As a hospital, you most likely use natural gas for space heating, cooling and heating your facility's water – and chances are you use a lot of it.
So, you've probably been pleased with the low prices of natural gas since 2015, saving your facility critical dollars on a top-line budget item.
If your hospital uses more electricity than natural gas, those prices have probably dropped, too, because the price of fuel is one of the biggest determinants of electricity costs.
Temporarily low prices, combined with competing priorities, can make it easy not to prioritize energy tracking and conservation efforts. However, with the volatility and unpredictability of the various factors driving energy costs, a proactive approach could save your hospital thousands (if not millions) in the long run.
Why you should prepare for the unpredictable
Many aspects of healthcare administration are unpredictable, and the cost of your utilities is no different. The price of natural gas can fluctuate due to factors beyond your control, such as:
• Strength of the economy
• Weather (both seasonal and severe conditions)
• The ability to produce and store oil at a given time
• Competition with other fuel sources
In 2008 the price of a barrel of oil fluctuated between $32 and $145.85. Who's to say something couldn't happen tomorrow, next month or even next year that would cause a drastic increase in your facility's energy costs?
When utility bills are likely to increase at home, you can take unusual measures like wearing multiple layers indoors to keep your costs down. You don't have that luxury in a hospital, where the safety and comfort of your patients is critical.
By tracking your facility's energy, identifying trends in usage and seeking out ways to save now, you are setting yourself up for success when prices increase, and ultimately, protecting your bottom line.
The importance of implementing change
According to the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE), the average hospital uses 2.5 times the amount of energy compared to other commercial buildings. This isn't surprising when you consider the many different technologies, utilities and systems that must run 24/7 so the facility can properly care for patients.
To achieve this while also remaining profitable, proactive changes you can implement include:
• Audit existing equipment for energy waste
• Upgrade to more efficient lighting
• Change air filters, check cabinet panels and clean condenser coils regularly
• Look to reduce inefficiencies in laundry and waste management
• Implement an energy management system in your facility
Hospitals across the country have started to adopt energy management systems (EMSs) as a means of cost savings. According to Navigant Research, global revenue for these types of systems is expected to grow from $948.8 million in 2015 to $2.2 billion by 2024 in healthcare facilities alone.
Creating a culture of conservation
Once you implement energy tracking and efficiencies in your hospital, what's next? Sharing data about your improvement far and wide throughout your organization will get stakeholders excited and help create a culture of conservation. Getting this buy-in will be critical to making your efforts a success.
In addition to internal stakeholders, it's important to communicate your savings and plans to reinvest in equipment, staff and patient satisfaction measures to the public. Demonstrating your commitment to conservation in the community you serve will bolster your reputation, keep you top-of-mind in a competitive healthcare environment and maximize your hospital's ROI.
Be confident in the future, one energy bill at a time
While your hospital's energy costs might be "low" now, why not save even more money? Instead of simply paying the bills as they come in, see where efficiencies could be made.
Just as your operations team creates a capital plan to predict the future of your most critical assets, you should be tracking your energy to gain some insight into monthly use and cost. Just as preventive maintenance is designed to extend the life of your facility's assets, tracking your energy use is designed to help see where you could be more efficient and where significant cost savings can occur.
With increasing competition in healthcare, the quality of your facility has a great impact on the reputation and reviews of your hospital – which can connect back to your patient satisfaction and revenue.