EnergySmart Hospitals: A Comparative Review

EnergySmart Hospitals: A Comparative Review
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Richard Krasner
Florida Atlantic University
HSA 6937
Current Topics in Health Care Mgmt.
Dr. Radlauer
July 12, 2010

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Table of Contents
Introduction ..................................................................................................................... 3
EnergySmart Hospitals Initiative ..................................................................................... 6
BetterBricks Initiative ..................................................................................................... 10
Smart Hospital Efficiency Program ™ ........................................................................... 13
Conclusion .................................................................................................................... 16
References .................................................................................................................... 18

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Introduction
The oil spill in the Gulf of Mexico, and the wars in Iraq and Afghanistan, which are
basically about energy, have focused our attention on that issue as never before. For more
than thirty years, American presidents have talked about our need to move away from our
dependence on foreign oil, and more recently, to become more energy efficient. There
have been some meager steps taken in that direction throughout American industry, with
the introduction of hybrid cars and energy efficient heating and cooling systems, better
insulation, and solar panels, to name a few of the changes taking place.
As future healthcare professionals, the subject of energy efficiency in healthcare is
just as important as any other aspect of healthcare administration. In a business context,
the case for energy efficiency is compelling for hospitals; with energy costs representing
one of the few cost centers hospitals have significant control over (U.S. Department of
Energy [DOE], 2008). Spending by US hospitals amount to over $5 billion annually on
energy (Ray, 2010; USDOE, 2008), which is equal to 1 – 3% of total budget, and
equivalent to at least 15% of profits (USDOE, 2008).
According to the DOE’s Commercial Buildings Energy Consumption Survey
(CBECS, 2003), hospitals use 836 trillion BTU’s of energy annually and have more than
2.5 times the energy intensity and CO2 emissions of commercial office buildings, producing
over 30 lbs. of CO2 emissions per square foot (Ray, 2010; USDOE, 2008).

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The US health care sector ranks second, behind the fast food industry, as the most
energy-intensive industry, spending $8.5 billion on energy every year (Ray, 2010; World
Health Organization [WHO], 2009).
In two separate studies, one in 2007 and the other in 2008, the American Society
for Healthcare Engineering (ASHE), reported respectively that 91% of hospitals faced
higher energy costs over the previous year, and over 50% cited increases in double-digit
percentages. (2007 study, USDOE, 2008) In the second study, ASHE reported that health
care executives place a higher priority on energy efficiency than executives in other
industries, with 65% calling energy efficiency “extremely important” or “very important.”
(Ray, 2010; USDOE, 2009b)
For these reasons, forward thinking healthcare CEO’s are making a strong
business case for energy efficiency as a cornerstone of their sustainability policies.
Considering the economic, social and even personal impacts of their practices, healthcare
thought leaders have adopted a broad, systems-thinking approach to sustainability. The
result of this is that energy management now sits side-by-side with clinical and financial
governance (Ray, 2010).
The health care industry, Ray (2010) says, is embracing energy efficiency as a
viable and cost effective path to improve margins and reduce the impacts from their own
building operations (Ray, 2010). Lower reimbursements, an aging population and outdated
facilities, along with the added pressure of the current economic downturn, are

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pushing budgets to the breaking point and heightening competition for hospital dollars
(USDOE, 2009b).
There are many health care organizations, however, that are acting too slowly or
falling short on execution. Many have not integrated sustainability into their business
functions, nor developed a plan to measure, track and report their sustainability efforts.
They are still asking, according to Ray (2010), whether or not dedicating effort and staff
towards strategic resource management (SRM) is a good business investment and are
struggling to create and manage organization-wide sustainability initiatives (Ray, 2010).
In my research, I found many examples of healthcare organizations who are taking
energy efficiency very seriously. In doing so, they are relying on a number of initiatives and
programs, some government-sponsored, and some private, that are making a difference in
these organizations’ energy efficiency. The subject is too exhaustive for the scope of this
paper, but I will be focusing on reviewing three of these initiatives or programs. They
represent some of the best methods hospitals have for reducing their carbon footprint,
reducing their energy costs, saving money and even improving the overall care and health
of their patients, which is one of the main reasons for doing so, since improved energy
efficiency has a tremendous impact on the health and comfort of patients in a hospital.
I will begin by discussing the U.S. Department of Energy’s EnergySmart Hospital
Initiative, then look at a private initiative from the Northwest Energy Efficiency Alliance’s

