Healthcare providers could reduce annual energy costs by over a third
The operational efficiencies that can improve patient outcomes
By implementing operational efficiencies, we helped one of New Jersey’s largest healthcare systems save 35% annually on its electricity costs – savings that are being reinvested into patient care.
This matters more than ever because pressure on healthcare budgets has reached an all-time high. In a recent survey by Centrica Business Solutions, 35% of healthcare respondents cited managing rising costs and providing a comfortable care environment as the joint number one challenges for the next 12 months1.
However, with providers necessarily focusing on frontline patient care, ‘back room’ operations have been deprioritized. Growing inefficiency and energy waste inevitably follows, creating a vicious circle of spiraling costs. To break the cycle, healthcare providers need to maximize operational efficiencies – particularly across energy infrastructures – to enable funds to be diverted into patient outcomes. Tackle energy efficiency head on and you can not only cut costs, but also generate new sources of income. The question is: how?
Energy fixes that free up funds
New energy technologies and approaches provide numerous opportunities for eliminating avoidable spend and optimizing operational performance – some of which are relatively simple fixes.
For example, 30% can be saved on lighting by using automated sensors, compared to manual interventions2. And a regularly serviced boiler can save as much as 10% on annual heating costs3.
On-site generation – such as combined heat and power (CHP) and solar – can also deliver significant cost savings over traditional energy sources. In the case of the New Jersey healthcare system, for example, we implemented a trigeneration system (where a natural gas generator produces electricity while the free by-products of the system – heat – simultaneously produce steam, chilled water and hot water). The solution generates 60% of required energy on-site and saves 35% annually on electricity costs.
Seeing where energy is being wasted and identifying inefficiencies can be particularly challenging with older physical plants. But today’s energy insight tools can make a significant difference. Advanced sensor solutions pinpoint to device level exactly how energy is being used, and analytics tools identify key areas for improving operational efficiency.
Overcoming limited resources
With 58% of healthcare respondents agreeing that “we do not have enough internal expertise to monitor and implement efficiency improvements,”1 limited resources can appear insurmountable. But, by outsourcing energy management to specialist companies, you can access these cost-saving technologies while taking advantage of greater expertise, flexible funding models and economies of scale.
When New Jersey’s Overlook Medical Center outsourced its energy management in order to access new technology, the facility achieved $2m+ annual savings by installing a CHP unit. This could pay for two new MRI scanners or 30+ additional nurses.
Our Perspectives Series article enables you to find out more about the operational efficiencies that can improve your patient outcomes, including how we helped Excela Health generate $50k in earnings. We highlight the new technologies available and set out the energy strategies we believe you should prioritize to enable you to invest more in patient outcomes.
1Energy Advantage Research, Centrica Business Solutions. Statistics based on a six country survey of more than 1,000 energy decision-makers in large organizations, 2The Facts on Medicare Spending and Financing - The Henry J. Kaiser Family Foundation, July 2017, 3The Carbon Trust Hospitals Sector Overview