The COVID-19 pandemic is sparking an interest on health systems’ energy costs, a new report found.
The U.S. healthcare system spends $8.8 billion a year on energy, but it is an often-overlooked sector, according to a healthcare construction report from construction firm Robins & Morton. COVID-19’s squeeze on hospital revenue has reignited cost-cutting initiatives, which increasingly involve reducing energy costs, cutting carbon use and infrastructure efficiency, construction experts said.
“It’s difficult for a lot of (healthcare companies) to look at their buildings and spend millions of dollars on a system that could generate a seven- to 10-year payback or invest an equivalent amount of money into an operating room expansion that can increase revenue by a quarter of a million dollars a day,” said Kyle Davis, senior mechanical preconstruction manager at Robins & Morton. “But hospitals are finding out that they can use less energy and reduce maintenance costs.”
Providers are less willing to cut labor costs as they navigate workforce shortages, which means they are turning to other areas to reduce their overhead.
Davis noted AdventHealth’s new emergency department in Central Florida. Robins & Morton helped install a more energy efficient cooling system that reduced the size of the pumps and piping, generating about $500,000 in upfront savings alone, he said.
Florida and its humidity can wreak havoc on heating and cooling systems, potentially leading to mold growth and other workplace hazards, Davis said.
“You can put Band-Aids on things and it can cause problems in other areas,” he said. “That’s what we try to avoid.”
Health systems are also looking into renewable energy, which could help insulate them from natural disasters that cut off power.
JLL, for example, helped Adventist Health install more than a dozen power panel systems at 15 of its healthcare campuses across California and two in Hawaii to supplement its energy needs. The renewable energy source, coupled with conservation and efficiency strategies, is expected to save the system tens of millions of dollars over a 10-year period, JLL said.
Adventist may move to a micro-grid that could help generate their own energy, said Matthew Atwong, the corporate engineer director for JLL.
“When you have a micro-grid you are essentially energy independent,” he said. “You use solar to generate energy and store it in a battery, or you use cogen facilities if you have natural gas. But then you have to develop the micro grid controller to store and redirect the power as needed.”
In addition to energy efficiency, health systems are investing in modular, flexible building designs, which “will be fundamental characteristics of every future renovation or newly built project,” Scott Bullock, division manager of preconstruction at Robins & Morton, said in the report.
The construction firm is designing operating rooms that can convert into isolation rooms, Davis said.
“We went through the same exercise with Ebola, but that didn’t lead to action like COVID. Everyone hit the breaks because they didn’t want to spend the money,” he said, adding that systems are spending an extra $600 million on mechanical systems that can facilitate isolation floors. “Now it is a reality.”