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Weekly UpdatesLately, the proposed cap and trade policy, carbon taxes, and other regulations designed to lower energy consumption and emission have garnered a lot of buzz. Much of this publicity implies that "being green" is not just responsible but also fun and profitable. The literature on green hospitals touts the many benefits that may accrue as a result of this effort, including fewer medical errors, better healthcare outcomes and patient satisfaction, higher staff retention and morale, and greater operational savings. Probably the biggest advantage is that it positions the healthcare organization as a good neighbor, something that could bring in additional business.
The hard truth is, any scheme for reducing energy consumption and greenhouse gas emissions costs something--and sometimes, it is a lot. Considering that many healthcare institutions are currently on financial life support, the timing is less than optimal. How can a cash-strapped hospital implement necessary green measures but at the same time protect its income statement? This column offers several practical and low-cost approaches that healthcare organizations throughout the United States have taken.
MEASURE AND PAY ATTENTION
In his book Wandering Home, environmentalist Bill McKibben (2005) notes that his Toyota Prius led him to change his driving style. Because the dashboard displays the gas mileage, he learned how to drive more efficiently (and thus safely) to minimize his gas consumption. The point is that McKibben measured, paid attention, and saw results. Measuring and monitoring can reveal many ways to improve performance and save resources. Take water and energy use, for example. HCA Inc. measured water consumption in some of its facilities. This move detected leaks in some buildings and made HCA realize that repairing the leaks paid for the metering many times over.
Facility engineers should regularly monitor energy and water consumption, both at the site meter and at strategic points throughout the campus. In addition, energy and water use at healthcare buildings should be reported to Energy Star's free benchmarking system. This system provides a performance indicator that shows how one facility's usage compares with that of similar buildings in the area. This tool may uncover a low-hanging improvement fruit for the organization. For more information on Energy Star and the benchmarking system for healthcare, see www.energystar .gov/index.cfm?c=healthcare.bus_healthcare_benchmark.
SET AN EMISSIONS BASELINE
Setting an emissions baseline is a low-cost activity. It entails performing a greenhouse gas inventory and then registering that data; for more information, see www .theclimateregistry.org. The baseline serves as the basis for the emissions-reduction target or goal. Having a baseline allows a healthcare organization to take advantage of Voluntary Early Action provisions of any greenhouse gas regulation in the future. Also, a baseline enables the organization to sell carbon offsets on one of the current voluntary exchanges (usually through an aggregator). Carbon offsets result from the energy efficiency measures the organization has taken. Without a baseline, claiming those offsets is impossible. More important, a baseline helps guide the planning for future energy-reduction actions. Also, in the event that cap and trade comes into effect, this baseline can be the original baseline (not the one taken later after various energy-saving measures have been implemented).
MAINTAIN AND OPTIMIZE ENGINEERING SYSTEMS
Often, the engineering systems (i.e., mechanical, electrical, and piping systems) in hospitals operate far below maximum efficiency. Such performance is caused by lack of education, poor installation, poor maintenance, desire to appease or minimize complaints, and competing priorities, among other factors. Making these systems perform at high levels requires only a small operational expense, not a capital investment. The report, Energy Performance of LEED for New Construction Buildings, shows that older buildings with well-functioning engineering systems can outperform new, green facilities (New Buildings Institute 2008).
TAKE ADVANTAGE OF AVAILABLE GOVERNMENT INCENTIVES
Many incentives are available to businesses, organizations, and even individuals to lower their energy consumption. The 2009 economic stimulus package allocated billions of dollars to energy and environmental projects. Various utility companies offer incentives as well. Unfortunately, much of these incentives are unclaimed. Healthcare institutions should aggressively pursue these resources and use them to fund building renewal needs and energy performance improvement. For a listing of many such incentives, see www.dsireusa.org.
PRACTICE RETROFITTING
Certain energy-saving technologies, such as lighting retrofits, are relatively inexpensive and pay for themselves within a short time. An existing facility may be retrofitted with energy-saving lighting and equipment, along with use of building controls (especially lighting controls) and motor improvements (such as the addition of variable frequency drives or premium efficiency motors).
BUY GREEN ENERGY
Many states allow customers to buy energy from the provider of their choice, and this practice will likely continue in the future. Hospitals and health systems can, for little cost, opt to purchase a percentage of their energy from a "green power" provider. Green power is produced by renewable sources such as wind, solar, and geothermal. Hospitals can keep the cost of such energy competitive by using reverse auctioning, a technique that creates competition among suppliers and thus drives the prices down. This approach prompts energy providers to offer or develop green power, which moves the world in a positive direction. For more information on green power, see www.practicegreenhealth.org/tools/hcee.
USE ALTERNATIVE FINANCING AGREEMENTS FOR ENERGY PROJECTS
For many years, organizations have used energy performance contracting in building renewal projects. In this method, the organization signs an agreement with an energy service company to find energy-savings opportunities and to suggest improvements in existing engineering systems. The contract includes a guarantee from the service company that the new systems or retrofits will generate savings and thus cover the cost of the project. If those savings do not materialize, the service company is responsible for paying the difference. This contract is an off-balance sheet arrangement.
A new twist on this idea is the power purchase agreement. Here, the organization signs a deal with an energy supplier, which will in turn install the equipment for renewable energy source on the organization's site. The organization simply buys the power generated by that equipment or source for a specified number of years. This arrangement falls under off-balance sheet financing as well. More important, it allows the organization a fixed utility cost for a long period.
CONCLUSION
The call to be green will only get louder. Although environmental regulations will raise energy costs to discourage consumption and emissions, they will present more opportunities for saving money and offer rewards for energy conservation and system efficiency. Already, more U.S. districts are legislating greener hospitals. In addition, more people care about this issue: Doctors, nurses, other caregivers, managers, and support staff want to work in environmentally responsible, sustainable facilities. Patients, their family, and the community at large expect their neighborhood healthcare provider to join this movement.
Leaders of a healthcare organization (whether it is a hospital, health system, or a specialty clinic) should show all of their stakeholders that, as guardians of public health, they understand the relationship between personal and environmental health. The strategies discussed in this column can improve the organization's energy performance and healthcare outcomes without degrading the bottom line now and in the future.
REFERENCES
McKibben, B. 2005. Wandering Home: A Long Walk Across America's Most Hopeful Landscape: Vermont's Champlain Valley and New York's Adirondacks. New York: Crown Publishing Group.
New Buildings Institute. 2008. Energy Performance of LEED for New Construction Buildings. [Online report; retrieved 5/1/09.] www.newbuildings.org/downloads/Energy Performance of LEED-NC_Buildings-Final_3-4-08b.pdf.
Walter N. Vernon, principal, Mazzetti Nash Lipsey Burch, San Francisco
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