Need for Increased Accountability in Healthcare

Written by: Isilay Civan MSc, PhDs, LEED AP O+M, as published in the Network, June 2014, vol 22, issue 2

In the past, healthcare providers have solely been incentivized by caring for the sick. However, with the Patient Protection and Affordable Care Act (PPACA), the focus on episodic healthcare delivery is changing to a more comprehensive approach of managing the health of populations. Care providers will now be expected to assume responsibility for treatment over a longer period of time – one that does not end with a patient being discharged. There may be cuts in reimbursements, possibly penalties for dissatisfied patients, medical errors, hospital-acquired infections or hospital readmissions following treatment. This increased accountability, coupled with a potential decline in reimbursements and the overall operational budgets, will make the concept of sustainability even more important.

The PPACA seeks to achieve improved quality and reduced costs in Medicare. As explained in a Medical Construction & Design article by Benjamin Davenny[1], previously, at each discharge, Medicare was paying the hospital an operating base payment along with other payments. Under the PPACA’s value-based purchasing (VBP) program, the government will now hold a small percentage of all operating base payments, which will be distributed to hospitals depending on how they perform on quality measures. Value-based purchasing is budget neutral; therefore, the incentive money paid to hospitals will be equal to the amount withheld, and it will be based on how well hospitals perform relative to each other.

In FY 2013, the VBP performance scores were based 70% on clinical process measures and 30% on patient experiences. The patient experience score was/is based on the (standardized and mandatory) Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) Survey. Up to 80 points on the patient experience score can be achieved from HCAHPS scores and up to 20 points can be achieved by a consistence score. HCAHPS results contribute to the performance scores and are posted online at www.hospitalcompare.hhs.gov, as required by the Deficit Reduction Act of 2005.

Sustainability and the Hospital Experience

The HCAHPS Survey consists of 32 questions, 7 of which are demographic and 4 are for screening purposes. The remaining 21 questions address the patient’s hospital experience, with two HCAHPS questions directly dealing with the healthcare environment in terms of cleanliness and quietness.

Every challenge can be turned into a unique opportunity. Through a renewed focus on sustainable practices, lower scores may be improved, giving hospitals a chance to rank higher. Because the money they receive will be tied to their score on measurements like HCAHPS survey, the greater their score improvement, the larger share they may get from the overall pie.

There is also a greater need to do more with less. With operating budgets declining and focus on the built environment increasing, metrics and ways for measuring cost-cutting will be more important than ever. According to the 2013 survey[2] of Health Facilities Management Magazine subscribers, only 38% include performance metrics (such as the Environmental Protection Agency (EPA) Energy Star rating, total waste generation or a recycling rate) in their senior management dashboards. And only 45% of responding hospitals conducted energy audits in 2013 — a drop of nearly 5% from 2010. Considering that we cannot manage what we do not measure, hospitals will need to change their ways — soon.

 

Free Help

To that end, three American Hospital Association groups (American Society for Healthcare Engineering, Association for the Healthcare Environment, and the Association for Healthcare Resource & Materials Management) collaborated on a website called the Sustainability Roadmap for Hospitals (www.sustainabilityroadmap.org). It offers free tools and resources showing hospitals how to implement real-world sustainability projects, enhance existing efforts, and share their environmental successes with other facilities. The content includes general information and specific measures for improving a facility's performance, organized under five tabs: Topics, Drivers, Strategies, Implementation, and Resources.

One of the reports referenced on the site (from the Commonwealth Fund[3]) suggests that hospitals can save more than $15 billion in 10 years by implementing such sustainability programs. Hospitals consume 2.5 times more energy per square foot than other commercial buildings, spending more than $8.5 billion dollars annually on energy. As a result, the prospect of saving money on energy costs and reducing reliance on fossil fuels is a huge driver for undertaking sustainability initiatives. Several other opportunities for reducing operational costs cited in the article:

·        Reducing waste costs: The cost of waste disposal, especially disposal of expensive regulated waste, is a common financial driver. Materials consumption in health care facilities results in $10 billion annually in waste disposal costs. Opportunities for cost reduction through smart source reduction and waste management may be as high 40 to 70 % $4 to $7 billion annually.

·        Reducing water costs: Hospitals are water-intensive. Today, water is relatively inexpensive in the United States compared to other parts of the world. (For example, in 2010 in Spokane, water cost $0.25/100 gallons, in El Paso $0.60, and in San Diego $1.38, compared to $2.86/100 gallons in Glasgow, Scotland.) Water prices are predicted to rise around the world and across the United States. As large water users, hospitals have an opportunity to reduce water use and improve water quality.

·        Reducing supply chain costs: Supply chain costs are rising (along with waste, water, and energy costs). Assessing opportunities to maximize material, supply, and equipment use can drive down costs and have a positive environmental impact.

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[1] “Silence is Golden”, Medical Construction & Design, July/August 2013, pgs. 44-47.

[2] “Shades of Green”, Health Facilities Management Magazine, December 2013, pgs. 33-38.

[3] “Can Sustainable Hospitals Help Bend the Cost Curve?”, The Commonwealth Fund, November 2012.

