As we turn the page on the hottest year in recorded history, it’s clear that the climate crisis is a health crisis. Deadly heat domes, catastrophic floods, and choking wildfires take a growing toll on lives and health. Health care facilities are increasingly at risk from climate disruption and are struggling to adapt. Fortunately, funding is readily available to build infrastructure resilience — if hospitals take action now to access it.
Essential hospitals are critical first responders in the climate crisis
Leading medical journals have declared climate change the “greatest threat” to public health and that threat is unfolding in emergency rooms and health clinics nationwide. Clinicians face an ever-larger caseload of climate-related illnesses, from heatstroke to worsening chronic disease. Last fall, floods in Tennessee turned hospital corridors into whitewater rapids, while patients were rescued from the roof by helicopter. And extreme weather, along with chronically underfunded utility grids, has caused a dramatic increase in power outages in recent years. During these outages, lifesaving medicines go bad, electronic health records are inaccessible, and essential medical equipment — including ventilators — shuts down.
Essential hospitals are especially hard hit. Because climate change reveals — and exacerbates — social inequities, the people served by essential hospitals are also those most vulnerable. These facilities play an indispensable role in the health care system by treating people who can’t afford to pay due to economic hardship and by serving rural and historically underserved and marginalized communities. This critical role doesn’t come without cost. In 2023, essential hospitals provided nearly $9 billion in free or reduced-cost care and US communities faced 28 weather and climate disasters that each resulted in $1 billion in damages.
The good news is that essential hospitals — and the rest of the health care sector — can better serve patients and prepare for climate disruption by investing in sustainability and resilience. For example, efficiency upgrades can dramatically reduce energy use, freeing financial resources for patient care. Solar panels augmented with battery storage can keep the lights on — and the ventilators running — when the larger grid goes down. Also, the health care sector accounts for an estimated 8.5 percent of total US greenhouse gas emissions and hospitals are the second most energy-intensive facilities in the country. So, reducing hospitals’ energy use and emissions will lower climate risks for everyone.
Capital is available for resilience investments and the ROI is significant
Funding is available to make hospitals more sustainable and resilient. For many hospitals, strategies to better leverage existing real estate assets combined with funding from sources like utility grant programs and the Inflation Reduction Act (IRA) can unearth the capital needed for infrastructure and energy efficiency upgrades. The IRA made historic investments in climate solutions, prioritizing aid to low-income, rural, and marginalized communities. Essential hospitals, with their thin margins and vulnerable patients, have the most to gain from these investments. As of mid-January, $74 billion in IRA direct funds (i.e. grants) have been committed. Furthermore, many IRA programs and tax incentives remain available and popular, being successfully used for significant investments in districts all across the US and political spectrum.
The healthcare industry faces a daunting challenge and an unprecedented opportunity: balancing its critical mission of delivering the best patient care with thin margins and an expanding environmental footprint. Traditional healthcare facilities are notorious for their high energy and water consumption, significant waste generation, equipment and supply needs, and production of greenhouse gas emissions. Hospitals rank behind only food service and food sales facilities as the most energy-intensive commercial operations in the country.
However, a major paradigm shift is underway. Healthcare sustainability is no longer a “feel-good” initiative; it’s a strategic imperative and smart financial investment for forward-thinking health systems.
Benefits of Sustainability in Healthcare
Although the scientific data behind how decarbonization and sustainable practices are essential to protect health and planetary systems is becoming more irrefutable, the practical and economic benefits are driving operational changes among health system executives. Many people are unaware of the practical, tangible benefits of sustainability in healthcare that leading peers are realizing, which include:
Significant Cost Savings
Optimizing energy and water usage, building operations, waste management and reduction, and sustainable procurement practices translates to substantial financial savings. Upgrading to energy-efficient technologies, reducing water consumption, and implementing waste reduction programs can provide immediate cost savings and compound into significant reductions in operational costs over time. Boston Medical Center Health System — an organization pioneering best practices in healthcare sustainability management — is projecting to save more than $500 million by 2030, with $150 million of that attributed to energy related savings, through employing industry-leading practices and strategic interventions.
Boston Medical Center’s Energy Costs and Square Footage, 2011–2030
Data: Presentation by Robert Biggio of Boston Medical Center at the Sustainability in Healthcare Hackathon, Massachusetts Institute of Technology, Apr. 21, 2023. Source: Martha Hostetter and Sarah Klein, Greening the Health Care Safety Net: How Boston Medical Center Reduced Its Carbon Footprint Without Compromising Patient Care (Commonwealth Fund, Aug. 2023). https://doi.org/10.26099/0na0-8v90
Environmental Stewardship
The U.S. healthcare sector accounts for roughly 8.5% of the nation’s greenhouse gas emissions. By embracing sustainability practices that complement hospital operations, healthcare systems can minimize their carbon footprint, conserve natural resources, create more resilient supply chains, reduce staff and patient exposure to hazardous chemicals, and create more equitable access to health services across communities. This aligns well with growing public concern about climate change and its impacts on human health, positioning them as responsible corporate citizens.
