Christi Grimm, the Inspector General of HHS, gave a recent keynote address to compliance professionals. In it, she said, “Simply put, the financial incentives created by risk adjustment may be driving upcoding in the severity of diagnoses to garner additional payments.”Continue reading
Hospitals nationwide are trying to recover from what AHA president Rick Pollack calls a “triple whammy.” Between “increased expenses incurred in…caring for the COVID patients,” “the decreased revenues” from “having shut down regular operations in terms of scheduled procedures,” and “the increased number of uninsured,” it’s probably no surprise that, according to AHA estimates, US hospitals are losing as much as $50 billion a month.
What is surprising, though, is how hospitals are offsetting some of those losses — to the tune of tens or hundreds of thousands of dollars a year — with significant savings from climate change sustainability. In principle, this boils down to cutting waste — wasted food, wasted paper, red bag waste, wasted electricity — and associated disposal costs.
Climate change regulations are complex, and are likely to change over time, as climate change becomes a more serious issue for regulators. Establishing a program now that fits within existing regulations, has potential to grow, and will support the hospital’s budget needs — all without violating other compliance requirements — is a significant win for compliance professionals.
As these examples show, there are opportunities now to reduce your climate risk, save money, and stay compliant:
- In Wisconsin, Gundersen Health System reduced food waste by more than 80%, saving more than $150,000 over five years.
- They also found that cutting electricity waste was as easy as changing a light bulb – actually, lots of light bulbs. Retrofitting six buildings’ light fixtures cut electric bills in half, saving 4.4 million KwH and about $265,000 a year. And those are only the direct savings. Replacing incandescent bulbs or CFLs with LEDs produces highly directional lighting. They use 75% less energy and last 25 times longer. They also cut air conditioning costs, because while incandescents give off 90% of their energy as heat, and fluorescents about 80%, LEDs give off next to none.
- Ascension Healthcare saved $53.3 million over 7½ years by reducing energy use in its 141 healthcare facilities in 20 states.
- When Minnesota-based Health Partners went paperless in 2014, their more than 90 hospitals and clinics cut paper use by 8% and saved more than $700,000 over three years. (Before you follow their example, though, you should know which paperwork can go digital and which must be filed in hard copy to comply with federal and state regulations.)
- In Olympia, Washington, Providence St. Peter Hospital decreased water consumption by 58%, saving a total of $2,510,479 on water. What’s more, they earned another $1 million in utility rebates under a state water reduction incentive program. Accomplishing this was as simple as finding and fixing leaks, replacing single-pass refrigeration units, calling a vendor to turn off an unneeded cooling pipe, and installing dual-flush toilets and slowing sinks’ faucet speeds in 165 patient rooms.
- By cutting energy consumption by 23% per square foot in its 12 hospitals and almost 400 sites of care, Advocate Health Care saved $23 million over seven years. And by reprocessing instead of discarding medical devices, they save another $2.1 million annually.
ORs and Medical Waste
- ORs account for 20-30% of a hospital’s total waste, up to 60% of its medical waste, and about a third of its expenses. By lowering the number of air exchanges per hour (ACH) from 25 to 20 (the federal and state required minimum) between surgical procedures, the Cleveland Clinic saves $250,000 a year.
- Health Partners’ waste reduction and recycling program has diverted 793,000 pounds from the ORs of all its hospitals.
- By removing 91,753 pounds of instruments from the reprocessing cycle, Dartmouth Hitchcock Medical Center saved almost $1.5 million.
- Seattle’s Virginia Mason Medical Center cut supply costs by over $3 million in three years by switching to reprocessed medical devices.
Implications for Compliance
Selling these savings to the executive board is easy. Savings like these don’t just go once to your bottom line. They stay there, year after year. What’s more, they can increase your property value by as much as eight times your investment. Reducing energy use can also earn you federal tax reductions and refunds, state matching grants, and electric utility rebates.
From a compliance standpoint, the obvious concern is whether implementing these changes to green your organization will have negative impacts on your exposure to compliance risk. And that’s a big challenge to overcome. What you need is a way get clear insight into what regulations require, and what environmentally-focused options are available.
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