Regional Differences, Cost Bottlenecks Stand Out in Healthcare Sustainability Survey

Regional differences in how healthcare professionals perceive progress on sustainability and bottlenecks on cost related issues stood out in a recently completed survey conducted by the IFMA Healthcare Council and Corporate Realty, Design & Management Institute (CRDMI). The survey was conducted as part of a seminar series on “Energy, Economics & Environment: Making the 3Es Work Together in Healthcare.”  The seminar series traveled to 10 U.S. cities throughout 2010.  

Results of the survey were announced at the annual Healthcare Design Conference. The survey results can be downloaded on CRDMI’s website, www.squarefootage.net

Among the key findings:
–  Midwest healthcare pros (and Boston) think they’re just as sustainable as other industries. Other regions think they’re doing worse
–  First cost dominates purchasing decisions with two notable exceptions
–  Everyone thinks energy costs are going up. If their crystal ball is right, rates will jump twice as high as federal government forecasts
–  Far too many underestimate financial impact of energy savings
–  When retooling for sustainability? 69% say appoint a Sustainability Manager
–  Green washing is worse than ever say 81%
–  There’s stunning lack of confidence in new technology
–   Reliability of infrastructure outweighs other concerns – except in Chicago
–   Majority of healthcare pros take time to research scientific sources prior to buying

Sustainability is on virtually everyone’s radar screen, but a bottleneck on first cost issues continues to hinder progress. More than 80% said “initial cost” takes precedence in final selection of equipment and materials on recent projects. While facility professionals and their suppliers understand the need to emphasize value rather than low first price – there’s a gap in communicating that value proposition to the C-Suite. Rays of hope shine in two cities: Denver and Chicago. One-third in Denver said durability/ expected life takes precedence. Nearly 50% in Chicago said sustainable features or durability/expected life were the critical criteria. 

The survey indicated, however, that healthcare industry professionals are doing their homework. One-third said they research scientific sources prior to selecting new products or equipment, and over 60% said they conduct research at least occasionally.

Most respondents misjudge the positive financial impact of cutting energy costs. When asked, “Every dollar the average hospital saves on energy is equivalent to producing how much revenue?” Two-thirds answered $10. This answer underestimates the correct answer of $25 by a whopping 60%. Uncertain is whether this is the result of financial illiteracy or simply failing to understand the dramatic dollars and cents impact of energy savings? Atlanta and Denver were the only two cities where at least 50% of respondents answered this question correctly.

More than 60% of respondents think energy costs will rise 4-7% next year, and nearly 30% think they’ll climb 7% or higher. To put this in perspective, the federal government projects energy costs will double over the next 25 years. If energy rates rise at 4-7% yearly, the cost of energy will quadruple in this 25 year time span.  Boston respondents were by far the most conservative in their projections, as 60% felt energy costs will rise1-3% in the next year.

A trend that emerged in the first half of the year continued as nearly 70% think hospitals need a sustainability manager if the industry is to retool effectively for sustainability. Denver gave preference to creating a sustainability committee. Atlanta and Dallas gave equal weight to obtaining building certification such as LEED or Energy Star. The recent IFMA World Workplace conference in Atlanta reinforced that sustainability is becoming a core competency for facility professionals.

Regional differences are evident in how the industry perceives itself. In the Midwest, over 60% feel that healthcare is implementing sustainable solutions as effectively as or better than other industries. Over 50% in Boston agreed. It was the opposite in the Southeast, Southwest and Rocky Mountain regions as 60-85% said, “We’re doing worse.” Yet, one executive mused, “Healthcare is also holding itself to a much higher standard than other industries.”

There was universal agreement about greenwashing, though. More than 80% of respondents in every city except Boston say greenwashing is more prevalent than two years ago.  In Boston, the worse rating was under 70%, as 28% said there’s been no change.

The survey was conducted among attendees of the “Energy, Economics & Environment: Making the 3Es Work Together in Healthcare” seminar series in the following 10 cities during 2010: Atlanta, Boston, Charlotte, Chicago, Dallas, Denver, Kansas City, Phoenix, St. Louis, and Tampa.

Also available for download on www.squarefootage.net is a podcast series on Energy, Economics & Environment. The survey, podcast and seminar series are part of the IFMA Healthcare Council’s mission to keep healthcare professionals abreast of the most critical trends in 21st Century hospitals.