THE OUTLOOK FOR HEALTH CARE IN 2023:

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April 29, 2022

How HHS wants health care to fight climate change

Daily Briefing

    The Biden administration last week issued a "call to action" for members of the U.S. health care industry to take part in a new climate initiative aimed at reducing greenhouse gas emissions in the health care sector.

    Infographic: 3 ways your climate change inaction will hurt your bottom line

    HHS launches initiative to reduce emissions in the health care sector

    HHS established The Office of Climate Change and Health Equity in September 2021. And last week, HHS, in partnership with the White House, invited members of the U.S. health care industry to match or surpass the measures federal health systems are already taking to reduce their emissions and prevent further environmental harm. The initiative also challenges private health systems to factor climate considerations into the future of health care.

    Specifically, the voluntary pledge asks stakeholders in the health care industry to, at a minimum:

    1. Reduce their organization's emissions by 50% by 2030 and to net zero by 2050, while publicly reporting their progress
    2. Take inventory of their organization's Scope 3 (supply chain) emissions
    3. Designate an executive to lead the creation of climate resilience plans for their facilities and communities  

    "We need all players on the field confronting the climate crisis; sitting on the sidelines is not an option." said HHS Secretary Xavier Becerra. "Every stakeholder group in America must step up, and collaboration across the public and private sector is key. At HHS, we stand ready to partner with as many players as possible. Reducing emissions and fighting climate change's catastrophic and chronic impact on vulnerable people is key to building a healthier nation."

    "The health care sector contributes 8.5% of total U.S. emissions, so they have a big role to play," said National Climate Advisor Gina McCarthy. "We are excited for health care leaders across the country willing to step up, reduce emissions, and help us reach the President's bold climate goals."

    Commentary

    Although rising temperatures have a widespread impact on public health, governments have not historically labeled rising temperatures as a public health issue. And while climate change is an issue HHS does not actually regulate, Rachel Levine, assistant secretary for health, who oversees the climate change office, said it can use the "bully pulpit" to push businesses toward greener practices.

    Notably, city and state public health officials in the Pacific Northwest claimed it will take hundreds of billions of dollars to mitigate the climate-related health problems. "Climate change is the single greatest health threat to humanity," said Jeffrey Duchin, a health officer for Seattle and King County. "And I've been preoccupied with Covid over the last two years."

    Currently, there is no dedicated funding for President Joe Biden's climate office inside HHS—despite the administration's request for $3 million to staff a team of eight people.

    Ultimately, Levine hopes to garner more funding in the coming years. "I believe that some have a sense of urgency about climate change, and of course, others don't," Levine said. 

    "We are encouraged by the bold and specific commitments to decarbonization that many organizations across the country have already made," Levine added. "It is time for us to both celebrate those commitments and galvanize others to take this critical step." (HHS press release, 4/22; Bloomberg Law, 4/22; Owermohle, Politico, 4/18)

     

    Advisory Board's Take

    Reduce your emissions now—before you're forced to

    By Miles Cottier, senior analyst, Advisory Board International

    Health and Human Services' (HHS) pledge is the latest move from governments or regulators around the world that points to increased reporting of emissions and environmental footprints.

    The pledge is voluntary, which means it's probably tempting for most organizations to do nothing. But in conversations I've had with cross-industry stakeholders all over the world, the growing notion is that governments will mandate emissions reporting from all enterprises before long. And if organizations wait until reporting is mandatory, it will make the path to reducing their emissions much harder.

    Another thing I find particularly interesting about this "call to action" is that it isn't just health systems that are on the hook: suppliers and pharmaceutical companies are included, which deviates from the line the health system has often walked thus far. And it's a potentially powerful notion given that around 80% of the sector's emissions come from the supply chain.

    The point is, HHS is saying here that the entire industry needs to take ownership of its contribution to climate change and do something about it. And that starts with reporting.

    In fact, if we look at the UK's National Health Service (NHS)—often considered the world's leading health system when it comes to climate change and environmental sustainability—organizations already publicly report their emissions data because they have to. That was the first step. Now, all NHS organizations are mandated to publish their "green plans" for reaching net zero by the end of the year. What's more, new legislation will require all NHS buildings to adapt to climate impacts, protecting biodiversity within hospital estates, decarbonizing energy sources, and impacting the wider supply chain.

    Climate reporting mandates will happen. And they will spur on significant industry-wide disruption that, if organizations are not ready for it, will challenge every aspect of their existence.

    The NHS is far ahead of the United States health system in climate change mitigation, but HHS' latest move suggests it could be going down a similar path in the future. But for now, US health care organizations should sign up to the pledge because at the very least, it is good for their business.

    Four major repercussions that increased reporting of emissions will cause

    There are four major repercussions that increased reporting of emissions will cause, all of which will affect the reputation and financial viability of health care organizations.

    1. Regulators will propose financial incentives to low-emitting organizations and leverage financial penalties on those that are high-emitting. This, added to the increasing cost of running an unsustainable business, will make it much more expensive to operate a health care enterprise.

    2. Staff will leave to work for a more active employer with a better record of action against climate change. Increased reporting means increased employee awareness of an employer's poor emissions record. When given the choice between similar employers, potential recruits—especially millennials and Gen Z— will favor employers with a better climate change record.

    3. Patients will opt for providers who take a stand against climate change. Patient loyalty is already waning and the negative impacts of a poor emissions record on consumer behavior will be increasingly felt when millennials and Gen Z become the dominant health care-using generations.

    4. Socially conscious organizations will choose partners with a better climate change record. More progressive, socially active anchor organizations selectively partner with organizations that contribute to the health and wellbeing of the local population. High-emitting health care entities will struggle to build relationships with these organizations.

    Essentially, disruptive change will happen to US health systems whether they like it or not. And the earlier they sign up to the pledge, the better off they (and the world) will be.

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