In an effort to stem the monthly drain of electric, gas, telephone and water bills, many hospitals and healthcare systems are turning to outsiders to help manage their utility costs.
For example, the U.S. Environmental Protection Agency runs the popular Green Lights Program, launched in 1991, which has caught on in the healthcare industry. Now more than 800 healthcare companies are participating.
Healthcare giants such as Denver-based Catholic Health Initiatives and Brentwood, Tenn.-based Quorum Health Group have nothing but good things to say about the EPA's voluntary program to promote energy efficiency.
St. Joseph Hospital, a 256-bed CHI facility in Lancaster, Pa., teamed up with the EPA under the Green Lights Program in 1994. Since then, it has replaced some 6,500 lighting fixtures with energy-efficient bulbs, cutting $175,000 from its annual utility expenditures, said Richard Armstrong, the hospital's former director of support services. St. Joseph was named the EPA's Green Lights Partner of the Year in March.
"The program is definitely a win-win-win project," Armstrong said. "We are being a good steward of the environment, which is part of our heritage, and at the same time we're saving more than $175,000 annually."
Inefficient electricity use in buildings across the nation wastes about $25 billion a year, according to the EPA. And the avoidable consumption of fuel equals needless pollution. Lighting accounts for 30% to 40% of energy use in buildings, so it's a good place to start saving, the agency said.
Other areas of utility consumption also are being targeted for reductions.
For example, 365-bed Mercy Hospital in Miami has turned to Boston-based H2O Matrix to manage its water bill under a program called Liquid Assets. "Mercy Hospital saved more than 6.3 million gallons of water per year, reduced water costs by 22% and produced annual savings of $55,000," said Tom Muratore, executive vice president of development of H2O Matrix.
Water has become a more costly resource over the past decade as rates in many cities have risen as much as 400%, Muratore said. H2O Matrix, however, is so sure of its abilities to reduce consumption of water it guarantees customers annual savings of 20%.
Other hospitals are trying to reduce the costs of natural gas. In Chicago, 582-bed Illinois Masonic Medical Center works with Hillside, Ill.-based National Energy Management, a natural gas marketer. Because Illinois Masonic now buys gas at lower rates, it saves $110,000 annually, said Dan Boylan, its director of engineering. "We pay a fixed fee on top of the gas charges-about a half cent per therm of gas used," he said.
Hospitals and health systems said they see such programs as not just money-savers but also as a chance to help their communities.
"We see this as an opportunity to give something back to our communities and the environment," said Brian Hitchcock, director of corporate material resources at Quorum. "Second, this initiative fits well with Quorum's strategy of delivering services cost-effectively. As we look at every area for efficiencies, this one certainly offers a lot of potential."
Hitchcock said Quorum is upgrading and retrofitting old lighting with new energy-efficient fixtures that emit more light per watt of power and reduce how much electricity is needed to turn lights on. So far, three of Quorum's 17 owned hospitals have completed the conversion; the others will do so as their budgets allow, a Quorum spokeswoman said.
Quorum's 215-bed Flowers Hospital in Dothan, Ala., has identified savings of about $30,000 annually under the Green Lights Program. At a total cost of $146,000, the project will pay for itself in just five years and become profitable thereafter.
But the hospital said it has gained a lot more than energy efficiency.
"New lighting levels have had a positive impact on morale at the facility," said Joey Hester, director of support services at Flowers. "When we went into the project the employees thought they would have a reduction in lighting in their work areas, but to our surprise the retrofit improved the lighting throughout the facility.
"Reducing operating costs by reducing overall electrical consumption and demand at the hospital will ultimately help control the cost of patient care," he added.