How the path to a sustainable health system unlocks value

In this episode of the EY Health Sciences and Wellness Experience Podcast, Aloha McBride and her guests explore how organizations can reduce climate impact, increase efficiencies and unburden the system.

Key takeaways:

Lessons learned working toward making health systems more sustainable
Steps that health organizations can take now to lessen their impact on the environment
What role can data and analytics can play in helping health organizations advance their sustainability goals
Who to partner with to help your health organization to move toward sustainability
How to help change behavior to incentivize and encourage systems to be sustainable
What the risk of inaction can be, and why to act now

For your convenience, full text transcript of this podcast is also available.

Aloha McBride

Welcome, everyone. It is great to have you with us today. We are going to be exploring health care sustainability, and how we can unlock the value of sustainability and drive greater efficiencies in our health care entities around the globe. I am Aloha McBride, I lead Health for the EY organization across the world and I am very, very pleased to be joined by two wonderful panelists today.
The first is Gretchen Enninga. She is Senior Director of Sustainability with UnitedHealth Group (UHG). Second, we have one of our own partners with us today, Doctor Regina Vetters. She leads health care sustainability for us and has done some fantastic research. So, why don't we get started and the first question I'm going to ask is to Gretchen.
Gretchen, we know that so many health care organizations are really overwhelmed with how to start thinking about sustainability. It would be great if you could share with us how UHG began their journey and give us some insights into things that you've found most fascinating in that journey.

Gretchen Enninga

Thanks, Aloha. It can be really overwhelming for organizations that are at the beginning of thinking about how to make their organizations more sustainable. And for UnitedHealth Group, there are a few ways that we've used to narrow our focus and one is to listen to stakeholders, and the other is to look at our data. We've learned a lot by proactively seeking out perspectives from employees, care providers, members, customers and other stakeholders of the business. The more that we've talked to people, the more we've started to hear themes among the ideas and observations that they've shared. So, I think that's a really helpful step. The other step, from a data perspective, has meant evaluating sources of spend to find opportunities for better resource management, looking at waste streams to improve waste management and waste production.
If you're an organization that's really early in the journey, you might not have the data yet and that's a good place to start. So, that said, you don't need to wait until you have perfect and complete measurement to start doing the work to make your organizations more sustainable. For a long time, UHG measured its most significant and manageable sources of operational emissions for our administrative and pharmaceutical portfolio, and we set our emissions, reduction goals based on that. That’s an important note. We built a process for emissions measurements and incremental goal setting, and that gave us a foundation for us to take further steps on both fronts. And, over time, we also heard more from our stakeholders that this was a topic of increasing importance. Earlier this year was the first time that we released a comprehensive scope one and two inventory.
And that enabled us to commit to setting a net-zero science-based emissions reduction target through the science-based target initiative, so that we could establish that our actions were based on the current climate science. It was taking those steps to start to measure our data, and over time in parallel improving those metrics that set the foundation for us to set that science-based target. My advice is to listen to your stakeholders, tell that story of stakeholder value and that will help propel you to that next level of measurement and goals.

McBride

That's wonderful! Thank you so much, Gretchen. Super helpful for all of those listening out there in terms of critical first steps in getting started. Regina, over to you. We know that you've been looking at this topic for a number of years and have done some great research. You're seeing firsthand what's happening in Europe. What are your thoughts? What are systems doing to get started?

Dr. Regina Vetters

We see with many clients that new positions for sustainability leaders are being created, and then you have to watch out where they are being set, whether they are close to the CEO and this is a high priority for the company, or whether they are buried somewhere in procurement and they have to really fight to make the stance and encourage the topic. Then you see some companies just deep diving into the initial measures, which is great because they're getting some sort of security in getting this moving.
The better way is the way Gretchen just described, by quantifying your emissions, identifying your key levels and then move first toward what matters the most so that you can really prioritize the areas where you work. Then build trust in your organization by building a consistent, credible story and moving from good actions and good intentions to something where everyone understands, “Wow, here something is moving and people follow.” We see that especially employees in health care are really in favor of these measures. Many people working in health care are purpose-driven. And if they see things are changing for the better, they get engaged and wanna be part of that change.
In terms of examples, we see very different approaches. For instance, the British NHS, the National Health Service, committed to reach a net-zero target across the entire scope of emissions by 2045, and they've pushed that down through their entire procurement. Then we see countries where payers are being ranked from outside providers on their engagement of sustainability. Sometimes these rankings are still a bit early and the criteria for these rankings might be questionable. You can see that, for individual payers, it matters for their market performance and for their market ranking. Another example on the pharma side, pharmaceutical companies like AstraZeneca have pledged to become carbon-negative by 2030, setting their mark there and leading the way. One way they are doing this is by transitioning to next-generation inhalers with near-zero climate impact. If you push down these products, it helps others to have less emission in their actions.

