• Industry: Healthcare
  • Type: Business and industry issue
  • Date: 6/28/2012

Improving energy and resource efficiency 

A growing number of healthcare facilities are exploring innovative approaches to impact their long-term cost structure by creating better alignment between hospitals and the natural environment. Many are relatively simple yet carry significant impact. Retrofitting is a prime example: by improving the efficiency of air conditioners, installing energy-efficient lighting systems and reducing reliance on fossil fuel energy sources, hospitals can significantly reduce their carbon footprint.

At the Royal Free Hospital in the UK, the implementation of a Combined Heat and Power (CHP) plant and the installation of three new boilers – plus a number of smaller adjustments such as low voltage distribution boards and lighting updates – resulted in annual energy savings of EUR1.8 million per annum. The project provided a return on the investment after just seven years and allowed the site to increase its energy security and meet its sustainability targets.

In the developing world, the Brazilian energy holding company, Companhia Paulista de Força e Luz (CPFL), developed an initiative in 2002 to reduce the energy costs and carbon footprint of more than 100 hospitals in the state of São Paulo. The program implemented simple energy-saving measures such as the installation of energy-efficient lighting and the modernization of circuitry that reduced energy use by 25 percent.

Others are looking at realigning their non-clinical costs by improving overall efficiency and enhancing sustainability. For example, by purchasing food and services from local sources, hospitals can reduce carbon emissions related to transportation and delivery, while reducing water use in laundry and facilities management can also generate important savings.

Public Private Partnerships will be a critical response to healthcare sustainability

Creating a sustainable healthcare system is a significant challenge. Existing healthcare facilities will need investment to become more energy efficient, while new infrastructure is likely to be built to more exacting requirements. Governments and system administrators will need to play a leading role through increased investment, supportive policy development and innovative solutions. But there is also a role for the private sector to play.

Over the past two decades, governments have increasingly come to recognize that the burden of infrastructure provision is not one they can meet alone. Government health departments generally do not have the capacity to provide all of the skills and expertise necessary to handle large or complex construction or technology projects. The private sector therefore has a role to play in terms of:

  • bringing specialist expertise in these areas
  • managing large and complex risks within programs
  • underwriting its own performance through bearing those risks and providing finance to projects.

A key issue for government is therefore how to get value from these arrangements. Competitive tendering of Public Private Partnership (PPP) contracts is one way to do this.

The development of new facilities also offers ample opportunity to reduce the cost and environmental impact of healthcare. Most hospitals built under a PPP model now include stringent sustainability requirements, particularly in relation to energy efficiency and the use of sustainable building materials. Indeed, a growing number of contracts now include specific requirements that are designed to enhance long-term sustainability, while setting targets for energy and cost reduction. Contracts for services and infrastructure development can be structured to directly reward sustainability outcomes and, as a result, provide incentives for greater performance and innovation in sustainability.

Care in a changing world: conclusion

Making our resources work harder

Given all of the sustainability impacts that are now facing the healthcare system, it seems clear that these challenges will compound the fact that there is simply not enough money or capacity to respond to the critical need for health services.

As a result, we need to make the financial and human resources that we have at our disposal work harder and more effectively to respond to the challenges ahead.

That means that we need to explore new approaches to the delivery of health. We need more collaboration between public and private organizations to help build infrastructure and develop innovative programs to improve the delivery of care. We need to think differently about the way we approach service delivery by harnessing new technologies. And we need to re-examine the efficiency of our health systems and infrastructure to make better use of water, energy and waste management to reduce the cost and environmental impact of healthcare.


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