Addressing healthcare's energy and climate change challenges
Rapidly accelerating climate change, caused by greenhouse gas emissions from the burning of fossil fuels, is resulting in dangerous environmental events and serious public health consequences. In its recently released Fourth Assessment Report (http://www.ipcc.ch/pdf/assessment-report/ar4/syr/ar4_syr.pdf), the Intergovernmental Panel on Climate Change (IPCC), the leading authority on Climate Change, recently concluded that global atmospheric concentrations of carbon dioxide, methane, and nitrous oxide have increased markedly as a result of human activities primarily because of the burning of fossil fuel.
Results from the 2003 U.S. Energy Information Administration survey (http://www.eia.doe.gov/emeu/cbecs/cbecs2003/detailed_tables_2003/detailed_tables_2003.html) illustrate that buildings are responsible for almost half of the energy consumed in the United States and 48% of all greenhouse gas emissions. Inpatient healthcare facilities use approximately twice the energy as office buildings of the same size, second only to the food service industry in energy intensity. Clearly, the healthcare industry's intensive use of conventional energy contributes disproportionately to the public health consequences of human-induced climate change.
According to the World Health Organization (http://whqlibdoc.who.int/publications/ 2007/9789241595674eng.pdf), climate change contributes to a range of complex health impacts because of extreme weather events and the wide-ranging health impacts of air pollution. A recent study by ABT Associates in Massachusetts found that coal- and oil-fired power plants in the state are responsible for: 441 premature deaths, 313 hospitalizations, 8,880 asthma attacks, and approximately 78,000 lost work days from respiratory problems alone. The study also cites additional impacts of ground-level ozone, acid rain deposition, mercury contamination, and proportional contributions to climate change.
Increasing public concerns about climate change—and its potential health, economic and security consequences—are helping to shape healthcare's attitude toward climate change. The American Public Health Association (APHA) recognizes this risk and issued a new policy statement last November (http://www.apha.org/advocacy/policy/policysearch/default.htm?id=1351), stating that the long-term health threat of climate change is extremely serious, and that greenhouse gas emissions are primarily responsible for this threat.
The APHA resolves that healthcare professionals and organizations should implement mitigation strategies that minimize greenhouse gas emissions, and adopt strategies to effectively address the resulting health consequences of the environmental damage that is occurring.
At the same time, energy costs have surged dramatically and put significant financial strain on hospitals. In some areas in the United States, energy costs have grown by more than 60% in the past few years. The price of oil recently surpassed $100, and this steep upward trend is expected to continue.
In spite of the proven environmental damage and cost associated with healthcare's energy practices, energy issues have historically been relegated to a secondary consideration. Fortunately that is changing. Recently, the healthcare sector began a dramatic transformation in its core practices in response to the scientific confirmation of the link between climate change and certain diseases. Since hospitals both witness the health-related “collateral damage” of climate-change impacts, and contribute disproportionately to climate change as major energy users, many healthcare providers are acknowledging an ethical mandate to alter this picture by becoming leaders in addressing climate crisis while simultaneously managing energy budgets.
At Practice Greenhealth, a new nonprofit organization that is helping the healthcare industry deal with environmental challenges, we believe energy costs should be reduced to create the financial bandwidth to manage and reduce the carbon footprints of healthcare facilities. It has been estimated that billions of dollars are wasted annually because of ineffective energy procurement programs and outdated building systems. While many healthcare facilities have tried to improve the efficiency of their energy use, far fewer focus on how well they purchase the commodity itself. Ironically, with resellers' margins and energy stocks soaring to new record highs, the cost of energy procurement has remained stubbornly fixed, and many buyers believe it can't be reduced. In fact, the makeup and cost of energy is among the most misunderstood issues confronting our society, and industry leaders must embrace a more informed, socially responsible policy. The Healthcare Clean Energy Exchange is a new national program that embodies a new, innovative approach to energy procurement for the US healthcare industry.
The Healthcare Clean Energy Exchange (HCEE)—available through membership in Practice Greenhealth—can assist healthcare facilities in reducing energy costs between 6-12%, while reducing the facility's carbon footprint. Powered through a unique collaboration with World Energy, the nation's leading procurement platform for electricity, natural gas and green power, the HCEE will provide senior management all the information required to aggressively manage their energy costs and reduce their carbon footprint. As deregulation continues to complicate generic energy procurement, taking advantage of cost savings within the ever-changing landscape of market rules and regulations can represent a nearly impossible challenge for senior management.
Now, healthcare procurement staff can be freed from the burdens of the all-too-slow, paper-based bid process generated by even a single RFP. Now they can put strategic time into overseeing a process built on the latest opportunities in risk management, real-time online auction process, and multiple track price discovery research. All this and more will drive energy and procurement process prices downward.
The platform powering the HCEE has enabled state and federal clients to win nine national awards, including the 2005 Outstanding Program Award for leadership and innovation awarded by the National Association of State Chief Administrators. The HCEE's real-time market intelligence in more than 100 utility markets and innovative procurement technology will now arm our nation's healthcare industry with the de facto standard for energy procurement.
Most importantly, the HCEE will allow all participating hospitals and health care facilities to aggressively pursue socially responsible, strategic energy plans. Empowered by the same proprietary technology that has saved 20 federal agencies, numerous states, and Fortune 500 companies hundreds of millions of dollars on their generic energy procurement, the HCEE mission is to procure electricity and natural gas at the lowest possible market price and create the “fiscal bandwidth” for green power procurement within existing budgets. HD