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Don't Forget Energy When Cutting Costs is a Priority

 |  By Philip Betbeze  
   April 08, 2011

I talk to a lot of senior leaders at hospitals and health systems. Lately, when asked to boil down the biggest challenge they face in coming years, the first words out of their mouths -- every single one of them -- are almost always the same:

"We've got to find new ways to squeeze cost out of the system."

Well, I've got one for you, and it's not even all that difficult to achieve: energy costs. Earth Day, is coming up, and it's as good a time as any to see if you can make some of the same changes that helped Cleveland Clinic win an Energy Star Partner of the Year award in 2011.

Cleveland Clinic spends about $1.73 a second on energy across all its facilities in Ohio, Nevada, and Florida. It's an incredible statistic, but it doesn't mean much by itself. In fact, it might seem quixotic to try to save pennies on electricity while there are bigger targets to pursue. But it's not, says John D'Angelo, the senior director of facilities at Cleveland Clinic.

"Our first building was built in 1921, and some that we've purchased are even older than that," he says. "If you look at nothing else, look at lighting."

As of 2011, for example, Cleveland Clinic has zero T-12s installed. That moniker might not mean much to you—it didn't to me—but they are very inefficient overhead lighting ballasts, says D'Angelo.

"Most organizations can get a 1- to 1.1-year payback on changing out that lighting, but nobody's looking at changing them out because the lights are still working."

Another area of opportunity lies in changing incandescent bulbs to LED or compact fluorescent bulbs. Cleveland Clinic changed out 20,000 incandescent bulbs to LEDs and several hundred thousand incandescents to compact fluorescent bulbs.

Another area of big potential savings revolves around HVAC systems, says D'Angelo. He initially thought he didn't have the manpower to increase maintenance on the HVAC. But he paid for it with savings from the lighting initiative. Changes include more frequent changing of air filters and programming to eliminate simultaneous heating and cooling, a problem which can occur often in large buildings such as hospitals.

"We rely on our automation systems and our partners who program them for us to make sure our systems aren't fighting against each other," he says.

The mistake that most people in his position make, says D'Angelo, is trying to deliver an energy conservation message without the backing of the C-suite.

Without executive-level support, advocates for conservation "end up being the lone voice from the top of the mountain," he says.

His CEO, Toby Cosgrove, MD, is an enthusiastic backer of the initiative, publicizing it internally, and he actually presents energy use metrics regularly to his board, D'Angelo says.

"We took that initial impetus from the C-suite and went to key leaders and got them to assign a volunteer to the energy committee, which deals with real-world issues on how we purchase gas and electricity and how we engage our groups. What we discuss in the energy committee gets translated out."

The savings are potentially pretty large. Cleveland Clinic is on the back end of a three-year program in which it has saved $19 million since 2008

That doesn't meant the energy spending has decreased, however. Cleveland Clinic spends essentially the same amount on energy that it did in 2008. But energy costs have risen significantly since then, and total avoided energy use measured in BTUs is a number that's almost inconceivable: 223,667,369,000. That translates into another big number: 60,456,265 pounds of CO2 equivalent saved in 2010. If that's still too big, it's the same as taking 5,280 cars off the road for a year.

The message is clear. In these times in which healthcare leadership is asking for employees to contribute ideas to reduce waste in process and in supplies, it's a mistake to leave out energy.

Philip Betbeze is the senior leadership editor at HealthLeaders.

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