Energy management is often overlooked by healthcare executives looking to improve margin without impacting people, equipment, or programs. There are several avenues to lower costs in energy management from supply side bulk acquisition of power through a buying coalition to capital equipment-driven control system solutions on the demand side.
In between those two approaches lies a great opportunity to lower costs by simply making what you have run more efficiently. The following describes how one facility took advantage of this unique software driven approach to improve margin through energy management without major capital purchases.
Problem: A 400-bed East Coast medical center was looking for ways to lower costs with initiatives that did not directly impact labor. Like many healthcare organizations that were born well over 100 years ago, there were multiple buildings, additions, and expansions completed over several decades. Recognizing that energy management provided an excellent opportunity to lower costs, the hospital's administrative team sought a solution that was not capital equipment driven due to limited funds and the competition for dollars to support clinical needs.
Solution: The health system worked with MDR™ and engaged its "best practice" resource in energy to complete a no-cost energy assessment that linked to the establishment of an Environmental Protection Agency (EPA) Energy Star rating. This involved the completion of a simple two-page data sheet and a site visit to tour and inspect the major energy-related components of the hospital's plant. Based on this analysis, a baseline cost was established along with a focused work plan to achieve the targeted cost saving opportunities.
Results: All elements of the proposed work plan were accepted with an estimated annual cost savings of $143,000. The plan is currently being executed to realize the savings through better sequencing of equipment, decreasing boiler pressures, and other strategies that do not involve capital expenditures.
The take home message is cost reductions can be achieved via energy management initiatives that improve margin without reducing staff. The savings in this example would equate to deleting three bedside registered nurse positions if labor reductions were used to gain the same cost reductions.
Kevin L. Shrake (kevinshrake@mdresources.net) is a 35 year veteran of healthcare, a Fellow in the American College of Healthcare Executives and a former hospital CEO. He currently serves as the Executive Vice President/Chief Operating Officer of MDR™ , based in Fresno, Calif.
by Kevin L. Shrake
In between those two approaches lies a great opportunity to lower costs by simply making what you have run more efficiently. The following describes how one facility took advantage of this unique software driven approach to improve margin through energy management without major capital purchases.
Problem: A 400-bed East Coast medical center was looking for ways to lower costs with initiatives that did not directly impact labor. Like many healthcare organizations that were born well over 100 years ago, there were multiple buildings, additions, and expansions completed over several decades. Recognizing that energy management provided an excellent opportunity to lower costs, the hospital's administrative team sought a solution that was not capital equipment driven due to limited funds and the competition for dollars to support clinical needs.
Solution: The health system worked with MDR™ and engaged its "best practice" resource in energy to complete a no-cost energy assessment that linked to the establishment of an Environmental Protection Agency (EPA) Energy Star rating. This involved the completion of a simple two-page data sheet and a site visit to tour and inspect the major energy-related components of the hospital's plant. Based on this analysis, a baseline cost was established along with a focused work plan to achieve the targeted cost saving opportunities.
Results: All elements of the proposed work plan were accepted with an estimated annual cost savings of $143,000. The plan is currently being executed to realize the savings through better sequencing of equipment, decreasing boiler pressures, and other strategies that do not involve capital expenditures.
The take home message is cost reductions can be achieved via energy management initiatives that improve margin without reducing staff. The savings in this example would equate to deleting three bedside registered nurse positions if labor reductions were used to gain the same cost reductions.
Kevin L. Shrake (kevinshrake@mdresources.net) is a 35 year veteran of healthcare, a Fellow in the American College of Healthcare Executives and a former hospital CEO. He currently serves as the Executive Vice President/Chief Operating Officer of MDR™ , based in Fresno, Calif.