‘If I were a hospital, I’d be reading the tea leaves’: Pressures grow on the health care industry to reduce its climate pollution

Flooding, heat waves, wildfires, and other climate-driven weather extremes in recent years have catapulted hospitals into emergency mode and devastated the communities they serve, with Hurricane Ian’s deadly rampage through central Florida only the most recent example. 

But while hospitals might seem to be the unwitting victims of climate disasters, the U.S. health care system — and hospitals in particular — shoulder a good deal of the blame. The health care sector accounts for about 8.5% of all the greenhouse gas emissions in the U.S., and about 4.5% of worldwide emissions. These emissions are generated mostly from running energy-draining facilities 24/7, and from the vast array of pharmaceuticals, medical devices, food, and other goods and services produced, purchased, and sometimes wasted, in the course of providing care. 

Some hospitals have begun to tout their efforts to combat climate change, claiming to have achieved 100% renewable energy or “carbon neutral” status. They offer scattershot examples of progress in reducing their emissions, citing “meatless Mondays” in hospital kitchens or improved recycling programs. Yet hospitals have long been laggards in even tracking and reporting their emissions and waste — much less reducing them. Today there is no way to hold the country’s 6,000 hospitals accountable and benchmark their performance.

Now a number of forces may be converging to push hospitals — and the health care system more broadly — to undertake a massive effort to reduce their dependence on fossil fuels, as well as other greenhouse gas producers, such as the gases used in anesthesia.

Perhaps the biggest incentive for action comes from the Inflation Reduction Act that President Biden signed in August, which not only greatly expanded tax credits for U.S. companies that adopt energy-saving renewable technologies but also, for the first time, made these credits available to nonprofits — a category that includes just over half of the nation’s hospitals. 

Outside the federal government, the Joint Commission, which accredits 80% of hospitals, is expected to offer new accreditation standards addressing climate impacts within a few months, and to start a review of existing standards to be sure they don’t encourage waste or unnecessary consumption. Revisions in national construction and safety codes that will go into effect for all hospital buildings in 2023 could promote energy efficiency, and some jurisdictions are setting ambitious goals for the adoption of alternative energy sources such as solar-powered micro-grids. As a paradoxical side benefit, rising prices and supply chain problems may lead hospitals to make meaningful cuts in wasteful purchasing.

“Things are starting to line up in a really good way. We have a moment where we could start to move in the right direction,” said Walt Vernon, a principal and CEO at the engineering firm Mazzetti. He co-authored a background report prepared for the National Academy of Medicine, which in September 2021 launched the Action Collaborative on Decarbonizing the U.S. Health Sector. 

But the U.S. health care industry is a behemoth. With $4.1 trillion in expenditures in 2020, it’s closing in on 20% of GDP, and redirecting that supertanker is a huge task. Meaningful progress in cutting emissions may be years off, in large part because there is nothing to force hospitals to take the hard steps toward decarbonization.

So far, the Department of Health and Human Services, in response to the Biden administration’s directive to federal agencies on climate change, has taken a number of steps to address the issue. It has opened a couple of small offices to examine climate change, health equity, and environmental justice, and gathered pledges to lower emissions 50% by 2030 from more than 60 of the nation’s health organizations  (accounting for about 650 hospitals); it is also hosting webinars and offering resource materials. But all of this, critics say, doesn’t add up to much. 

“Voluntary measures are not going to get us there fast enough, far enough,” said Jodi Sherman, associate professor of anesthesiology at the Yale School of Medicine, and director of the Yale Program on Health Care Environmental Sustainability. “Standardized, transparent reporting of GHG emissions is essential to ensure accountability,” said Sherman. A recently published editorial in the Annals of Internal Medicine concurred: “Without quantitative, verified, and published information, there is no way to mark progress, elucidate best practices, hold entities to account, or eliminate greenwashing.” 

Some of the U.S. hospitals that have done the best job of reducing emissions over the past few years are those in the Veterans Affairs system — no surprise, given that the Obama administration required federal agencies to meet new energy efficiency targets.

Similarly, the National Health Service in the U.K. offers a compelling model for decarbonization, and as a national, government-run system, the NHS is at a considerable advantage — hospitals and physicians have little choice but to follow the government-provided guidelines.

