Tackling Climate Change Can Save Hospitals Money

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The business of healthcare in the U.S. is a big business, from the hospitals providing patients with care to companies that manufacture medical devices. In total, the U.S. spends more than 18% of GDP on health care. So perhaps it shouldn’t come as a surprise that health care also has a massive carbon footprint: it’s responsible for more than 8% of all U.S. greenhouse gas emissions.

For years, the climate impact of health has received less attention than other carbon-intensive sectors—but that may be changing. Last year, more than 60 of the country’s largest hospital and health care companies committed to cut emissions in half by 2030 in a pledge coordinated by the Biden Administration. At the Aspen Ideas Festival this week, I led a discussion on the emerging push to decarbonize the health industry. It’s an important topic with lessons for businesses inside and outside of that sector.

Getting there will require a dramatic change. Shifting mindsets is hard in any industry, but it’s particularly the case in health care where practices are, at least in theory, dictated by a need to protect human health. Many items designed to protect human health, like single-use syringes and gowns, aren’t all that great for the planet. But leaders in the space say there’s opportunity despite these challenges. Some are questioning long-held assumptions, revealing opportunities to change practices in ways that cut emissions without harming health outcomes. And there’s a business case: fewer emissions typically correlates with lower costs.

In Aspen, I spoke with Seema Gandhi who serves as the medical director of sustainability at the University of California, San Francisco Medical Center. Gandhi, an anesthesiologist who trained in India and the U.K., noticed that her hospital in the U.S. was using four times as much desflurane, a greenhouse gas used in inhaled anesthesia, as in the U.K. Not only does desflurane cost more, but the excess gas that isn’t inhaled is vented outside where it contributes more to global warming than other alternatives. She evaluated the data, and presented the business case. By making the switch, the hospital saved $300,000 in a year. It also saved the equivalent of taking 159 cars off the road between 2018 and 2020 as it phased out the gas.

Read more: Why the Staff of Europe’s Most Valuable Company Is Getting ‘Climate Training’

Hospital systems are finding similar examples by questioning long-held assumptions. Forward-thinking hospitals are reconsidering which single-use items can actually be reused or recycled (such as hospital gowns, in some circumstances). Even the number of air exchanges—the frequency of air being cycled out—in the hospital environment is being considered. Crucially, all of these measures can save money. “Climate mitigation and resilience are definitely beneficial for that bottom line,” said Shanda Demorest, associate director of climate engagement and education at Health Care Without Harm, a non-profit working to limit the environmental footprint of the health sector, on the panel.

Read more: Climate Change Isn’t Just a Global Threat—It’s a Public Health Emergency

And then there’s energy, a huge cost for hospital systems. Take the Gundersen Health System, which operates seven hospitals and dozens of clinics in Wisconsin, Minnesota, and Iowa. Jeff Thompson, the former CEO, said that when he first pitched decarbonization efforts 15 years ago to his board he framed it carefully to avoid talking about climate change and instead focused on how air pollution affected the local population. In the years that followed, he switched the system’s power supply to run on renewables and cut its emissions by 95%. “We’re making money, lowering the cost of care, improving the local economy,” he said on the panel.

The health sector—like any industry—has its own quirks. But there’s a lesson for any business: don’t write off decarbonization just because you’re set in your current practices.

Hospitals, of course, are only one part of health care’s carbon footprint. To truly decarbonize, it will require buy-in from medical device manufacturers, pharmaceutical companies, and others. Still, hospitals can help lead the way.