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BetterBricks initiative, and lastly, discuss the Hospital Financial Service Corporation’s
Smart Hospital Efficiency Program (SHEP) ™. In the conclusion, I will make some
recommendations on how a hospital can create a lower carbon footprint, and lower their
total energy costs.
EnergySmart Hospitals Initiative
One of the federal departments on the libertarian/tea party agenda for dismantling
is the U.S. Department of Energy, created in the late 1970’s by Jimmy Carter. The typical
cry one hears from this crowd is that government does not know how to do anything right
and therefore the private sector can do a better job. While this may be true in some areas,
in others, the government does a pretty good job. One of those areas is helping individuals
and organizations to solve problems such as energy efficiency.
One such way the government is helping healthcare organizations to solve their
energy problems is through the EnergySmart Hospitals initiative launched by the
Department of Energy in 2008. EnergySmart Hospitals was created to increase the use of
energy efficient technologies in US hospitals. It targets a 20% improvement in efficiency
for the 8,000 hospitals in the country, and a 30% improvement over current standards in
new construction (Ray, 2010).

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The EnergySmart Hospital initiative supports hospitals with the tools and resources
needed to integrate energy-efficiency and renewable energy technologies into hospital
design, construction, retrofit, and operations and maintenance. Through its’ partnerships,
design support, training, and outreach, EnergySmart Hospitals is validating the benefits of
energy efficiency and renewable energy strategies to meeting mission-critical goals while
impacting the organization’s bottom line (USDOE, 2009b).
EnergySmart Hospitals is supporting leaders of hospitals by developing technology
assessments and case studies as well as targeted factsheets on HVAC,
lighting/daylighting, boilers and chillers, power alternatives, medical equipment, and plug
loads, water efficiency, renewables, and benchmarking (USDOE, 2009b).
One such case study mentioned on the department’s website, focuses on the
Gundersen Lutheran Health System in La Crosse, Wisconsin. In 2008, Gundersen
Lutheran set out to improve the well-being of the community while lowering healthcare
costs. Their EnVision Program reduced baseline energy consumption and costs by 20%
by the end of 2009, and they are well on their way to realize their goal of offsetting
remaining energy consumption with renewables to achieve 0% net energy consumption by
2014 (USDOE, 2009b).
Goals of EnergySmart Hospitals
 Promote 20% improved efficiency in existing buildings and 30% in new
construction
 Increase efficient and renewable energy applications in hospitals
 Reduce energy use and operating costs
 Create healthier healing and work environments

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 Maximize successful hospital upgrades and design strategies
 Ensure reliable backup power during disasters
 Improve environmental performance
(USDOE, 2009b)
One way EnergySmart Hospitals is achieving these goals is through the Buildings
Technology Program from the Department of Energy’s Office of Energy Efficiency and
Renewable Energy. The Buildings Technology Program is primarily concerned with
improving design and construction through a combination of energy-efficient technologies
and Integrated Building Design (IBD) to maximize new hospital performance (USDOE,
2009a).
Integrated Building Design (IBD) is a process that unites people, systems, business
structures and practices through three phases: Pre-design, Conceptual/Architectural, and
Construction and Operations. Each phase consists of multiple steps and processes to plan
and build an EnergySmart Hospital (USDOE, 2009a). For existing hospitals, EnergySmart
Hospitals recommends creating a comprehensive Energy Management Program. To
initiate a program, they outline four steps hospitals need to take.
Step 1 — Create Awareness of the Opportunity: Let the staff
know and provide support
Step 2 — Perform Baseline Mapping: Create Hospital Energy
Map from energy use data and cost figures
Step 3 — Develop a Compelling Vision: Organize an Energy
Management Steering Committee

