Healthcare Heal Thy Footprint

[Editor's Note: This is the first segment of a three-part series about greening the healthcare industry.]

Energy costs for healthcare organizations are over $8.5 billion, industry green house gas emissions make up 8 percent of the U.S. total, and healthcare facilities are second only to the food industry in producing waste. Yet in some sectors of the healthcare industry, major players have been slow to go green.

As the scrutiny of healthcare costs becomes more intense, will government incentives motivate the healthcare industry sustainability laggards to green up or will the slow starters overcome their inertia and finally follow green leaders in realizing opportunities for gain and good?

As the main healthcare industry sectors -- hospitals, pharmaceuticals, medical product and devices, and insurance -- vary significantly in products, services, structure, sustainability and transparency, it makes sense to look at each piece separately.

For the hospital sector, profit margins often hover in the single digits and with hospitals using twice the energy of a typical building, savings could add up quickly. Yet many of the largest hospital organizations lack any visible plan to tackle environmental impacts. In Newsweek's Green Rankings, only two of the largest for-profit hospital organizations, HCA and Universal Health Systems, made the list and both scored in the bottom 10 percent

None of the six largest private hospital organizations with 442 hospitals combined (6.7 percent of market) provide environmental accounting in their annual reports. And many of the largest nonprofit hospital organizations fare no better, with none of the top five providing any obvious mention of environmental sustainability on their websites.

Newsweek Green rankings and a review of the large hospital organizations' websites hint at two big problems. Large hospital organizations are leaving green money on the table by ignoring sustainability advantages. In addition, transparency on environmental issues is hard to find. This lack of transparency and standardized metrics obscures opportunities and stymies effective action.

Effective action is further complicated by a highly fragmented industry structure. With 6,529 hospitals where the largest single player is the U.S. government (1,200 hospitals) and where the industry is dominated by nonprofits (60 percent of the market), the largest players haven't yet followed many for-profit industries in developing and reporting sustainability metrics, reporting to the Carbon Disclosure Project, or creating regular, periodic environmental responsibility reports.

The good news is that some hospitals, both government and non-government, are already up at bat investing their own capital and taking advantage of the billions of dollars for energy efficiency in the stimulus package, plus tax incentives and federal grants to fund improvements. The green leaders in government, private, and nonprofit hospitals are forging the way by tackling energy, waste, and the supply chain, and by creating a more sustainable patient experience.