Increased Asset Value
Sustainable building design and construction using energy-efficient systems, smart building controls, materials with lower embedded carbon, and features with lower environmental impact are increasingly attractive to patients, staff, and investors. This leads to improved property values and potentially increased revenue streams through building certifications (such as LEED or WELL) or attracting sustainability-focused partners. They also create ideal conditions for state-of-the-art healing environments.
Freeing Up Funds for Enhanced Patient Care
The cost savings achieved through healthcare sustainability management initiatives can be reinvested in areas that directly improve patient care and support health systems’ missions. This could include acquiring advanced medical equipment, expanding patient services, or recruiting, retaining, and training staff.
By focusing on less resource-intensive operational practices and energy consumption, healthcare systems can create a virtuous cycle: They can save money, improve the environment, protect human health, and improve their margins to invest in patient care delivery.
Strategies for Complete Healthcare Sustainability Management
Transforming a healthcare system into a sustainability leader requires a multi-pronged, strategic, long-term approach involving the following key steps:
Reducing Energy Usage
Lower energy consumption is the starting point for healthcare sustainability management. Hospitals may conduct a comprehensive energy audit to identify areas of high energy consumption by analyzing lighting systems, HVAC equipment, and capital equipment for opportunities to upgrade to more energy-efficient models and leveraging technology, like installing occupancy sensors in rooms to automatically adjust lighting, air exchanges, and temperature based on usage.
Audits and Engineering Evaluations
Another step is to engage qualified engineers and sustainability experts to perform detailed building audits. These professionals can analyze energy consumption patterns and recommend specific steps to optimize a building’s envelope, identify opportunities for natural lighting or ventilation, and assess the viability of integrating renewable energy sources into system portfolios.
Retro-Commissioning
This process involves reassessing and recalibrating existing building systems to ensure they operate at peak efficiency — in other words, a system tune-up. Retro-commissioning can significantly reduce energy consumption and improve system performance without requiring major infrastructure upgrades.
Identifying Electrification Opportunities
Engineering and facility leaders will also explore the feasibility of converting fuel-based equipment and building systems to electric alternatives. This can include replacing gas-powered boilers with electric heat pumps, transitioning to electric vehicle fleets for patient transport or facility maintenance, and using electric equipment and appliances. Electrification reduces reliance on fossil fuels and can result in increased energy efficiency, decreased carbon emissions, and lower operational costs across the life cycle — all critical steps toward decarbonization.
Green Building Design and Sustainable Construction
If new construction is unavoidable, it’s important to leverage proven green building principles to create resource-efficient structures that optimize energy and water efficiency, improve indoor air quality, use sustainable materials, and take advantage of natural light and ventilation to create healthier and more productive spaces for occupants while reducing operating costs.
Water Conservation
Energy use is only one facet of healthcare sustainability management. Health systems should also consider implementing monitoring and water-saving strategies, including low-flow fixtures, leak detection systems, and stormwater management, and educating staff on water conservation practices.
Waste Management
It’s also critical to minimize waste generation through careful purchasing, source reduction strategies, staff education on proper segregation, and implementing reprocessing, product take-backs, and recycling programs for appropriate waste streams. Prioritizing products with minimal packaging and encouraging responsible disposal can significantly reduce the environmental impact of your operations.
Sustainable Procurement
Supply chain and procurement leaders should integrate responsibly sourcing and sustainable procurement best practices into RFX processes. Efforts can include purchasing equipment with a lower total cost of ownership and energy-efficient design, buying supplies with high recycled content or bio-based materials, and working with vendors that use lower carbon manufacturing practices. These leaders should also look for products with third-party certifications, such as Energy Star, EPEAT, Ecologo, or GreenSeal certifications that meet environmental and social responsibility standards.
What’s Your Plan?
Doing nothing or business as usual is not an option. As the effects of climate change become more apparent and increasing regulations require businesses — hospitals included — to take steps toward more environmentally responsible operations, it’s important to formulate strategies now. The sooner, the better.
Keep two key considerations in mind:
Done correctly, healthcare sustainability is an investment with significant, measurable ROI and long-term profitability.
You don’t have to do it alone. The right experts with the right experience can help you identify opportunities and guide you through the process.
Embracing sustainability management in healthcare operations is much more than an environmental imperative; it’s a strategy that can significantly improve your financial performance, enhance your reputation, and position your health system for a more successful future.
Navigating the increasing complexities of healthcare sustainability can be challenging. To unlock your healthcare system’s full potential for sustainability, partner with an experienced sustainability solutions provider like Oakwell. Our experts can work with you to develop a customized plan, identify funding opportunities, and guide you through the implementation process, ensuring a smooth and successful transition toward short- and long-term wins and a more sustainable tomorrow.
