Are Long-Term Medical Waste Management Contracts Necessary?
Doctors understand that their offices and facilities create biohazardous waste that must be disposed of properly and safely with a hazardous waste disposal company. However, not all doctors realize how many options they have regarding businesses to dispose of that waste. Due at least in part to lack of information within the industry, many doctors' offices needlessly become locked into long-term medical waste management contracts. While waste contracts are largely the norm, they are not the only option—and they are certainly not the best financial option.
Problems With Long-Term Medical Waste Management Contracts
What Makes These Contracts Undesirable?
There are several main reasons a long-term contract with a waste management company offers few to no benefits to the medical facility.
Stringent Wording and Stiff Penalties
The contracts associated with these companies that help dispose of doctor office and hospital waste are often highly legal, highly polished documents. These companies get doctors to agree to sign the contracts, which can then tie the doctors into five-year obligations. The contracts stipulate that the doctors must pay the monthly fee for the duration of the contract, but the termination fees are where doctors are really hamstrung.
Getting out of that meticulously worded contract can mean paying upwards of half the monthly fee for the remainder of the contract. Considering the doctors will have to seek out alternative means of properly disposing of their waste, it often becomes unrealistic to shoulder those termination fees.
Lack of Control Over Pricing
These contracts are also carefully crafted to benefit the waste management company. In particular, the wording often states that the company reserves the right to increase the price of its existing service at any time—and this is a right these companies do exercise. Even though the price of the service changes, the contract wording stays the same. Doctors are still liable to pay every month, even though they signed the contracts and accepted their terms at lower prices.
It's quite standard for these companies to send new agreements to their clients after two or three years within their initial contracts. Unless these documents are read and reviewed very carefully, doctors can inadvertently end up signing contract renewals. This means they are locked into new five-year medical facility waste contracts—with all the same penalties in play. Because that wording is essentially hidden and buried within the contracts, doctors aren't even always cognizant that they've renewed. This leads to some unpleasant surprises when they think they're finally free of the contracts only to learn they actually renewed.
What Are Contract Alternatives?
If contracts offer little to no benefit to the doctors, what are viable alternatives to disposing of all waste? The best way around contracts is a medical facility waste service agreement, which is an agreement to use the services of a reputable, legal, safe medical waste management company. That company provides the same service, but doctors aren't locked into long-term medical contracts, and they aren't subject to severe financial penalties for terminating medical facility waste management services.
Why Does a Service Agreement Make More Sense?
On top of avoiding early termination fees, waste service agreements often make more financial sense on a monthly basis. Companies that use contracts often charge a flat fee to all customers, regardless of size or how much medical facility waste is created. That tends to lead to a culture of overcharging. Considering most doctors' offices only create a couple boxes of medical waste a month, it just makes more sense to only pay for what you need (i.e., per box of waste or a more manageable flat fee without the threat of steep termination penalties).
For more information about the relative pros and cons of service agreements versus contracts in the medical waste disposal industry, please contact a representative of Medical Waste Services, LLC that provides professional medical facility waste services.