How to Monetize Sustainability in Healthcare
The key to embedding sustainability in the healthcare industry is monetizing its value, according to executives at a Dec. 4 conference titled Metrics That Matter, Messages That Motivate: Making the Right Case for Sustainability in Healthcare.
The Wharton School, through its Initiative for Global Environmental Leadership, partnered with Johnson & Johnson to convene healthcare professionals and share best practices for measuring the value of sustainability initiatives. At the event, panelists and attendees identified several opportunities for the sector:
- Healthcare organizations should seek to establish a standard methodology for reflecting the value of sustainability in their investment decisions or risk losing cost savings and revenue gains by ignoring an initiative’s positive potential.
- Sustainability communications can optimize returns and reduce risk. Though many healthcare organizations have begun to tell their sustainability story, a gap still exists, and, in the absence of information, some stakeholders, such as socially responsible investment firms, may assume the worst. Healthcare providers and payers at every level have the opportunity to differentiate themselves by transparently communicating their sustainability initiatives.
- The majority of healthcare’s costs are upstream. Healthcare organizations should consider interventions across the value chain and collaborate with their procurement team and suppliers to achieve the greatest impact.
According to poll conducted earlier this year by Practice Green Health and Johnson & Johnson, 37 percent of hospital administrators cite reducing overall operational costs as their top sustainability priority and name reducing energy usage, purchasing environmentally-preferred products and supplies, and decreasing waste as other key strategies.
The poll mirrors the findings of a 2012 Johnson & Johnson study that found more than half (54 percent) of hospitals cited green attributes as very important in their purchasing decisions; and that 40 percent expect their future request for proposals to include sustainability criteria for the products they purchase.
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