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Eco-Friendly Strategies Plant Seeds for Long-Term Savings Among Hospitals

In the past couple of years, 149 hospitals saved $55 million as a result of developing and implementing environmentally friendly initiatives. So why are more and more health providers going green and what’s behind this rising trend?

David Sheon

David Sheon

“Increasingly health care leaders are recognizing the critical role environmental stewardship plays in quality health care,” said Janet Brown, Director of Facility Engagement, Practice Greenhealth. “Going Green is moving beyond the blue bin by the photo copier and in alignment with other strategic priorities – prevention, wellness, mission, staff engagement, community benefit, fiscal responsibility and the right thing to do.”

Hospitals are going green in many ways, from turning to sustainable energy to finding synergies in hospital transportation services. Dell’s Children’s Medical Center of Central Texas and Beth Israel Deaconess Medical Center in Boston, MA, illustrate how being environmentally friendly translates to significant cost savings. Both hospitals, in fact, earned platinum certification from LEED (leadership in energy and environmental design), the most widely recognized and widely used green building program in the world.

  • Dell’s Children’s Hospital saved $6.8 million as a result of a successful collaboration with Austin Energy that eliminated the need to build a central plant (source of energy typically used to power multiple buildings). Using a combined heat and power (CHP) system instead, Dell Children’s became one of the first hospitals in Texas to leverage an onsite energy system as its primary source of electricity and one of the first grid-independent hospitals in the U.S.
  • Beth Israel Deaconess Medical Center reduced its annual lab energy consumption by $270,000, while lessening its carbon footprint and maintaining a commitment to safety in lab and research facilities as a top priority. In addition to reducing its annual lab energy by recycling lab materials, the medical center also combined its transportation service with other hospitals, began using reusable plastic mugs, and sent their leftover food to the compost.

Health systems participating in the Healthier Hospital Initiative – a national campaign to improve environmental health and sustainability in health care through innovative approaches – also report strong fiscal returns:

  • The Hospital Corporation of America (HCA) saved $21.7 million by diverting 364 tons of waste through reprocessing single use devices in their hospitals.
  • Kaiser Permanente saved $4 million in annual energy costs after its initial purchase of environmentally responsible computers for all of their facilities.

Going green benefits stakeholders in health care and beyond. When hospitals reduce expenses through environmentally smart investments, they improve their overall long-term performance and encourage the community to make eco-conscious choices too. When hospitals save costs patients also benefit because the money can be put toward health practitioners or other needs to improve care.

“There are numerous win-win opportunities for cost saving environmental improvement strategies in the health care sector,” Brown said. “As health care leaders become increasingly engaged, environmental stewardship programming is further integrated into the day to day operations of the vibrant health care environment and its benefits are maximized.”

Are hospitals in your local community adopting environmentally friendly initiatives? What could they be doing to conserve energy, reduce waste or go green in some other way?

Categories: Cost-Savings

Does More Data = More Accurate Results?

Every year U.S. News & World Report comes out with its “Best Hospitals” rankings, and providers wear them like a badge of honor. No doubt the recognition is prestigious. But how many people know why hospitals are ranked as they are? We decided to dig a little deeper and break down the methodology behind the rankings. What we found might surprise you.

Paul DeMiglio

Paul DeMiglio

“Best Hospitals” scores top hospitals across 16 specialties, from Cancer to Urology. For 12 of the 16 specialties, the rankings are based on performance measurements in structure, process and outcomes. Rankings in the remaining four specialties are based on hospital reputation as determined by a physician survey.

The methodology has evolved since the list was first published in 1990, transitioning from a heavy reliance on the reputation of hospitals (based on surveys of medical specialists) to incorporating more hard data to determine which providers make the cut. In an effort to increase accuracy and develop more objective, higher scoring methods, U.S. News & World Report moved away from expert opinion as a major factor of its criteria. Reputation now comprises only 32.5% of the overall score, except for hospitals in the areas of ophthalmology, psychiatry, rehabilitation and rheumatology.

The clinical data now used as the primary basis to rank hospitals measure patient outcomes and processes of care, based on factors including mortality, nurse staffing and advanced technologies. Hospitals also have to meet specific minimums for patient volume and are immediately considered high performing if they have a specialty like cancer or cardiology, among many others.

The power in this report lies in the objectivity as well as the information sharing from multiple, well-respected health care organizations and databases that exist as treasure troves for comprehensive patient information. The continuum of survey strategy — structure, process and outcome — defines essentially every step of the patient experience, from diagnosis to treatment to outcome.

