The healthcare industry – medical centers, hospitals, senior living communities – has unique operational needs. Energy and water are critical, high-use resources and therefore account for a large slice of operational expenses. Responsible waste management is also high on the list of priorities as federal, local and municipal regulations become more stringent and carry the risk of crippling fines and reputational damage for noncompliance.
With all these challenges, you might think that high resource use is simply the cost of doing business in an industry where “cutting corners” can have detrimental, costly effects. However, there are plenty of opportunities for the healthcare industry to be more sustainable in its operations and daily practices, and as a result, more profitable.
The Low-Hanging Fruit of Savings and Sustainability: Energy and Water Efficiency
Take a senior living facility for example. Reducing resource use in their environment can be an immense challenge. Here, residents control their own energy and water use, have independent practices for waste, and may not be mindful of the community’s sustainable operations goals.
Brookdale Senior Living provides one example of a strategic approach to energy management, and it starts at the source: energy procurement. By evaluating their risk profile, evaluating the market, and developing a hedging strategy, Brookdale was able to enter into multiple fixed price agreements in deregulated markets, which optimized cost and reduced risk. This and other collective efforts – including contract management and ongoing audits – presented Brookdale with an estimated $1.1M savings in deregulated markets in just the first year.
After this success, the company turned to improving on-site energy efficiency. They hired a dedicated energy manager to help capture data through energy performance reports and outlier analysis, enabling them to pinpoint energy efficiency projects to further reduce energy demand by 10 percent over two years.
Where should you start?
While there are actions to take on both the supply and demand side of energy, water presents a different challenge. A safe and secure water supply is essential in a healthcare environment for daily washing and cleaning. And while companies in some markets can obtain ideal energy rates, there is no such option for water – in fact, scarcity and rising infrastructure costs are leading to water prices rising much faster than the price of energy. Circleofblue.org tracks water rates in 30 major U.S. cities and has reported that water costs have increased by an average of 50 percent in the last nine years.
Some water-saving tactics include:
- In facilities with individually-controlled rooms or units, companies can focus on water efficiency projects that are relatively low in cost but automatically remove the burden from residents and employees.
- Examples include low-flow showerheads, faucet aerators, and low-flow toilets.
- Outside, irrigation controls for landscaping can control when and how much water is used to balance the need for a pleasant environment and water conservation.
All of these solutions create automatic savings. And in areas where restrictions are placed on water use, they help mitigate the risk of fines or penalties.
Controlling Expenses and Mitigating Risk: Waste Management
In healthcare facilities, the purpose of waste management is three-fold. One, negotiating hauler contracts and optimizing bin sizes saves on costs. Two, diverting waste from landfills and increasing recycling or composting rates helps meet sustainability goals. And three, knowing what is in your waste ensures compliance with increasing regulations across the U.S.
Holiday Retirement is an example of a facility that has bucked the trend over the years for increasing waste disposal rates. Through professional management of contract negotiation and service-level optimization, they have managed to offset inflation and thwart ‘service creep,’ reducing their annual $2.6 million waste disposal costs by 13 percent.
Healthcare’s biggest risk with waste is uncovering what shouldn’t be there. Each site must deal with unique hazardous waste and privacy regulations, from General Data Protection Regulation (GDPR) to industry-specific state, local and federal regulations. Many healthcare organizations have made headlines for multimillion-dollar violations resulting from improper disposal of medical waste, hazardous waste, and protected health information. In the past six years alone, the Office of Civil Rights, the enforcement agency of HIPAA regulation, has received more than 180,000 complaints and initiated over 891 compliance reviews. In 55 cases, it has imposed collectively more than $78.8 million in fines on pharmacies, medical centers, and doctors’ offices.
Waste audits are an essential component of a strong privacy and compliance program. Proper documentation of your findings reveals greatest areas of risk, provides evidence of implementation, and measures ongoing program effectiveness. Today, this documentation is more important than ever, helping to not only minimize violations, but lessen fines should violations occur.
Here’s How to Tie Resource Management and Sustainability all Together
A successful, holistic sustainability strategy takes place within in the nexus of energy, water and waste. Because you can’t manage what you don’t measure, leveraging cost and consumption data from utility bills, usage data from equipment sensors, and quantitative and qualitative observations from waste audits can help you set baselines, establish goals, and track progress along your sustainability journey. By touching all areas of your operations you’ll see a greater return.
Sustainable operations are especially important in the healthcare industry. When everything is running well, it improves the functionality and comfort of the facility, enhancing care, and meeting the greater good of residents, patients, and employees.
What Does a More Sustainable Future Look Like?
The sustainability transformation for organizations will look a lot different in the future. It’s no longer sufficient to simply set goals for ‘someday’. Organizations must think about adopting sustainability at a greater speed and scale. Energy, water, and waste are just a few areas in which the healthcare industry can accelerate their sustainability efforts and benefit from the long-term savings. As resources become more regulated – and more expensive – establishing a strategy now will set you up for sustainability success.