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Step 4 — Turn the Vision into Action: Establish metrics and
implement comprehensive “whole building” energy
management program
(USDOE, 2008)
Once you have completed step 1 through 4, you can create and implement your
energy management program as outlined below:
(DOE, 2009a)
1. Establish
Target Energy
Goals &
Baseline
2. Model
Energy
Consumption &
Review
3. Identify
Improvements
4. Develop
Financial
Analysis
5. Select
Activities
6. Implement
Activities
7. Confirm
Performance
8. Perform
Necessary
Maintenance
30/60/90% Design Reviews

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BetterBricks Initiative
A different approach to energy efficiency in healthcare is happening in the Pacific
Northwest, which is an area of the country that is leading the way in energy conservation
and sustainability. The Northwest Energy Efficiency Alliance (NEEA), a non-profit
organization funded by Northwest electric utilities, introduced their BetterBricks Initiative,
which for the past four years has been working with healthcare systems, utilities, market
specialists and partners to validate the business case for change and implement long-term
solutions for strategic energy management (Ray, 2010).
NEEA partnered with the American Society of Healthcare Engineering’s (ASHE)
Energy Efficiency Commitment (EC2), launched in 2006, to encourage members to
benchmark the energy use of their facilities using ENERGY STAR® Portfolio Manager and
to recognize organizations that reduce energy consumption by 10% or better (Ray, 2010).
They have also been helping executives and facility managers at leading hospitals and
health systems to take a more strategic approach to energy and resource use (Ray, 2010).
Energy costs which typically represent up to three percent of a hospital’s operating
budget can be reduced, as Ray (2010) mentions, easily by 10 to 30% at little or no cost
(Ray, 2010). NEEA’s approach influences business practices across an

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entire organization including how hospitals can tune-up, operate and maintain equipment
and systems; how they can upgrade and purchase equipment and services; and how they
design and construct buildings. NEEA’s collaboration with healthcare systems has,
according to Ray (2010), produced impressive results (Ray, 2010).
Ray (2010) highlights several examples of healthcare systems that have achieved
such results, and I will highlight three of them here. The first system is Legacy Health in
Oregon. They realized savings of more than $1.3 million per year for the past three years.
They are on track to reduce energy use intensity by 10% per square foot (Ray, 2010).
Peace Health, in Bellevue, WA, with 925 beds and serving 53,000 inpatients and a
half a million outpatients in 2009, determined that a cumulative 10% reduction in energy
use could be attained over three years, leading to a savings of up to $800,000 a year
system-wide. In the first year of implementing its’ Strategic Energy Management Plan.,
they achieved a three percent reduction in energy consumption, representing $240,000 in
energy savings (Ray, 2010).
Lastly, Northwest Healthcare’s Kalispell Regional Medical Center in Montana, with
174 beds, identified more than $63,000 in total annual savings, reducing energy use by
1.6 million kWh (kilowatt hours) (Ray, 2010).
And this year, the University of Washington’s Integrated Design Lab, with the
support of NEEA’s BetterBricks Initiative, release a report titled, “Targeting 100!
Envisioning the High Performance Hospital: Implications for A New, Low Energy, High

12
Performance Prototype” (University of Washington, 2010). The research in the report
provides a conceptual framework and decision-making structure at a schematic design
level of precision for hospital owners, architects and engineers. It offers access to design
strategies for new hospitals to utilize 60% less energy (University of Washington, 2010).
The report is designed as a tool and frame of reference for moving energy
efficiency goals forward, and a path toward achieving the 2030 Challenge energy goals,
adopted by architects, engineers and owners to reduce energy consumption and
greenhouse gas emissions in buildings. Every five years, a greater reduction in energy use
is targeted. The goal between 2010 and 2015 is 60%, with the goal of reaching net zero
energy demand by 2030 (University of Washington. 2010).
BetterBricks, therefore is making sure that they have the most up-to-date and
scientifically available data and technology to help healthcare systems and hospitals to
lower their energy usage and to save money. The 2030 Challenge is a reasonable
approach to solving the problem hospitals face in saving energy and money.
Unfortunately, it does not help those hospitals and healthcare systems that are not new
and therefore not able to take advantage of the findings of this report. Older hospitals and
healthcare systems may benefit from the next example, especially if they are unable to
spend revenue on refitting and replacing old lighting and roofing, which can be expensive
for some hospitals in major urban areas.