McBride

Fantastic. That was super helpful. It's really interesting to see the different country approaches, I think, in Europe as well. With that as a background, I suppose if we get into some of the details. Gretchen, it would be great to hear more about some of the lessons you've learned as you've been really trying to jump-start this journey for UHG. We know UHG is a huge entity with lots of stakeholders, and the items that Regina mentioned around transparency and trust are really critical. It would appear to be something you all have embarked on as well in terms of really getting the stakeholders involved. A few lessons learned from you would be lovely.

Enninga

Thank you. There’s three lessons I'll highlight; and transparency, trust and stakeholder engagement are themes throughout those lessons. The first thing I've learned is that while sustainability is my job and my passion, there are a lot of stakeholders both inside and outside of our organization who are also passionate about sustainability. [insert slight pause] It’s often not their first priority and they may have a lot of other pressures they're focused on in their role. So, looking for multi-solving opportunities helps to take a sustainability effort and find ways that it adds value in other spheres. So, how is that investment impacting or improving health or resource efficiency, or some other value add? In fact, we often will call a sustainability initiative by another name because the value proposition for key stakeholders is not in fact sustainability-related.
That's the case for our paper reduction initiative, which we often describe as a health care modernization initiative. We’re working hard to reduce the amount of paper in the health care system as much as possible. It’s saving paper and therefore trees and other resources. And it's also true that paper-based experiences in health care are often more time-consuming and cumbersome, so creating digital solutions and alternatives to paper, these processes are an example of a multi-solving opportunity. That’s number one, to find the value that resonates with stakeholders, and it may not be around sustainability. Secondly, while it may seem that seeking buy-in and reaching a consensus around a sustainability project among decision-makers is the easy part. It's not. Well, sorry, it is the easy part when you consider the next step which is operationalizing that change and the change management around moving that forward. So, I just highlighted that people often have a lot of other pressures or priorities that they're focused on.
That impacts your ability to maintain that the project is successful, once you've gained buy-in. On top of that, there's not often structures in place to support sustainability, so while you're implementing a change, you're also building the structure to support sustainable change in the organization. At UHG, we are setting up an environmental, social and governance (ESG) steering committee that will help support and advise our sustainability efforts. We're also identifying champions and leveraging green teams, and using internal communication channels to help educate and engage stakeholders. So that's number two, just working to build that organizational structure to support change and management. The last lesson I'll share is that health care organizations are often really big ships to steer, so change can be slow, patience can be challenging though when you understand the urgency of climate action and the human health implications.
But, if you push too hard or too fast, you end up missing key levels of buy-in [VH1] or turning people off that might have been supporters, and ultimately you either don't get the initiative off the ground or it fails. The last lesson learned is just be patient, celebrate the little wins, and over time, in a series of sustainability projects, you'll find that you are able to increase the flow and the pace of change. And that's a result of building those connections and pathways and structures for sustainability in the organization.

McBride

Wonderful, great advice. Regina, I know you've been working on this topic and have published some great papers recently. I know in those papers you go through some of the kind of critical first steps and great actions, some of the health care entities have been taking in Europe. Maybe you could just share with us some of those — how to get started.

