As Reimbursements Decline, Providers Find it Easier to Go Green

In case you hadn't noticed, many physician specialties are in store for reduced reimbursements in the years ahead, as we transition to a payment system that is less and less reliant on fee-for-service and more focused on patient outcomes.

That leaves independent physician practices in a bit of a predicament. Sure, if you lead a practice, and if you're a smart planner, you're spending all the time you can to get your electronic medical record implemented in a "meaningful" way, if you know what I mean.

You're also reordering your staff's work priorities so that your high-dollar clinical employees spend time with patients, not with paperwork or scheduling. But you should also spend some time looking over your real estate, building, and operations costs as well.

That might mean scouting new locations if your practice is expanding, as has been the case for the (Portland) Oregon Clinic over the past two decades., Administrator Philip W. Armstrong sought savings wherever he could find them, and in building a new location for the expanding practice, he looked into green building techniques not only as public responsibility, but also as a way to save serious cash.  

If you're looking for the epicenter of the green building movement, you could do worse than pinpointing your map to Portland, where the Oregon Clinic is among a swath of businesses that are using green techniques in construction and saving money now. The multispecialty group practice has grown from 40 physicians at its birth in 1993 to 125 now, and by 2006, the location where its specialists are housed was outgrown.

With a need for a 100,000-square-foot medical office building, Armstrong knew he had the critical mass to make a LEED-certified building pay off. LEED stands for Leadership in Energy and Environmental Design, and the organization provides third-party certification for certain stages of environmentally friendly architectural and structural design.

Basically, it measures how energy efficient and environmentally friendly a building design is, and while the certification isn't always a tool to save money, that's exactly what happened in the Oregon Clinic's case.

LEED is relatively new in healthcare, says Armstrong, who completed the building in late 2006, and is just now able to do some cost benefit analysis on the features of the clinic's new medical office building.

"A lot of the initiatives have historically been used in commercial office building settings, and with the different requirements that medical construction has, some didn't transfer well," he says.

That meant being inventive with design.

"The interesting thing is you can't tell it's an environmentally friendly building just on a cursory glance," he says.
The main initiatives that got Oregon Clinic the coveted "Gold" certification from LEED are invisible to the viewer, but not to the bottom line.

Rather than having rain runoff (with which Portland is unusually blessed) diverted to the storm sewer system, it goes directly into a storage tank which then uses the water for flushing toilets and irrigation. It's a seamless system, and when the tank gets low, usually toward the end of summer, it automatically switches the toilets to city water. The tank can also be used for watering of outside vegetation, if necessary. That saves the clinic about $5,500 annually on its water bill.

Further, heating a cooling are optimized by timers, better insulation, and the use of natural light, when possible. The clinic saves about $20,000 a year over a conventional building on lighting and HVAC costs. Further, it used recycled materials when possible on other construction needs.

"One of the lessons is it takes a good year to get all the energy options really effective," he says.

Armstrong cautions that the payback comes over time, but it won't take long, given that he estimates 25% annual savings in utility costs over a comparable traditional building. Further, at least in Portland, the clinic qualified for significant business energy tax credits, which are returned to the owners, the physicians, in the form of offsets.

Armstrong knows the annual savings are a drop in the bucket compared to the projected impact of reduced reimbursements, but "they do make a difference."