Healthcare organizations account for four percent of the nation’s billable square footage, yet they consume more than eight percent of the nation’s energy annually. And their costs, along with demand, are sky rocketing as baby boomers age and key resources (oil, water, etc.) grow scarce. Sustainability, it would seem, is on the mind of every hospital executive in America. And if it’s not, it should be. In this installment of the Green Line Series, Trennis Jones, Senior Vice President at Seton Healthcare Family, gives us the big picture breakdown for sustainability’s business case in healthcare.
GoGreen Conference: Let’s start big picture. This is a transformative time for healthcare — lots of questions are being asked on how it can improve, how it can increase the quality of care and how it can be more financially efficient. From your perspective, what is the overarching vision in your industry for how sustainability can make an impact on what you do?
Trennis Jones: If you look at hospitals alone — we use about 836 trillion BTUs of energy annually. We produce a little over 30 pounds of CO2 emissions per square foot — broken down, that is more than 2.5 times the energy intensity in carbon dioxide emissions for commercial office buildings. So, if U.S. hospitals spend over $5 billion annually on energy — often equaling one to three percent of a typical operating budget — that works out to about fifteen percent of the profits. That’s a big chunk.
Then you have in-patient facilities, which use an average of 240,000 BTUs per square foot. Hospitals account for four percent of the national billing square footage, but we account for eight percent of national energy consumption on average. That four percent of difference represents a big opportunity for us. The question is: How do we capitalize on that and not lose the sight of the fact that our number one goal is to care for our patients better?
Big picture for us involves looking at how we can construct and renovate better. How can we construct that building going up differently than we would have in the past in order to be greener and more efficient? We recently finished construction on Dell Children’s Medical Center in Austin. That building was constructed with the vision of it being a “green hospital.” In fact, it was the first LEED platinum hospital in the world. And even though we just closed out on the main building, we are adding on a new unit that will feature at a 20-kilowatt photovoltaic array for the solar water heating system that will reduce energy consumption for that unit by three percent. With the future in mind, we are also installing three electric vehicle (EV) charging stations for patients who are driving progress by owning an EV.
GG: Obviously these initiatives are already having an effect on Seton’s bottom-line. Do you feel sustainability can directly affect the quality of patient care as well?
TJ: When considering costs, any type of organization that is in business passes on to the consumer. So, in the healthcare space, if you reduce your costs through energy efficiency and strategic reuse of materials (cloth surgical gowns, for example, or reusable sharps containers), you can pass the savings on to patients through lower costs for their care.
GG: What about waste? It’s not the sexiest topic, but for so many industries — hospitality, healthcare, manufacturing — waste management is on the minds of facility managers and CFOs as a big opportunity to reign in operating costs. How does the Seton Healthcare Family approach waste management?
TJ: You can look at it two ways – consuming responsibly and reusing whenever possible. On the one hand we have a waste stream made up of things like paper. We can make better choices on what kind of paper we use and how we dispose of it. We also have waste that comes from things like batteries, that we now look recharge as opposed to throwing them away. Or, as I indicated earlier, we can reduce the consumption of goods through reusing metal instruments that can be sterilized rather than thrown away.
So we look at how we purchase things – we use an environmentally preferred purchasing that prioritizes things like source materials and reduced packaging. And we look at how we use things. We’ve reduced the amount of linens in circulation by switching from paper to cloth gowns. Then we look at the type of cleaning solvent used for its earth friendliness and non-toxic makeup.
GG: Is this transformative approach to waste creating a new market for services within healthcare?
TJ: It creates different markets. For example, going back to the sharps containers, now we contract with a company that comes in and switches out used containers for sterilized, reusable units as opposed to a group that simply takes single-use sharps containers away to be disposed of. When you change systems, you employ different services and consume different goods around that system. So it’s often times less about creating more markets, but rather about engaging with more sustainable markets and providers.
GG: Do you feel that integrating sustainability values into your Seton’s core values and implementing programs accordingly has helped your organization be a better corporate citizen in the communities you serve?
TJ: Yes it has. Not just as it relates to Seton Healthcare Family, but also as it relates to Ascension Health (of which we are a subsidiary), the largest not-for-profit healthcare organization in the nation. We have sustainability goals, throughout all of the hospitals in the system, which are designed to help us be more efficient and also do our part as a community leader and consumer of resources in the region.
GG: You were on the board of Seton Healthcare Family before you came into your current position – what were the key decision-making factors in adopting sustainability? There are a lot of companies who are still on the fence in terms of sustainability. Board members and executives who may be thinking, “yeah this is great, but what’s really in it for us and how do we make it happen.” How did you get the support to execute these values within your operations and strategic planning?
TJ: As a board member you are a representative of the community and you have a responsibility to the organization to help uphold the role it plays within that community. When I was on the board, the decision was made to build the Dell Children’s Medical Center. The decision build green was made based on several factors. We asked ourselves how we could be a community leader through this process. We felt that building a sustainable, cost-effective hospital was an important way we could contribute. Reduce the consumption of energy was both fiscally smart for us because of the cost savings, but a way to conserve resources for the benefit of the region. And it allowed us to walk our talk — to demonstrate what being green means for an organization with an eye fixed on the bottom line.
GG: What benefits have you seen — in particular, what cost savings — as a result of adding sustainability into your strategic planning and decision-making process.
TJ: If you reduce your energy consumption by three percent annually– that is huge for your bottom line. You also have an increased impact on the regional economy and realize the cost-savings from working with local providers – the products that you use there are increasingly from within a few miles of the community. When you’ve got sustainability in mind, you aren’t flying things in from Europe. The cool part is that you witness a transformation in that your hospital is supported and also built by the community.
GG: By the people, for the people?
TJ: By the people, for the people — and built to take care of the people.
GG: That three percent — what kind of scale is that for you? Is that tens of thousands, hundreds of thousands, millions of dollars saved?
TJ: That would definitely be somewhere in the range of hundreds of thousands dollars.
GG: So it’s a noticeable impact?
TJ: It is noticeable, yes. It will give you and those who visit here a noticeable savings in the cost of your care. It also reduces the burden on the regional energy system. Let’s take 2011 for example – we had one of the hottest summers on the books within the Central Texas region. Let’s say we had built Dell Children’s Medical Center without energy efficiency in mind. That certainly would have been a drain on the grid during those months — right when they were asking us all to cut back on energy used. So, as we look out to the future, doing things like installing solar panels to help heat Seton’ water helps the community beyond our internal cost savings. It’s our responsibility, as a community leader, to take on those challenges and find opportunity to help where we can.
Trennis Jones is a Senior Vice President, Chief Administrative Officer and
Corporate Responsibility Officer for Seton Healthcare Family. He is also a passionate advocate for community development. Trennis will join the Texas Sustainability Leaders keynote panel at GoGreen ’12 Austin, April 4 at Austin Music Hall. For more information or to purchase tickets, please visit: austin.gogreenconference.net.