The Commonwealth Fund Blog

How a Sustainability Strategy Can Positively Impact a Health Care Organization's Bottom Line

November 2, 2012

Tags: health spending hospital care

Thompson JeffBy Jeffrey Thompson, M.D., CEO, Gundersen Health System

Until a few years ago, most people didn't think of putting the words “sustainability” and “health care” in the same sentence, and even fewer thought sustainability efforts could help bend the health care cost curve. It turns out sustainability efforts by health care organizations are already having an impact on bottom lines by promoting health, inspiring staff, leading communities, and saving money. The recent report by The Commonwealth Fund demonstrates this effect, as do many real-life examples. 

One of those examples is the Gundersen Health System, based in La Crosse, Wis. In 2008, we launched our sustainability program, Envision. Our goal for Envision was to take care of the health of the people in the communities we serve and the environment, while lowering our costs.

At the time, our energy costs were rising at an alarming $300,000 a year. Those costs were being passed along to patients in the form of higher health care costs. That wasn't OK with our board or, most importantly, with our patients. In addition, we were using fossil fuels that pumped millions of pounds of CO2 and hundreds of thousands of pounds of particulate matter into the atmosphere that our patients and staff breathed.

We started with an energy audit in 2008 that opened our eyes to dozens of energy-saving opportunities. We examined our heating/cooling systems and lighting and employee behavior, and implemented a number of measures to improve efficiency and reduce energy demand. For example, we retrofitted our light fixtures with updated technology and saw an energy cost savings of about $265,000 a year. Reprogramming our cooling system controls led to an annual savings of about $65,000. By the end of 2009, those efforts led to a 25 percent improvement in our energy efficiency. That $2 million investment saves the organization more than $1.2 million every year in lower energy costs.

Since then, we've also sought out successful partnerships in our community. We worked with our local county government to turn previously wasted methane gas from the landfill into a renewable energy source. The project created a revenue source for La Crosse County, saves our health system hundreds of thousands of dollars, and made one of our medical campuses 100 percent energy independent. We also partnered with a rural village and Organic Valley, the largest cooperative of organic farms in the country, on a wind farm. The wind farm provides enough electricity for 1,000 homes, and is a source of income for both Gundersen and Organic Valley.

By 2014, these types of energy saving and renewable energy projects will allow our health system to become 100 percent energy independent.

Cost savings don't stop with energy savings. Other programs have also had an impact on the bottom line. In the operating rooms, we discovered that 95 percent of the single-use surgical items can be recycled or reprocessed (sterilized, remanufactured, and sent back to Gundersen for reuse) and diverted from landfills. This program alone is saving Gundersen nearly $400,000 annually. Our paper and cardboard recycling program has turned into a revenue source. We receive rebates by our waste services vendor to recycle; it was costing us more than $36,000 a year to haul that away as waste before. Our regional contractors have figured out how to keep over 97 percent of construction waste out of landfills. They set up several dumpsters at the construction site to sort the waste by metal, wood, concrete, cardboard, etc., and recycled/reused it rather than sending it to the landfill.

In our kitchens, our dietary staff changed the way they make food. Our food waste decreased over 40 percent, and we're saving about $25,000 on disposal costs. We're also donating food that's still safe to eat, but cannot be served in the hospital, to a local Salvation Army, so approximately 1,000 meals a month are being donated to help feed the needy.

Our partnerships and successes are a great source of pride for our staff, our patients, and our community. These are a few of many examples from Gundersen Health System. You can learn more at www.gundluth.org/green.

Our Envision program is so important to our success as an organization that it's become part of our strategic plan, right alongside our plans for quality, safety, and growth. We've proven that sustainable practices in health care are not just possible, they're practical and can have an impact on the organization's bottom line, as well as help improve staff engagement, community partnerships and trust, and, we believe, eventually will lower the cost of health care for our patients.