One agency that could step in and implement a mandated program for U.S. hospitals to reduce emissions is the Centers for Medicare and Medicaid Services, which, as the largest payer to health systems, can wield strong levers. Last May, CMS put out a “request for information” on climate change impacts, albeit buried deep in a nearly 700-page rulemaking document. A CMS spokesperson said that public comments received in response will be used to inform potential future policy development.

But there’s no consensus on the best measures to track those impacts, or how to validate them, said Cheryl Damberg, a health economist and director of the RAND Center of Excellence on Health System Performance. And even if there were a consensus on measures, the adoption of any type of carbon mitigation rule for hospitals could be at least two to five years off, she said. What’s more, CMS is likely, as it did when it was trying to encourage quality improvement at hospitals beginning in 2004, to start by simply asking for data collection and reporting of new measures, without attaching payment incentives for hospitals to reduce emissions or penalties for increasing them.

Still, Damberg said: “If I were a hospital, I’d be reading the tea leaves.”

The measurement problem

Aware of the increased public attention to the climate crisis, some hospitals would say they already are. 

Hospital executives tout their climate bonafides, claiming that they are taking steps to make their facilities “carbon neutral” or promising to reach “net zero” emissions.

But with little consensus on how to measure and report emissions at the facility level in health care, and no clear way to measure or define progress in reducing emissions or reaching energy efficiency goals, the risk of “greenwashing” is high, Yale’s Sherman said, with hospitals setting targets or implementing changes that sound good but accomplish little.

Many hospitals do not specify whether and to what extent they’re using voluntary carbon offset credits to “reduce” their emissions  — purchasing credits that represent reductions in carbon dioxide emissions elsewhere, for example, from other entities building renewable energy sources or conserving forests. And the global market for carbon credits is unregulated, with no systematic verification and ample room for fraud. For this reason, the international Science Based Targets initiative strictly limits the use of carbon credits in its net zero standard, saying they may be used only for neutralizing small residual emissions once long-term targets have been achieved.

These problems aren’t unique to health care. But the absence of reporting standards means that scattered data offered by hospitals can’t be aggregated in a meaningful way to allow for benchmarking and year-to-year comparisons.

Sherman said that data currently collected by the Environmental Protection Agency could, however, provide a foundation on which to build a better and more comprehensive way of tracking how individual hospital providers are performing. About 3,500 hospitals report energy use and actively benchmark in the Environmental Protection Agency’s Energy Star program, and approximately 360 hospital buildings have received Energy Star certification. The EPA also publishes emissions factors that serve as the foundation for calculating supply chain emissions in the U.S. The EPA and HHS should develop an inter-agency partnership to study emissions and develop measures, Sherman said. In an email, an EPA spokesperson said no conversations about any such partnership have taken place.

Cost-saving can be a motivator

It might seem like a bad time for hospitals to undertake new initiatives to decarbonize. More than half of all hospitals are projected to experience negative financial margins this year, according to  Kaufman Hall consultants. Optimistically, margins in 2022 will be down 37% from pre-pandemic levels, and Fitch Ratings says negative pressure on finances will continue into 2023.

But executives of some hospitals that have led the way in reducing emissions say there’s probably no better time, because promoting energy efficiency is almost always cost-saving.

Boston Medical Center, for example, which serves a large low-income Medicaid and Medicare population, was nearing receivership about a decade ago when Robert Biggio, senior vice president of facilities and support services, took a scalpel to costs, in part by finding energy efficiencies.  He reduced square footage, updated ductwork, and rerouted piping across a multi-building campus, using office building energy systems to back up systems in inpatient buildings. He moved kitchen equipment upstairs in buildings and set elevators to stop at higher floors in the event of flooding. His motivation, in addition to saving costs, was to build resiliency against Katrina-like power failures. BMC needed to be “a literal island in the storm” should a climate disaster occur, Biggio said.

Many of BMC’s targets, he conceded, were low-hanging fruit. Nonetheless, it’s work that countless other institutions have failed to undertake.

A few years ago, BMC also installed a cogeneration or combined heat and power plant, which boosted energy efficiency, and topped a nearby building with a seasonal rooftop farm. This fall, BMC opened an 82-bed inpatient behavioral health hospital in Brockton, Mass., in a repurposed nursing rehabilitation building. Fourteen miles of geothermal piping were installed, and solar panels and battery storage are being added, allowing BMC to generate 100% of the power the facility requires on site. 