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Smart Hospital Efficiency Program ™
For nearly twenty years, the Hospital Financial Service Corporation (HFSC), along
with its’ principals, have been administering the privately funded Trade Grant Program
called the Smart Hospital Efficiency Program ™ (SHEP). This program is designed to help
facilities decrease energy consumption and increase efficiency through a combination of
innovative technology and Smart Hospital Efficiency Program funding (HFSC, 2010).
SHEP consists of two separate programs, one for roofing and one for lighting. As
the table below shows, both programs are nearly similar, but the roofing program carries
with it a little higher funding percentage than that of the lighting program.
Program Description
Energy Conservation Roof (ECR)
Up to 70% Funding
R-19 Roof Programs Maximum: $2,000,00
Roof Grant, Energy Reduction Roof Funding, Roof Financing,
Green Roofs
Energy Conservation Lighting (ECL)
Up to 50% Funding
Inside & Outside Efficient Lighting Solutions Maximum:
$2,000,000
Lighting Grant, Energy Reduction Lighting Funding, Lighting
Financing
(HFSC, 2010)
To get an even better picture of the how the two programs work, let’s first look at the
roofing program and explore how HFSC provide assistance to hospitals needing a retrofit
to their roofs.

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The Energy Conservation Roof Program (ECR) offers hospitals financial assistance
from 35% to 70% of the cost of retrofitting their roof. The requirements for approved retrofit
solutions vary depending upon the unique specifications for each application, but there are
two basic requirements for eligibility. The project must include, as part of the
specifications, an average insulation value of R-19 to increase energy efficiency of roofing
system, and that the project must also be at least 25,000 square feet (HFSC, 2010).
Once a project is approved, the applicant has one year to complete the project. The
funding solutions applied to a particular project are outlined below.
Part A Trade Grant
Cash Grant Financial Assistance
Hospital Grants: Cash grant of up to 35%
of the cost of the approved energy
efficiency project.
Part B Trade Funding
Optional Roof Financing
Hospital Funding: Roof funding of up to
35% of the cost of the approved energy
project.
Energy Reduction Funding
Funding for Government Facilities Only
Energy roof funding of up to 35% of the
cost of the approved energy project.
(HFSC, 2010)
The other program administered by HFSC is the Energy Conservation Lighting
Program (ECL). Unlike the Energy Conservation Roof Program (ECR), the Energy
Conservation Lighting Program has three solutions. The first is the Indoor Lighting
Solutions (ECL-Indoor), which provides financial assistance to hospitals in need of funding
for interior lighting retrofit projects. Some of the technologies used for these indoor
projects include LED T-8 lamps, energy efficient T-5 and T-8 fluorescent lamps (HFSC,
2010).

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The second solution, the Outdoor Lighting Solutions, provides financial assistance
for exterior lighting retrofit projects. As a requirement of the program, all lamp technology
must be Energy-Star approved that saves energy, reduces CO2 emissions, and are
maintenance free up to 100,000 hours (HFSC, 2010).
The last solution is the Fluorescent Lighting Efficiency Boost Solutions (ECL-Efficiency).
It utilizes patented technology that is designed to lower kWh (kilowatt hour)
consumption in fluorescent lighting systems. The savings that can be achieved can be up
to 15% without much foot-candle loss (HFSC, 2010). The following table will, as in the
previous table, highlight the funding solutions for approved ECL projects.
Part A Trade Grant
Cash Grant Financial Assistance
Hospital Grants: cash grant of up to 25%
of the cost of the approved energy
efficiency project.
Part B Trade Funding
Optional Lighting Financing
Hospital Funding: funding of up to 25%
of the cost of the approved energy project.
Energy Reduction Funding
Funding for Government Facilities Only
Energy Reduction funding of up to 25%
of the cost of the approved energy project.
(HFSC, 2010)