Vetters

Gretchen just wonderfully described that it's so many steps you have to take, sometimes overwhelming in the beginning. Obviously, it also differs from what part of the health care sector you're coming from. The payers have to do the typical thing most administrations have to do, switching to renewable energies, getting rid of all these paper-massive processes. Whether they are called modernizing or whether they are called sustainability, it's the very same topic for many payer clients in Europe as well. Look into employee travel guidelines on incentivizing either public traveling or home office opportunities. The bigger ones are incentivizing your patients with regard to prevention, because a big lever they have is to avoid hospitalization, to avoid medications being taken. You can go into the lifecycle assessments of different surgeries, for instance, knee replacement. And you can see with every step you avoid, you also save a lot of emissions and you can keep the environment a little cleaner.
Encouraging a healthier lifestyle is something that's big on the environmental side, although this has other benefits as well, which might be even more important for the patients. And then payers can also embed environmental criteria into the contracts with pharmaceutical companies, with hospitals, with GPs and encourage other players in the health care system to become more sustainable as well. And, if you look on the provider side, they are very concerned about energy consumption in the moment. So a midsize hospital has the energy consumption of a small town, has to be on 24/7 and every smaller step you can take there to lower heating in a specific area, to switching off the big devices that can benefit the hospital. You also have the big topic of changing priorities in procurement to not just use more renewable items or to bring procurement and waste management together. Because procurement obviously looks at the prices, waste management looks at the end of the process. If those two worked together, you can really make a change. I would like to give you one example on the [UNSURE OF WORD] hospital which are those narcotic gases.
We know that narcotic gases are very potent greenhouse gases and switching away from them is helping one-third of hospital emission you can target there. So you switch from this one to others, and that's not end of the chain. The next one is: if you exhale the gases as a patient while you are under anesthesia, those gases can be collected. They're typically collected in soda lime, which have to be disposed carefully. What you can do, and that's waste management, at the end of the process is to dismantle the components of these things and then you can actually use the soda lime as fertilizer. But you can see with just this one example, in the beginning and the end, you can take so many steps to make this more sustainable, and its just one thing in a big hospital.

McBride

Fantastic, super interesting, Regina. Well, in going through those lessons learned and tactics, it strikes me that there seems to be a very strong business case for sustainability, and getting that down on paper and getting the data and the analytics in place in order to really quantify the value that can be unlocked by these initiatives obviously will be something that our listeners are eager to learn more about as well. So Gretchen, I'm curious, I know you've embarked on this journey, you've started the process of really building the infrastructure, building the processes, gathering the data. How hard was it to really build that business case for UHG?

Enninga

Well, I think it's an ongoing journey. At the highest level, at the core of what we do, and Regina already talked about this a little bit, we have a desire to keep people well or get people well, and the better we care for patients, the lower the demand for health care, the lower the environmental impact of the
health care system. For payers, this translates well to this transition we're seeing from fee-for-service to value-base care arrangements, which moves away from the idea that more care equals better care. There’s the fundamental kind of business case and beyond that, there's a few ways we make the business case for sustainability and healthcare. This isn't kind of a one and done thing.
This is an ongoing dialogue and continuous part of the conversation as we embark on every project. Again, the more you have this conversation, the more it becomes part of the culture and the expectation. The first way that we talk about it is sort of fundamental as well, but a healthy planet, clean energy, water, air, that's the foundation of a healthy society. It’s a determinant of health, and we have a responsibility as stewards of human health to be stewards of planetary health. I think we all agree on that in theory, but when it comes down to how to finance sustainability projects, that's a business case that you can't easily calculate in our why for's . That brings me to number two, which is quantifying the stakeholder interest in sustainability. If you don't have a mechanism to understand stakeholder expectations today, sustainability's just one reason to establish that.
We are seeing in our organization and health care organizations broadly are starting to see a measured increase from shareholders, customers and employees that they're interested in working for organizations that are mitigating their environmental impact. So, get that data, tell the story and articulate how that is part of your business case. It impacts your ability to attract, retain and engage employees. It impacts your shareholder value, your ability to attract and retain customers as a payer. The third case is that sustainability initiatives are often drivers of cost savings, cutting waste and driving efficiency. If you don't have a tool, find a tool that can help your organization identify those projects that are sustainably minded, but also create cost savings and efficiencies. Then use that tool to forecast out what the financial and environmental impact of the project might be.

Vetters

I would add to that because the dynamics of digitization and sustainability are very much alike, because you asked, "Should we really do the process this way or is there a better way to change the process?" It’s a lot of changing the process from a technical side. One with less paper, maybe one with less emissions, and also changing the behavioral side, changing the understanding and changing the minds of the people who are working with these processes. We are halfway through the digitization, and it's easier to do them together and to get the strength out of both instead of doing one change process after the other, which is a bit tiresome for everyone involved. Getting the synergies out of these two is key to being successful. Smart hospital and a green hospital are very close together, and a smart payer and a green payer are also working with each other, hand in hand, if screen as well.

McBride

Fantastic. Thanks Regina. You're both bringing up digitization, so maybe we'll switch our focus to data and analytics and anything on the horizon we're seeing helping these health systems, helping the UHGs and helping the provider systems really advance their sustainability goals. It occurs to me that part of it being able to get the data, but using the data in the most efficient way to drive some insight into your current state of affairs of how well or maybe not well you are doing relative to emissions. Would either of you like to comment on that? Just the role of data and analytics in really helping to advance our goals here.

