A survey of 20 major metropolitan areas in North America reveals that a number of interrelated perceptions are creating bottlenecks in achieving more cost efficient and sustainable healthcare facilities.
Prevalent reasons given include the following:
- Apprehension about performance of new technology;
- Buying decisions are based on first cost; and
- Proliferation of green washing by manufacturers and service providers.
It appears that these three issues are linked in the minds of buyers and specifiers, as eight of 10 survey respondents share these opinions. A change in behavior and more education are needed in order to change these perceptions.
The survey was conducted as part of the “Economics, Efficiency, Energy & Environment: Making the 4Es Work Together in Healthcare” seminar series conducted throughout 2010-2011 by the Corporate Realty, Design & Management Institute in partnership with the IFMA Healthcare Council (now the Healthcare Institute of IFMA). Complete survey results can be downloaded here.
Among the key findings:
- Lack of confidence in installing or specifying new technology;
- Lowest first cost still dominates purchasing decisions (except in Cleveland);
- Green washing plagues industry as 85% says it’s becoming more prevalent;
- Far too many lack the fundamental financial knowledge needed to overcome first cost issues with life cycle cost analysis;
- Majority feel healthcare still lags other industries in implementing sustainable solutions – except in Midwest cities;
- Crystal ball gazing: More than 90% forecast energy costs will rise 4% or higher;
- Reliability of infrastructure is top concern – except in five cities where regulatory pressures is tops; and
- Next step to retool for sustainability – 68% say appoint a Sustainability Manager.
An immediate roadblock surfaced as participants were quizzed about installing or specifying energy saving technology. When asked about what concerns them the most, 78% answered, “May not deliver projected performance.” Over 85% of those survived say green washing is more prevalent today than two years ago. Only 4% think it is less than it was two years ago.
Linked to these concerns is that 80% say first cost takes precedence in the final selection of equipment and materials on their most recent projects. Less than 15% say they select products or equipment based on durability and expected life of the item.
Cleveland, Chicago, and Denver were the only cities where more than one third of respondents used durability or sustainable features as their selection criteria. It’s significant to note, however, that some of the medical centers where the 4Es seminars were held displayed how long-term thinking was paying big dividends in energy savings and waste reduction.
Two survey questions tested financial knowledge—a prerequisite for presenting life cycle cost analysis. Over 60% incorrectly answered both questions. The answers to the questions reveal the impact that design and operations have on a hospital’s financial health. Given a 4% total margin, saving $1 in energy equals $25 in revenue, and for the average sized hospital in the U.S. that translates to an additional $7.2 million in revenue.
A lack of self-confidence was evident on sustainability issues, as more than 50% think healthcare is performing worse than other industries. The Midwest region had the highest opinion of itself, as the majority there believe their industry is as sustainable if not more so than other regions.
Appointing a sustainability manager was considered the most important step in retooling a hospital for sustainability. Nearly 70% thought this would produce better results than creating a committee or relying on participation in Energy Star or LEED.
The survey was conducted among attendees of the “Economics, Efficiency, Energy & Environment: Making the 4Es Work Together in Healthcare” seminar series in 20 North American cities during 2010-2011: Atlanta – Boston – Charlotte – Chicago – Cincinnati –Cleveland – Dallas – Denver – Houston – Kansas City – Minneapolis – Philadelphia – Phoenix – Portland – San Francisco Bay Area –Seattle – St. Louis – Tampa Bay – Toronto – Washington, DC.
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