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Conclusion
We began this look at the idea of EnergySmart Hospitals with the crisis in the Gulf
of Mexico, and the two wars in Iraq and Afghanistan bringing the focus of the nation on the
issue of energy back on the front burner. Every day we hear about new ideas and
technologies being developed to end our dependence on oil and to lower our carbon
footprint. States, counties, cities, towns, businesses large and small are finding new ways
to conserve energy, save money and protect the environment. The healthcare industry is
no exception.
The three initiatives and programs we have looked at are no means the final word
on the subject, and represent only a tiny fraction of the energy-saving solutions that exist
for hospitals and healthcare systems to avail themselves of. As we have seen, many
hospitals and healthcare systems are already on the road to energy conservation, energy
efficiency and sustainability. From my research, there are many others that are just now
beginning to make the same decisions the leaders of these organizations have already
taken.
As future leaders in the healthcare industry, it is incumbent upon us to be aware of
the need, necessity, and ethical and moral imperative to become energy efficient in the
healthcare industry. It is not just about saving money, or the earth; it is about saving the
lives of every man, woman and child we as healthcare leaders will be responsible for in

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our many roles in the future. Reducing energy consumption and building a more
sustainable healthcare system also will improve the health of our patients.
So in order to prepare ourselves to tackle this vital issue, here are some of my
recommendations for creating an EnergySmart hospital or healthcare system. First, seek
out any and all assistance that is available in or out of the healthcare industry. The
Hospital Financial Service Corporation is one avenue to pursue within the healthcare
arena. Second, check with the Department of Energy, your state energy conservation
agency, or local agency for their advice and assistance. Third, contact your local electric
utility or gas company and find out what programs they offer to reduce energy
consumption. Fourth, find out if there is a similar alliance in your region of the country like
the Northwest Energy Efficiency Alliance. And finally, keep up with trends in healthcare
administration that offer ideas and solutions to your organizations energy needs, so that
your organization can become a leader in energy efficiency and sustainability.

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References
Energy Weekly News, (2008, August). Healthcare Executives Place Higher Priority on
Energy Efficiency Than Others, Research Shows, as cited in Ray, D., (2010).
Healthcare: A Business and Ethical Case For Sustainability. BetterBricks Initiative
Retrieved from http://www.betterbricks.com/graphics/
assets/documents/BB_Article_EthicalandBusinessCase.pdf
Hospital Financial Service Corporation, (2010). Smart Hospitals Efficiency Programs ™,
Retrieved from www.hospitalfinancial.com
Ray, D., (2010). Healthcare: A Business and Ethical Case For Sustainability.
BetterBricks Initiative, Retrieved from http://www.betterbricks.com/graphics/
assets/documents/BB_Article_EthicalandBusinessCase.pdf
U.S. Department of Energy, Commercial Buildings Energy Consumption Survey
(CBECS) (2003), as cited in U.S. Department of Energy, Office of Energy
Efficiency and Renewable Energy , Building Technologies Program,
EnergySmart Hospitals Creating Energy Efficient. High Performance Hospitals,
Retrieved from http://www.iowadnr.gov/waste/p2/files/08h2e_doefact.pdf

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U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy ,
Building Technologies Program, (2008). EnergySmart Hospitals Creating Energy
Efficient. High Performance Hospitals, Retrieved from
http://www.iowadnr.gov/waste/p2/files/08h2e_doefact.pdf
U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy,
Building Technologies Program, (2009a), EnergySmart Hospitals: Improving
Design and Construction, Retrieved from
http://apps1.eere.energy.gov/buildings/publications/pdfs/energysmarthospitals/esh
_improving-designfs.pdf
U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy,
Building Technologies Program, (2009b), Energy Efficiency and Your Hospital’s
Bottom Line, Retrieved from https://www1.eere.energy.gov/buildings/
energysmarthospitals/bottom_line.html
University of Washington, (2010). Targeting 100! Envisioning the High Performance
Hospital: Implications for A New, Low Energy, High Performance Prototype
Executive Summary, Retrieved from

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http://www.betterbricks.com/graphics/assets/documents/Targeting100_ExecutiveSu
mmary_Final.pdf
World Health Organization, (2009), Health Hospitals, Healthy Planet, Healthy People:
Addressing Climate Change in Healthcare Settings, as cited in Ray, D.,
(2010). Retrieved from
http://www.who.int/globalchange/publications/climatefootprint_report.pdf

EnergySmart Hospitals: A Comparative Review

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