"Same Angle, Different Lenses" Sustainability Series

TAKING THE PEOPLE'S SIDE

 

Written by: Isilay Civan MSc, PhDs, LEED AP O+M, as published in the Network

 

While considering Sustainability, we often forget the most important component – the people. Even though everything we do is supposedly intended to improve human experience in the built environment, the things we tend to focus on, track, benchmark, and manage are only subsets of such impacts (i.e. tracking indoor air quality or managing noise or illuminance levels to ultimately improve human health and employee productivity) .

Anything directly related to the people side, which attempts to quantify and introduce metrics into the financial analysis, is presumed to take away from the validity of the calculations by softening the reliability of the payback analysis. Earlier attempts of specifically quantifying the people side led mostly to unsubstantiated claims, labeled ‘green-washing’, and discouraged the sector from determining better ways of understanding and measuring the true implications. This also led to focusing solely on the secondary aspects that have less complex relations that are easier to calculate and validate. However, recognizing the progress we have made to date in the field of Sustainability, it is time to go back to the drawing board and figure out more reliable metrics that effectively measure the people side.

To underscore the need and importance of such an exercise, the following list of facts, consolidated from notable sources such as World Green Building Council (WGBC)[1], The Commission for Architecture and the Built Environment (CABE)[2], and Terrapin[3], speaks directly to the people side and its potential impact on an organization’s triple bottom line:

·       Employee salaries are the largest expense for any organization (often as high as 60-80% of the total cost of operations and typically 10 to 12 times more than maintaining the building’s infrastructure);

·       Productivity costs (as also shown in the pie chart, the cost per square foot of a given corporate office space being overwhelmingly devoted to salary; 90.3% of productive and unproductive salaries and benefits, while only 8.9% is paid toward rent and mortgage, and 0.8% represents energy costs - BOMA, 2010, US Department of Labor, 2010) can be 112 times greater than energy costs in the workplace;

·       More than 90% of a company’s operating costs are linked to human resources, and financial losses due to absenteeism and presenteeism, a loss of workplace productivity resulting from loss of focus, negative mood, and poor health, account for 4%;

·       A 2% to 5% increase in staff performance can cover the total cost of providing for the organization’s staff accommodation;

·       Current metrics for calculating productivity, engagement, and innovation are typically not fully representative of today’s knowledge-based workforce;

·       Employee productivity in the knowledge economy is less a matter of improving speed and accuracy of routine tasks and more a function of generating new ideas, being creative, working effectively in teams, and generating knowledge that adds value to the organization;

·       The more complex the function, the harder it is to quantify its impact to the overall employee productivity;

·       According to self-reported productivity data, for each 15% increase in workspace satisfaction, there is a 1%-4% increase in productivity;

·       There is a strong relationship between perceived comfort and self-reported productivity, with differences in productivity as high as 25% reported between comfortable and uncomfortable staff;

·       For every 10% reduction in reported Sick Building Syndrome (SBS) symptoms, there is likely to be a 1.1% increase in productivity;

·       Daylighting design has been linked to a 15% reduction in absenteeism in office environments. Increases in productivity of between 2.8% and 20% attributed to increased luminance levels have been found in other studies;

·       In 2010, the US Department of Labor reported an annual absenteeism rate of 3% per employee—or 62.4 hours per year per employee lost—in the private sector. The number is even more dramatic in the public sector - 4%—or over 83 hours lost to absences per year;

·       Loewen and Suedfeld (1992) report improvements of 38% in the performance of simple tasks and 27% for complex tasks when working in an environment with white noise, as compared to tasks in unmasked noise conditions;

·       The potential impact of design for buildings on overall productivity as +12.5% (improved performance) and -17% (hampered performance) for an overall 30 percent change in worker performance in the best and worst buildings.

While there is a growing body of empirical evidence linking building design attributes to productivity, health, and well being, there has not been a consistent method to link the results to financial metrics. Consequently, the industry remains skeptical and continues to under-invest on the people side, causing us to miss out on what can potentially lead to the greatest return on investments.

Similar arguments are being made while discussing the benefits of biophilic design. The term biophilia, stemming from the Greek roots meaning love of life and coined by the social psychologist Erich Fromm, is used to describe the renewed design focus on bringing humans back in contact with nature, and by so doing, achieving much greater productivity goals. To establish evidence of these benefits, we need improved metrics that can better measure the relationship between the physical environment and the employee productivity. We need to find more direct linkages to accurately measure innovation, creativity, and productivity of knowledge workers, and rely less upon the traditional indirect measures (e.g., illness, absenteeism, staff retention, job performance – only as it relates to mental stress/fatigue, healing rates, classroom learning rates, retail sales, violence) that typically have many more variables playing into the overall success/failure of the findings. The failure to act now would do a great injustice to the true value of Sustainability and the ability to realize all that a holistic approach could offer when regarded as a core business target and measured accordingly.

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[1] The Business Case for Green Building: A review of the Costs and Benefits for Developers, Investors and Occupants, WGBC, 2013

[2] The Impact of Office Design on Business Performance, CABE, 2011

[3] The Economics of Biophilia, Terrapin Bright Green LLC, 2012