Environmental Regulations and the Path Ahead

As we emerged from the pandemic, a short pause has allowed us to take stock of the lingering effects on the health care industry. Unpredictable prices, extended product lead times and labor shortages are now commonplace. These factors, coupled with inflation, have driven up healthcare and construction costs, which impact project viability, operations and growth. In the midst of these challenges, a renewed focus on environmental regulations has materialized.

Environmental regulation is overdue and the trajectory of climate change demands responsible citizenship by all industries. As local and state governments enact regulations, hospital operational leaders find themselves scrambling to understand new legislation, timelines and paths forward. However, to really understand the issues, we should retrace our steps.

The past century was defined by advances that hinged upon non-renewable resources providing cheap and accessible energy. As industries thrived, cities and populations grew, along with the demand for care sites, including hospitals. The need for expansion increased the number of our hospitals and the size of our carbon footprints. Each step was molded by the building codes, regulations, laws and technology of the time.

Today, updating and replacing our aging infrastructure provides an opportunity to reduce energy consumption. However, doing so comes at a cost. That cost is not only defined by capital investment, but also by legislated fines imposed for non-compliance. In my region, regulations require an energy consumption reduction by more than 50 percent within a defined and brief time period, or hospitals can face millions of dollars in fines. These challenges are particularly difficult for non-profit institutions that maintain buildings, some of which may be over a century old.

Hospitals are made up of good people who view their work as service to others. At National Jewish Health, we fully support efforts to cut energy usage and curb the effects of climate change. We will invest time, money and resources to do so. The challenges we face are rooted in meeting the energy reduction expectations within the established timeframe and under the threat of enormous fines. And with little to no financial assistance. So, where do we go from here? Forward.

This opportunity for change will fall to those who serve in hospital leadership, including those in facilities management and construction. We must first understand the various program requirements and ensure compliance. To do so requires coordinating with utility providers, learning new software, and collecting and analyzing data in a novel way. Combining new data streams and developing relationships with government entities will provide the foundation for mutual understanding and a clear path forward.

In an effort to steady the ship, we must approach these opportunities in a multifaceted way. We all must engage our local governments, meet with legislative representatives, evaluate our own organizations, and find creative solutions for financing. One financing approach is through Energy Performance Contracting. This model is administered through an Energy Service Company (ESCO), which evaluates campuses and recommends capital upgrades, which will pay for themselves within specified terms and timelines. The ESCO will perform a preliminary energy assessment to recommend opportunities. An energy assessment of a complex campus is a large undertaking, but it is important to first know the right actions to take before being able to usher in positive change. The best way forward is in collaboration, not isolation. Rising to these new challenges requires working effectively together to meet our common goals.