For decades, much of patient care revolved around anecdotal teachings and recommendations. Hospital choices for individuals with complicated conditions often occurred subjectively and by word-of-mouth from both patients as well as caregivers. The strength in the “Best Hospitals” study design lies in the breadth of specialties, objectivity, number of hospitals, as well as the reachability and understandability of the results to the general public.  As the number of survey variables continues to increase by virtue of an aging population and the emergence of newer diseases and a greater number of treatment options, survey criteria will evolve and may correlate patient cost to outcome.  In other words, how much health care bang does one get for the buck?

For a detailed overview of the methodology behind “U.S. News & World Report’s Best Hospitals,” click here.

Is this system for ranking hospitals as objective as it could be? Does making the qualification guidelines more data-driven increase the reliability of the outcomes?

Saving Green by Going Green

Daniel J. Vukelich, Esq., President, Association of Medical Device Reprocessors

Daniel Vukelich

In August 2012, Forbes ran an article by Richard Crespin entitled, “If Sustainability Costs You More, You’re Doing it Wrong.”  Never before has this been more true for health care providers than it is right now.  In fact, data shows that if hospitals put in place certain green initiatives, they would save a lot more green – to the tune of more than $15 billion over the next 10 years.  In this era of shrinking budgets, escalating health care costs, and the growing problem of medical waste, isn’t it about time that all hospitals explore these sustainable options?

Research from the Commonwealth Fund, with support provided by Health Care Without Harm and the Robert Wood Johnson Foundation, concluded in their report Can Sustainable Hospitals Help Bend the Health Care Cost Curve? that “the savings achievable through sustainable interventions could exceed $5.4 billion over five years and $15 billion over 10 years.”

One of the initiatives considered was the reprocessing of select “single-use” medical devices (SUDs).  In the study, hospitals contracted with an FDA-regulated medical device reprocessor, which are firms that specialize in collecting medical devices – decontaminating, cleaning, repairing, and remanufacturing the devices for resale back to hospitals.  Extrapolating on the data collected, the researchers estimate that “hospitals’ cost savings over five years was about $57 per procedure and if hospitals nationwide adopted SUD reprocessing, cost savings would be $540 million annually, or $2.7 billion over five years.”

That’s billion with a “b,” it does not require any up-front hospital capital investment to get started, and is proven to provide patients with the same standard of care.  With these reprocessing programs, hospitals are able to extend the life and value of the medical devices they already own, not only dramatically reducing the amount of medical waste hospitals generate, but saving money as well.

The savings associated with reprocessing have been recently bolstered by other sources.  According to Modern Healthcare, the Healthier Hospitals Initiative, comprised of about 700 hospitals and three non-profit organizations (Health Care Without Harm, Practice Greenhealth and the Center for Health Design), found that its members “saved a collective $32 million in 2012 by reprocessing single-use medical devices,” a practice that was highlighted by the Healthier Hospitals Initiative (HHI) in its first milestone report.

HealthLeaders found in the report that “recycling, regulated medical waste reduction, energy management, and single-use device reprocessing were the four HHI Challenge areas with highest participation levels and represented the areas with the fastest financial rewards.”

Just two weeks ago, in an article from Becker’s Hospital Review, Huron Consulting Group issued a briefing entitled, “Ten Overlooked Opportunities for Significant Performance Improvement and Cost Savings.”  The briefing lists reprocessing among the ways hospitals and health systems can save their organizations millions.  Jim Gallas, managing director and Performance Solutions leader at Huron Healthcare, said, “As market pressures on hospitals and health systems continue to grow, a comprehensive yet granular approach to reducing expenses in every possible area creates a tremendous opportunity to make healthcare delivery more efficient, as well as fund the changes that reform is bringing.”

Of the 10 areas for performance improvement at hospitals and health systems, Huron experts identified medical device reprocessing as reducing device costs between 15 and 40 percent for an average 350 bed hospital, which saved $175,000-$315,000 a year.

Last week, Sterilmed, an affiliate of Ethicon-Endo Surgery, Inc. (a Johnson & Johnson company) and Stryker Sustainability Solutions (a division of Stryker Corporation), the nation’s leading two medical device reprocessors, were awarded Practice GreenHealth’s 2013 “Champions for Change Award” for Environmental Excellence.  This commitment to environmental sustainability measures is an example other hospitals can follow to save costs and reduce expenses.

Today, it seems the demand for everyone in health care is to do more with less.  Device reprocessing doesn’t require hospitals to make tough sacrifices, but allows hospitals to use existing resources in a safe, FDA-regulated manner.

If the immediate cost-savings opportunities aren’t enough to persuade hospitals to reprocess, the long-term impacts should.  As the Commonwealth report found, “hospitals create 6,600 tons of waste per day and use large amounts of toxic chemicals. Reducing such pollution and greenhouse gas emissions would reduce the incidence of human disease, thereby saving money for the health care system and society as a whole.”

Going green saves green now, and helps decrease demands on the health care system later.

Categories: Cost-Savings