Solving Complex Sustainability Challenges with Proven Expertise
The healthcare industry is at a crossroads. Whether mandated by governmental agencies or elective, sustainability is rising on the list of priorities for health systems nationwide. However, the challenge of maintaining financial performance can make the vision of sustainability seem especially difficult.
This is where the team at Oakwell, founded by leaders at Boston Medical Center Health System, an integrated health system anchored by an equity-led academic medical center, and Omicelo, a private investment group that invests in companies driving sustainability, is bringing creative and innovative solutions. Oakwell empowers healthcare systems to achieve comprehensive sustainability and real estate optimization through a holistic approach that optimizes financial health and environmental responsibility. Ultimately, Oakwell’s work with hospitals frees up capital that can be reinvested into patient care.
Many consultants are hired as short-term specialists to guide a company for a limited period of time. Oakwell’s approach transcends the traditional consulting model by becoming a dedicated partner throughout the entire sustainability journey.
We employ an expert team with vast experience in healthcare, real estate, finance, engineering, technology, and environmental sciences. This depth of knowledge allows us to create an all-encompassing sustainability strategy inclusive of real estate and infrastructure that is customized for each client’s unique needs and challenges. Whether working with a multi-state health system or a community hospital, Oakwell develops cohesive and comprehensive strategies that deliver measurable results.
A Single Source for Sustainability Implementation
Conventional approaches to sustainability require managing multiple vendors. Oakwell offers a full suite of services from the initial stages of research, in-depth assessments of energy use, waste generation, and operational practices to strategic planning that outlines a clear roadmap for achieving sustainability goals.
Beyond planning, Oakwell provides project implementation to ensure proper and timely integration into our clients’ operations. We also offer long-term monitoring to track progress and identify opportunities for additional optimization. This comprehensive approach minimizes disruption to patient care while achieving tangible results.
No Margin, No Mission: The ROI of Sustainability
One of the most common misperceptions of adopting sustainable practices in healthcare infrastructure and operations is that it will be financially overwhelming. While there is an initial investment, the long-term return is significant and measurable. Oakwell helps clients unlock cost-saving opportunities within their existing real estate portfolio by implementing solutions that have an attractive return on investment, have reasonable payback periods, and reduce the environmental footprint of the health system.
Oakwell provides its partners with creative funding solutions. Whether through our expertise with the Inflation Reduction Act, our deep knowledge of energy-related incentive programs, or debt financing options, we help maximize health systems’ ability to achieve their sustainability and real estate optimization goals. Our data-driven approach focuses on measurable financial savings — improving the bottom line while achieving sustainability goals. Hospitals can allocate valuable resources to improve patient care and other critical services.
Free Up Capital to Reinvest in Your Mission
Hospitals face constant pressure to balance financial health with providing exceptional patient care. Through a detailed analysis, Oakwell identifies opportunities to streamline your facilities through real estate optimization.
Streamlining may involve repurposing areas or implementing space-saving technologies, resulting in reduced operational costs and freed-up capital. These resources can then be reinvested in areas that directly impact patients, such as acquiring cutting-edge medical equipment, hiring additional staff, or expanding treatment programs.
Oakwell helps hospitals transform their real estate into a strategic asset, allowing them to focus on what matters most: delivering the best possible patient care.
Results Matter in Sustainability
Oakwell’s collaborative approach builds on the healthcare sustainability experts at Boston Medical Center Health System, an organization with a proven track record of more than $500 million in cost savings through sustainability initiatives. Together, we understand the nuances of healthcare real estate and take a comprehensive approach that optimizes a system’s entire infrastructure and property portfolio.
To ensure the optimal outcomes, our process is sequential and comprehensive, including:
Assessment & Strategy
To develop a customized plan, we thoroughly analyze a hospital’s energy use, waste generation, operational practices, and real estate portfolio.
Master Planning
We work collaboratively to define clear goals, identify impactful initiatives — from energy conservation measure scoping to complete decarbonization master plans with financing analysis — and establish a roadmap for implementation.
Engineering Oversight
Our team provides engineering and project management expertise to ensure each initiative meets financial and environmental objectives.
Financing
We can provide, discover, and leverage alternative funding solutions, such as grants, rebates, and debt financing, to make any sustainability strategy financially attractive.
Capital Project Delivery
Oakwell’s healthcare sustainability experts provide support throughout project execution, ensuring adherence to industry standards and best practices.
Long-Term Monitoring
We continue to partner with you after implementation, as the most effective sustainability plans require continuous monitoring to identify possible areas for improvement.
Healthcare Sustainability Experts Create a Healthier Future
At Oakwell, we believe in building a healthier future for both health systems and the communities they serve. We envision a world where healthcare delivery thrives alongside environmental responsibility. Join us on this journey by contacting Oakwell today. Schedule a consultation to discuss how our team can help your healthcare system achieve its sustainability and financial goals.