Enninga

There’s a few ways that data and analytics has helped UHG in its sustainability journey. One, I mentioned a little bit earlier is understanding where to focus. You probably have a good sense of where your most significant areas of impact might be. But in some cases, the data can help provide clarity and uncover areas that you can have an impact that you didn't necessarily think about before. We are in the process now of measuring our scope three emissions, and it's very clearly uncovered for us the two categories that we need to be focused on in our scope three, which is our finance emissions and our purchased goods and services. Those represent the lion's share for us. So, that's one way that data has helped us is just determining our focus. And the second way that we use data is to forecast out how specific actions can help improve our metrics.
This can be done with or without technology. We have a sustainability software that we've just implemented that helps and enables us to do that forecasting. But it can be done manually as well. Suggest looking at not only forecasting what the environmental impact is, but the improvement to cost structures and then forecasting what are the other kind of multi-solving opportunities that sustainability effort might offer. Two other ways using data and analytics a little bit more loosely, but we also look at the data of our health care peers. Health care as a sector is starting to make significant strides in this area. One of the things that we do is look at what other organizations are doing and their data. Those case studies and those peer insights help us to inform our work and also help us to influence stakeholders. So don't just use your own data. Look at the data that's also publicly available from other organizations. Lastly, you can use data to drive accountability.
Seeing metrics for emissions or waste at an enterprise level are not likely to have a lot of impact for business functional leaders. They need the data to mean something to them in the way they do their business. If you can parse your data out so that it's specific to functional areas, then it really relates to how that particular functional area operates and makes that relatable, and then they feel like they can be a contributor toward the solutions.

Vetters

To add to your middle point, the sustainability reporting is not really consistent around the world yet. Sometimes, it's even not consistent within comparable companies in the same country. We are very early stage here. And building up databases, being more comparable, setting the same KPIs, aligning on them, making yourself comparable, becoming more transparent also to the outside world — this is something that's only just starting and the front-runners are providing data, the others start to compare themselves, and we are at the beginning of a journey here. It also helps to increase consciousness of the footprint of health care in general, because sometimes it’s overlooked as an industry. People don't even think about health care when they think about emission and providing this data helps us all to make a point that it's really worth to invest in this in health care as well.

McBride

Great. You have both made the connected point of a healthier planet, a healthier population, healthier patients and greater economic opportunities for all. It strikes me that it does take a village to make some of this happen and I know many health care organizations are really looking at who their partners are, who is in their ecosystems to support some of these initiatives. Regina, you mentioned a bit around kind of country and country incentives, and I know you've been studying some of that within the EU and more broadly at a country level. I'm curious to get a perspective from you in terms of what do we see happening in the future in terms of incentives or where do we think we could see incentives coming into play, by the governments, by society at large? I know Gretchen mentioned this quite eloquently. It is a lever that people are using, I think, at the corporate level to entice and attract talent. Certainly, we see that even at our own company. Regina, really interested to hear your thoughts on any kind of government incentives that you hear in development at this point in time or that you would like to see in development around sustainability.

Vetters

Absolutely, since health care is such a regulated area, we need to have the governments involved. Starting with clear emission goals for health care and other industries as well, we have that in so many other industries, not consistently in health care. I mentioned the British system that's started, there are a few other European countries — Spain, The Netherlands, Belgium — that also have clear country targets already for their health care systems, but those are only a few. We would need to see funds in large scale for the large-scale transformations. For instance, regular hospital financing does not allow for such investments as changing the building infrastructure sometimes. Many hospitals are still in these old, historic buildings. If they want to green their buildings, they need studied help there. We would need stimulating help to foster green health innovation. If you change your product to make them greener, you always need two goals for the entire re-certification processes.
If, for instance, a pharma company decides to digitize the leaflet that comes with a tablet, they have to go through the entire certification process again. That doesn't stimulate green health innovation. It's a barrier to greenhouse innovation there. Then, we need a regulatory framework that, for instance, allows sustainable tenders. In the EU, the tenders can allow for environmental criteria such as water pollution during production. They don't really allow for supply chain criteria. So tablets that are being transported 10,000 kilometres is the same as tablets that are produced near. Obviously for free trade, that totally makes sense. If you look at the sustainability footprint for certain medication, it doesn't. Policy isn't fully developed here and hasn't set clear incentives for the health care system.

