Why hospital CEOs are thinking about the air conditioning bill

Crain's Chicago Business

August 26, 2014

As Advocate Health Care moves ahead on a $92 million expansion of Good Samaritan Hospital in Downers Grove, Ill, it’s primarily concerned with adding three stories of private patient rooms. But it’s also focusing on the air conditioning system.

In an industry being pushed to reduce everything from overnight stays to nursing staffs, energy efficiency is a largely untapped area for cutting costs, experts say.

It’s more than just switching out old light bulbs. NorthShore University HealthSystem is overhauling operating rooms to make them less power-hungry, while Swedish Covenant Hospital uses structural beams channeling chilled water to cool its new outpatient building and LED lighting in its garage. Meanwhile, virtually all of the new hospitals built in the area in recent years have been certified as “green” buildings.

Hospitals are among the most resource-intensive commercial buildings because they must operate continuously and require energy for items as simple as lights and as complex as surgical robots. They have strict requirements for temperature, humidity and air quality, meaning they need sophisticated HVAC systems, and they include nonclinical functions that have high energy demands, such as food services and information technology.

For large hospital systems, annual energy costs can reach into the tens of millions of dollars, no small amount in an industry of thin margins. Yet most health systems still don’t make green investments a priority, experts say. The incremental savings of an efficient boiler, for example, aren’t as sexy as the revenue pop of a new magnetic imaging machine.

“It’s a largely untapped competitive edge,” says Dan Doyle, chairman of Grumman/Butkus Associates Ltd., an Evanston, Ill. engineering firm that advises health care systems, including Advocate and NorthShore, on energy use.

Inpatient facilities accounted for only 3 percent of square footage among all U.S. commercial buildings but gobbled up 8 percent of energy consumption, according to a 2003 U.S. Energy Information Administration survey, the most recent figures available.

Lighting accounts for 43 percent of hospital electricity usage, according to the federal data, so simply turning off unneeded lights often is the first move. The next step up, in terms of complexity and cost, are upgrades that would automate behavioral changes, like motion sensors that switch off lights in unoccupied areas, or fans that slow airflow through unused rooms.

When price tags reach into the hundreds of thousands of dollars for equipment like boilers and chillers, efficiency projects must compete for funding against other initiatives at the health system, says Cecilia DeLoach Lynn, director of facility engagement and metrics at Practice Greenhealth, a Reston, Va.-based health care industry coalition. “It’s still finding its way to the top of the agenda,” she says.

Continue reading full article from Crain's Chicago Business