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When Dusanka Filipovic formed Blue-Zone Technologies in 1999, she knew its unique clean technology could capture the attention of global markets.

Ontario's hospitals spend $20-million a year on the chemicals that induce anesthesia during operations, only to vent 95 per cent of them into the atmosphere. Blue-Zone says these greenhouse gas emissions equal the annual exhaust output of 30,000 cars.

The Concord, Ont., company captures the gas not used by the patient in special canisters and recycles it so it can be sold back to hospitals, at reduced cost, in its pure liquid form. This lowers expenses for hospitals and keeps anesthetic chemicals and greenhouse gases out of the air.

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"From the beginning, it was very clear it would more than just benefit the company - it would benefit the entire world," says Ms. Filipovic, the company's president and chief executive officer.

Ms. Filipovic, an engineer, founded Blue-Zone using intellectual property she co-developed while working for Union Carbide Canada (now Praxair Canada Inc.) and with help from the Department of Anesthesia at the University of Toronto.

Blue-Zone's patented Deltasorb system was tested over five years in 150 operating rooms in 14 Ontario hospitals. The pilot project was financed with $2.7-million from Sustainable Development Technology Canada, a not-for-profit federal program.

The money ran out in February, but two hospitals in Eastern Ontario continue to use the technology, sharing the costs with Blue-Zone. Ottawa's Children's Hospital of Eastern Ontario and Peterborough Regional Health Centre are paying $90 of the $300 monthly service while Blue-Zone is shouldering the rest of the cost.

Blue-Zone assures subscribers that, within two years, they will reduce their anesthesia costs by 25 per cent once the company builds a stock of recycled gas.

But hospitals have been reluctant to sign on, though Blue-Zone says the amount eventually saved would dwarf the costs of the service.

Blue-Zone's service includes weekly maintenance and removal and recycling of anesthetic gases.

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The gases are collected in special canisters, which are taken to its plant in Concord, where its staff separate the gases and distils them into their original liquid forms. The liquids are then returned to operating rooms.

Blue Zone says adoption of the technology province-wide would allow it to create 100 jobs and also develop a new industry for Canada: the remanufacture of anesthetic gases.

None of the chemicals used in the $1.1-billion global market are made in Canada, Ms. Filipovic notes.

Blue-Zone is now lobbying the Ontario government for creation of a rebate program to help hospitals buy its services, and allow the company to build a critical mass of gases.

If the technology were offered province-wide, Ms. Filipovic estimates hospitals would save more than $5-million on the $20-million annual cost of anesthetic chemicals.

"It's not cost-prohibitive, and this is an investment in the future with immediate and long-term rewards," Ms. Filipovic says.

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Once Blue-Zone is widely used in Ontario, she says, the company aims to spread its services across the country and around the world.

What the experts say

Blue-Zone's technology and service sound promising, says Davis Hill, manager of commercialization at PARTEQ Innovations, which commercializes intellectual property arising from research linked to Queen's University, in Kingston.

However, she warns that technology exclusivity doesn't necessarily mean market exclusivity. Blue-Zone should ensure its intellectual property is fully protected, or it could lose out to a larger player that has not yet developed the relevant technologies.

Small companies often have trouble convincing hospitals they can deliver in the long term, she says, and "we've seen cases where a large player would win a contract based on ... no ready product but a proposal of how to get to a product, while smaller competitors with existing products would lose out because they just didn't have the weight behind them."

When making its pitch to hospitals and the Ontario government, Blue-Zone will have to play up the return on investment it will provide, and not necessarily the environmental advantages of its technology, she says.

"The whole system is cash-strapped at the moment ... so they'll need to know how it will save them money in the long term," Ms. Hill says.

Blue-Zone will also need internal champions within hospitals, perhaps doctors or hospital finance staff. "There's a convincing job to be done with the Ministry [of Health] and it depends on how well connected they are into that system already," she says.

As a small, relatively unknown player, Blue-Zone also should consider doing business through a larger vendor with an established reputation, she says.

But larger companies may not be interested in dealing with a new commercial product, says Leonard Lee, chairman of Lee Valley Tools and president of Canica Design Inc., which makes surgical instruments and devices to close wounds.

"The problem will be finding a firm that wants its representatives' time diverted from products that sell, to a product that may not sell," Mr. Lee says. "It's a good idea, but who are you going to get to do it?"

One of Blue-Zone's biggest challenges in dealing with hospitals is that they can't change their budgets without permission from the Ministry of Health. Blue-Zone will have to persuade the department to create a line item to allow for the recycling of anesthetic gases, Mr. Lee says.

To earn government support, Blue-Zone must convince officials of the cost savings and health aspects, Mr. Lee says. Unlike Ms. Hill, he says Blue-Zone should be pushing the technology's environmental benefits: "It will have to be proven that it's healthier, that it's necessary, and that the amount of gas in the air is sufficiently toxic that it should be removed."

The effort will be challenging, Mr. Lee says. After all, venting into the atmosphere is free, and hospitals are under more pressure than ever to keep down expenses.

***

In a nutshell

Demonstrate the real cost

savings for individual customers, as well as the overall environmental benefits, in order to get cash from government.

Consider partnering with a larger, more established

company to create credibility.

Seek champions within potential customer organizations, such as physicians or financial departments, to praise your company to those who hold the purse strings.

Protect intellectual

property so that larger

companies don't beat you to the punch.

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