Jon Utech, senior director of Cleveland Clinic’s Office for a Healthy Environment, said setting ambitious goals, and communicating them publicly, forced his team to develop energy and cost-saving strategies, and to secure an ever-growing “green revolving fund” that could be directed toward special projects. LED-lights were installed, air exchange rates cut back in operating room suites when not in use, thermostat settings tightly monitored, and food sourcing made more sustainable. Capital investments for bigger projects followed. Over a 10-year period, Cleveland Clinic ended up investing $35 million — and reducing energy consumption by more than $100 million.

Hospitals also can find savings on a smaller scale: Single-use and disposable goods have proliferated in hospital settings in recent years, and today even relatively sophisticated medical devices such as diagnostic cardiac catheters may be labeled single-use. A small reprocessing industry has grown in response, to clean and sterilize devices for re-use in hospitals. Supply chain problems and price pressures may give this business a boost. Medical devices with microchips, such as those used for laparoscopic thoracic surgery, are more likely to be reprocessed now, said Dan Vukelich, president and CEO of the Association of Medical Device Reprocessors.

More incentives and changing standards

The renewable-energy credits embedded in the Inflation Reduction Act in the form of direct payments to nonprofits could be a game-changer for the health care industry, many experts say. Any health system that was considering investing in energy-saving technology may find that the numbers now work for projects that once seemed out of reach.

“It’s simple math,” said Cleveland Clinic’s Utech. “It will make funding of renewable energy more feasible and will dramatically lower the cost of some projects.” The health care sector, Washington, D.C., health care research and policy consultant David Introcaso wrote recently, should view the act as “a $369 billion gift.” 

Hospitals serving low-income communities may find they can leverage additional incentives in the law aimed at these neighborhoods by investing in, for instance, megawatt solar installations or electric vehicle infrastructure that will provide energy and charging stations to be used both by hospitals and area residents, said Antonia Herzog, associate director of climate policy and advocacy at Health Care Without Harm, an organization that works to promote environmental health and justice globally.

The Joint Commission, in developing new climate-related hospital accreditation standards, may focus on leadership and governance as it did in its recently proposed new standards around the reduction of health disparities, said the commission’s CEO, Jonathan Perlin. An advisory panel of technical experts should offer recommendations to the commission within a month or so, Perlin said, adding that he anticipates that new climate standards might be introduced early in 2023.

Whatever decarbonization standards are adopted, he said, will be “directional rather than prescriptive.” Eventually, the organization may develop a higher-level certification for hospitals seeking to demonstrate excellence in meeting health equity and carbon reduction goals. Climate change, said Perlin, is “a health equity issue because the same individuals in communities with disenfranchisement from health care are also the least able to compensate for the effects of climate change.” 

In other words, he said, “They just can’t buy themselves out of the immediate threats.”

Incentives and accreditation standards that have nationwide reach could help accelerate change, because for years, progress on reducing carbon footprints has been a patchwork affair, tied closely to state and local building codes and legislative fiat. California has consistently led the nation in this regard, and the California energy commission has pioneered proof-of-concept projects that demonstrate the viability of localized micro-grids that use solar panels, batteries, and fuel cells. Kaiser Permanente installed a 250-kilowatt solar panel micro-grid at its medical center in Richmond, Calif., to store energy and augment energy supply at peak times and is now building a much larger grid at its Ontario hospital in southern California. 

Hospitals nationwide, seeking to generate their own power onsite, may soon follow suit. Beginning in 2023, said Mazzetti’s Vernon, the national electrical code will no longer require that every hospital have its own diesel generator on site to generate emergency power. And energy-saving building codes endorsed by the Department of Energy — but long ignored in some states — may be followed more broadly in the future, now that FGI, a nonprofit that promulgates planning, design, and construction guidelines for health care organizations, is recommending compliance if there’s no existing code in the state. “It’s painfully slow,” said Vernon, “but the regulators are starting to move toward decarbonization.”

Some emissions are harder to reduce than others

The widely quoted statistic that health care accounts for 8.5% of the nation’s emissions was developed by Matthew Eckelman, associate professor in the department of civil and environmental engineering at Northeastern University, Yale’s Sherman, and other colleagues. They crunched data on national health expenditures and used environmental input-output models from the EPA to publish their first analysis in 2016, and followed with an update published in 2020. More recent data, as yet unpublished, indicate that the pandemic may have put a small dent in emissions, Eckelman told STAT.