McBride

Great. That’s super interesting. And Gretchen, want to ask you another question. You're clearly deep in this topic and you work for a multinational organization that does really amazing things in health care, and you have been moving forward on this topic for a number of years. I would
love to hear from you the top three critical things our health systems can do to make the greatest impact in the next couple of years. So, quick wins, and I know you've highlighted some of them but would love to hear that at the end of our podcast here to get your sense for a little bit of a rally cry for
our listeners.

Enninga

Health care organizations need to take a multidimensional approach to minimizing our impact on climate change and environment more broadly. And the good news is the system is right for environmental mitigation. No matter where you turn, there's emission reduction opportunities. There are efficient uses of supplies or sustainable food systems. There's models of care and water usage efficiency. Lots of different ways in which we can work to make health care more sustainable. As I've spoken with health care leaders in my journey, I have found there's no two organizations that are the same or in the same place in their journey. There isn't really a one-size-fits-all set of actions. But I'll offer a few next steps that I think every organization can take, even if it’s revisiting these actions and they have taken steps in this area before.
Every health care organization faces pressures on cost structure. Start with the low-cost, no-cost sustainability projects like reviewing temperature lights and electronic management procedures. Often there's functions like heating and air conditioning, humidity, lighting and water for things like irrigation that are controlled by sensors. Through auditing those systems, you can uncover where those functions can be leveraged in more efficient ways. That’s one place to start with those low-cost, no-cost auditing. Another place to audit is your trash. We’ve done waste sorts in key facilities that helped us to understand two things. One is: Is your trash getting in the right bins? Landfill waste in trash bins, recycling in recycling bins and organic waste in composting bins. Secondly, waste sorts will offer opportunities to reduce certain types of waste. I mentioned we're focusing on reducing our paper use along with other waste streams. Look for those significant sources of single use or other resource inefficiencies. There are other projects like equipment upgrades, low-flow water fixtures and LEDs; that is an upfront capital expense. If you're using tools that will help you forecast the savings and the efficiencies that those create, you can articulate the value and the savings that that has to the organization.
The last point I'll make in terms of steps that organizations can take which isn't directly related to environmental mitigation, but is a really important step for health care systems to provide resiliency, is to conduct climate scenario planning. This helps to open the dialogue for organizations to a range of plausible future states, whether it's business as usual and how health care systems need to prepare for that, or the scenario of strong global mitigation and what that means for health care systems. Those are insights that can help health systems imagine and plan for how they adapt and address both the risks and the opportunities to their organizations.

McBride

Fantastic, those are perfect. Regina, we'd love to hear a few from you as well the contrasting of what happens if we do nothing, and what could happen in a positive sense if we embark on this?

Vetter

Yeah, I would like to bring in the system perspective. This week, the 2022 report of the Lancet Countdown on health and climate change was published, and they monitor the activity in this area for years now. On the dark side, they see a massive increase in heat-related death and the spread of infectious diseases. They have the economic loss associated with climate change which increases the pressure on many families. In every dimension, food security is affected by climate change. There are many areas of concerns. There's the whole need to strengthen the health care system underlined with this. But they also saw emerging glimmers of hope. The engagement with the health dimension of climate change comes right into the public discussion. People are more and more aware that climate change has massive effects on the health care system, and the health care system needs to prepare.
We see the public authorities are progressively identifying risks of climate change and are reacting to protect the populations, for instance, by dedicating churches and public libraries as cooling areas for vulnerable people during the summer. We see that more and more systems are setting targets or committing at least to low-carbon health systems. So there is movement on many sides of the health care system, and people are changing. They may be changing a little bit more slowly than in other areas. The consumer pressure is not as hard as on consumer products. But we certainly see that there is something moving forward and the progress is there.

McBride

Fantastic. Well, I would very much like to thank both of you for the amazing insights today. I think our listeners are ready and able to take action with these action plans that you both have laid out. Thank you very much. I'd like to also thank our listeners and we'll talk to you soon.

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Aloha McBride

EY Global Health Leader

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Episode 08

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32m 23s

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EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

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How the path to a sustainable health system unlocks value

Key takeaways:

Aloha McBride

Gretchen Enninga

McBride

Dr. Regina Vetters

McBride

Enninga

McBride

Vetters

McBride

Enninga

Vetters

McBride

Enninga

Vetters

McBride

Vetters

McBride

Enninga

McBride

Vetter

McBride

Presenters

Aloha McBride

In this series

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