days. LB Medwaste has some 1,300 clients in Wisconsin, Illinois, Minnesota, Michigan and Indiana. It can process 24,000 pounds of medical waste daily in its two autoclaves.

“Our customers rely on us to make sure they’re compliant so they’re not responsible for any fines if they get inspected,” Thielman says.

One of the biggest issues for companies handling medical waste is Department of Transportation compliance, he says.

“With shipping and transporting of medical waste, there’s a lot more restrictions in terms of the containers that are used, how it’s packaged, how it’s handled and also the documentation,” he notes.

Shredding companies that are already providing document destruction services to medical facilities may have an edge in securing medical waste disposal contracts. In the case of LB Medwaste Services, it has been serving the medical waste industry since 1989 and moved into the document destruction business about five years ago, offering off-site shredding to clients in Wisconsin.

Thielman says that if businesses trust LB Medwaste to dispose of their medical waste in compliance with federal and state regulations “then they’ll trust us with their documents.”

The same is true for shredding companies handling medical records under HIPAA (Health Insurance Portability and Accountability Act) privacy rules, Rosenauer says. “It’s definitely a logistical extension,” Rosenauer says. “They [shredding companies] are already at the doctor’s office. Why not pick up the medical waste as well. It just makes sense.

“Your current customer is always your best customer,” he adds. “It’s the easiest customer to get. With the barriers going down and profit margins going up, it’s one of those no-brainers if you do it right.”

Thielman agrees.

“Being able to turn to one company that has all the answers and can meet all their needs is much easier than having to source things out among two or three different companies and it’s very cost-effective, too,” Thielman says. “We’re already servicing the customer. We know them well. We can add additional services that make us money and save them money. It’s definitely a beneficial step.”

Even though one company controls about 80 percent to 85 percent of the medical waste market, Rosenauer points out that its high profit margin provides an opening for others to enter the arena.

“It gives others who want to come into the market a very large margin to play with,” he says. “It used to be you had to have 1,000 customers to make a go of it. Now, because the margins are so much larger, you can be fairly profitable with 100 to 150 customers, so the number of customers required to break even and become profitable has actually gone down.

“It’s given companies who wish to enter the market a lot more opportunity and still maintain margins,” Rosenauer says.

The cost of entry into the market has also come down. Those getting into the medical waste business will typically arrange to have a third-party process the waste, Rosenauer says, rather than investing in an autoclave, which can cost several hundred thousand dollars.

“It’s not something to be taken lightly,” he says of installing and maintaining an autoclave. “Few companies start with creating their own facilities and will take it [medical waste] someplace else for treatment. Even the very largest places will use other companies to treat medical waste. It doesn’t make economic sense for everybody to have their own system.”

Document destruction companies aren’t the only businesses looking to grab a piece of the medical waste market. Laundry companies which service hospitals, nursing homes, doctor offices and other medical facilities are among those moving into the medical waste area.

The overlap between the document destruction and medical waste industries has prompted a combined security shredding and medical waste conference Nov. 10-12 in Orlando, Fla. The conference at the Omni Hotel Championsgate Resort will include sessions designed to help security shredding companies move into the medical waste area. Both Rosenauer and Thielman say the concept of a combined conference will be helpful to both shred companies and medical waste firms.

“It makes a lot of sense, especially when you can combine the two into a single show,” Rosenauer says. “You have the shredding companies learn from the medical waste companies and vice versa.

“When you put it into a single show, you can bring together all these shredding companies in one venue and explain to them the steps to get into the medical waste market and here’s why it may or may not make sense for your exact situation,” he says. “If nothing else, it’s a great way of bringing together a lot of people at one time and really explaining on a step-by-step basis how to get into the medical waste market and to let them decide if it makes sense for them.

“From what I’ve seen, it makes a lot of sense for them,” he adds. “It’s also going to depend on the competition within their specific areas. Some areas are a lot more competitive than others. And like any other company, you have to be a well-run company to make a go at this. It isn’t that easy.”

Rosenauer notes that the conference should also benefit medical waste companies who may be looking at getting into document destruction.

“If shredding companies can go into the medical waste market, the medical waste companies can go into the shredding market,” he says, adding, “It’s a lot easier to go from medical waste to shredding than vice versa.”

Thielman says LB Medwaste learned about the shredding side of the business through networking, contacts in the solid waste industry and through equipment manufacturers. LB Medwaste originally began as LB Trucking and was a garbage hauling company until that part of the business was sold off, with the owner retaining the medical waste portion. “We did a lot of research to determine what would be the best fit,” Thielman says of getting into the shredding business.

As for a combined shredding-medical waste conference, he says he expects there would be a lot to be learned in such a setting. It would, he says, provide an opportunity to talk with others “to see what works well and what doesn’t.”

LB Medwaste recently added a hazardous waste service to its pickups, which grew out of speaking with other medical waste providers at national solid waste conventions, he notes.

“I think it is definitely beneficial,” he says of the upcoming Florida conference. “You have the breakout sessions. You can talk about what’s going well in other parts of the country with medical waste providers, see what problems they have and how they’re overcoming them. You also can hear about new regulations, how to meet them, and what effect they’re going to have on both customers and companies.”

(For more information about the 2013 Security Shredding & Medical Waste Conference, contact Cory Smith at This email address is being protected from spambots. You need JavaScript enabled to view it. or call (678) 822-9804)

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