Hospital care expenditures are the biggest driver of health care emissions, accounting for 35% of them, while spending on physician services account for about 13% and on pharmaceuticals for 12%. And among all U.S. industries, hospitals are second only to food services companies in energy intensity.  

Another way to slice the data is to look at direct and indirect sources of emissions. Diesel and other energy sources like natural gas that hospitals use to heat and power their buildings produce direct emissions known as Scope 1 emissions, according to the greenhouse gas emissions protocol developed by the World Resources Institute. (Also included in Scope 1 are emissions from anesthetics and other volatile gases produced by a hospital’s operations, and fleet vehicle emissions.)

Electricity purchased from utilities produces emissions known as Scope 2.

Together, Scope 1 and Scope 2 emissions account for not quite 20% of total health care emissions, Eckelman and his colleagues found. So-called Scope 3 emissions encompass everything else, from emissions attributable to employee transportation, travel, and waste to emissions generated in the production of purchased goods such as drugs, devices, and PPE.

Of the three types of emissions, the easiest to reduce are Scope 2 emissions, by cutting back on purchased electricity. Tackling Scope 1 emissions is a greater challenge, because many hospitals are operating with legacy heating systems. More than 200 hospitals have built cogeneration — or co-gen — plants. In addition to protecting hospitals during outages, these plants save energy by recycling steam heat. But those savings only get the hospitals so far.

Anesthetic and volatile gas emissions (though not included in Eckelman’s and Sherman’s research) have for many hospitals become a prime target for reduction because it’s relatively easy. Plugging leakages of anesthetic gases in the operating room and replacing higher-emitting anesthetics like desflurane with lower-emitting substitutes have brought emissions down, and coincidentally saved costs.

Scope 3 emissions, which account for a whopping 80% of all hospital emissions, are often devilishly difficult to rein in, because their sources are manifold and largely out of the control of health system purchasers. Each pill, gown, saline bag, and bowl of broth served in a hospital has embedded carbon attached to the various stages of its production. The same goes for the array of services from finance to IT. All of these emissions comprise Scope 3. 

For now, hospitals are focusing on the Scope 3 items they can fairly readily measure: emissions from staff commuting, business travel costs, and waste.

Some hospitals are doing extensive — and at times stomach-turning — waste audits in ERs, ORs, and ICUs, where researchers and medical staff volunteers suit up to document every item of waste produced over a 24-hour period, including biological, “red bag” waste, paper recycling, and used needles tossed in sharps containers. “Hospitals know how much waste the whole hospital is generating,” said Cassandra Thiel, a civil engineer and assistant professor at NYU Langone Health, who first studied waste in the OR setting. But, she said, they have to do extensive audits of different waste streams to get a better idea of the problem areas. “I still find it a little bit gross, but I am amazed at the garbage that’s generated and the inefficiencies when it comes to supply utilization in these health care settings,” Thiel said.

How to get to a better place

In the current political environment, it seems unlikely that the stick of federal regulatory mandates will be wielded in the health care sector anytime soon. Carrots, in the form of tax credits and cajoling, in the form of pledges and industry peer pressure, will have to do the job of making hospitals deal with climate change.

And, perhaps, the growing sense that inaction isn’t an option, especially when it’s clear that more and more the very infrastructure of hospitals is vulnerable. 

Framing the issue in a way that resonates for executives and regulators unfamiliar with scopes, megawatts, and the like can be a challenge. Flooding makes those directly in harm’s way aware of the need to build resilience. But for many, the benefits of reducing greenhouse gases may seem too abstract, too far in the future, and not an urgent task.

Yet on the Atlantic and Gulf Coasts alone, more than half of the hospitals in 28 of 75 metropolitan areas are at risk of flooding from relatively weak hurricanes, according to a study led by Aaron Bernstein, the director of the Center for Climate, Health and the Global Environment at the Harvard T.H. Chan School of Public Health. 

“We’re beginning to frame this as an organizational risk,” said Cecilia DeLoach Lynn, director of sector performance and recognition at Practice Greenhealth, a nonprofit that consults with a network of about 1,400 hospitals on sustainability solutions. The nonprofit is telling hospital executives in their network, “Here’s your opportunity space to not be left behind,” she said.

This story is part of ongoing coverage of climate change and health, supported by a grant from The Commonwealth Fund.

Correction: An earlier version of the per capita health care spending chart had an incorrect figure for Canada.