how much will an energy upgrade for my healthcare facility ... · how much will an energy upgrade...

How Much Will an Energy Upgrade for My Healthcare Facility Cost? (and how much will I save when it’s done?)

Straight Talk on Energy Series

A practical guide for healthcare facility operators for navigating the energy upgrade landscape

How Much Will an Energy Upgrade for My Healthcare Facility Cost? (and how much will I save when it’s done?)

Onsite Utility Service's comprehensive energy

efficiency upgrade guide for your healthcare facility - including requirements, goals, project

variables, expectations, and a whole lot more.

Over the last decade, healthcare facilities around the world have faced increasing financial challenges as

margins and profitability have decreased. Both private and public healthcare system administrators are

challenged with similar budgetary constraints: The recent and ongoing increases in energy costs have led to

losses for many for-profit hospitals and has squeezed margins in others.

Add to that the staggering statistic that by the year 2050, the world population aged over 60 years will

nearly triple from 700 million to 2 billion1 leading to an increase in the number of potential patients

healthcare providers and their facilities will need to serve.

So how will healthcare facilities handle this increasing financial pressure?

Executive Summary

1 World Population Aging, 2009. United Nations, Department of Economic and Social Affairs. New York. 2009.

They must find a way to do more with less. Energy efficiency projects can unlock trapped capital that can improve a

healthcare facility’s profit margin or be used to fund technological advancements, purchase medical equipment, or

improve the patient experience.

This white paper will discuss how healthcare facilities can gain energy efficiencies and translate these savings into significantly

improved financial performance. To begin, we will look at trends in healthcare energy usage as well as recent and predicted

changes in energy costs. Next, we will compare traditional cost- saving measures to energy efficiency projects, and illustrate

how improving energy efficiency can lead to healthy financial performance and improved patient safety.

In conclusion, we will look at a creative solution which helps healthcare facilities achieve these targeted energy efficiency

objectives without requiring any capital expenditure or debt incursion by the healthcare facility itself.

4

Finding the available financial resources

from your already strained budget has

kept you from pursuing an energy

efficiency upgrade. But if there is a

sensible way to get an upgrade that fits

within your budget, you would like to

hear about it.

“We don’t have the budget for an energy upgrade.”

Is This Guide for You?

© 2018 OUS Capital www.ouscapital.com

5

Competition has been getting more

aggressive, so you have to find as many

ways as possible to maximize profits.

You have noticed one of the biggest

drains on those profits is your huge utility

spend, so you want to look closer at how

to quickly plug that leak.

“Energy costs are crushing our bottom line and profits.”



6

You’ve looked into energy efficiency

upgrades, yet no one has provided clear

guidance of how to make it all work. You

would like to find someone who can properly

guide you through the entire process, and

advocate for what's best for your situation.

“We’re not sure where to get started.”



7

The primary motivating factor for an

energy efficiency upgrade is to not just

reduce costs, but also to improve

profits. How you choose a solution will

be heavily determined by the level and

speed in which you can see a return on

your upgrade investment.

“A strong and swift ROI is what matters most.”



Your resources are allocated to other

projects and initiatives, so coming up with a

sizable out-of-pocket investment to launch

an energy project simply doesn't make sense

right now. Yet you are still curious to see

what options exist to finally get an energy-

efficiency upgrade project underway.

“We would like to minimize any up-front or out-of-pocket costs.”



8

9

There are so many energy efficiency

'experts', and they all sound the same, so

it's been hard for you to identify who can

really help you accomplish your energy

goals. You haven't given up, just cautious

about making the right choices so you

head in the right direction.

“We just don’t know what to believe anymore.”



10

The world of energy efficiency is rapidly evolving, and it's easy to get overwhelmed in all the available options.

Use this guide as a roadmap to help you navigate this every-changing terrain.

What’s really going on with energy

efficiency for healthcare facilities?

The State of Energy For Healthcare Facilities Section 01


12

Due to population increases and a struggling world economy, energy costs have increased by approximately 20 percent since 1995 and are expected to continue to increase, by as much as 25 percent over the next five years.2

Energy costs for healthcare facilities are going in one direction: UP

The State of Healthcare Facility Energy Efficiency


Energy use in the healthcare market has increased 36 percent since 1995, due to changes in technology and data center requirements, as well as an increase in patient volume.

Global warming and the international drive to reduce CO2 emissions have caused hospital

executive staff and facility managers to focus new efforts on reducing hospital energy usage.

For the healthcare market, energy efficiency projects are always linked to improving financial performance, either through increased profitability or easing budgetary constraints.

However, as the second-highest energy-intensive industry, healthcare also has a significant opportunity to positively impact the environment through sustainable actions and goals, as well as

meet new and future energy legislation.

2 Department of Energy, US Energy Information Administration (EIA) Commercial Buildings Energy Consumption Survey

13

Despite the increase in energy costs, energy efficiency initiatives have historically been overlooked as an option to reduce costs. Healthcare facility administrators and CFOs have typically focused on implementing new technologies, reducing staff numbers, and improving processes to reduce costs. And therein lies the disconnect.

Traditional cost-cutting has not worked, and will not work



Increased energy costs are consuming profits that could be reinvested to aid a hospital’s growth and support patient-centric projects. By investing in energy efficiency projects now, healthcare facilities can reduce ongoing operating costs and reinvest their savings to purchase new equipment and technologies.

Hospital campuses could be expanded with a new wing or outpatient centre. New community care initiatives, such as specialty clinics for diabetes care or geriatric medicine, could be launched to address the aging population’s medical needs.

Why is energy efficiency being overlooked as a solution? Because energy costs typically represent only 2–5 percent of a healthcare facility’s total operating budget, management remains focused on traditional cost-cutting measures - and hence why energy spend continues to be a financial drain on their profits.

14

In contrast to other cost-cutting approaches, energy efficiency can be achieved through professional services and equipment rather than process changes that affect the behavior of hospital staff or the level of patient care.

Perhaps the most important benefit of an energy management solution is that energy efficiency is directly measurable.

The overlooked alternative: Improve energy efficiency



In order to monitor and improve energy efficiency, CFOs and facility managers need insight into real-time energy usage in their healthcare facility. An automated building management system can gather, centralize, and analyze energy usage and history throughout the facility and displays that information in what is often called an ‘energy dashboard’, where building information and energy usage can be quickly viewed and filtered by such things as building section, utility, time, day, or any other number of variables.

As a result, this real-time information enables facility managers to quickly alter usage and achieve results with low risk to patient care, staff productivity, and customer service.

A 30% savings in energy costs has the potential to improve profitability by up to 1 percent. That can translate to a savings of nearly $1 million in 30 patient days for a typical 235-bed facility with a 60 percent maintained bed occupancy, thus proving the case that reducing energy costs can have a significant and positive impact on healthcare facility financial performance.

Before we start discussing all the

great things an energy-efficiency

project can do for your facility, let’s

first determine whether or not it’s the

best option for your situation.

Is an energy efficiency upgrade the right option for your healthcare facility?

Section 02


16

No one was lying. It seems however

that far too many 'energy experts'

have inflated expectations.

Is An Upgrade Right For Your Healthcare Facility?


Let's start with a fundamental truth:

Most of what you have been told about

energy efficiency has been pure hype.

There is little doubt you have

experienced your own encounters

with these 'experts', who promise

you incredible results from an

energy efficiency upgrade project

that sound too good to be true

(and sadly usually are).

Here is the bottom line: Energy

efficiency is not a fad. It’s serious,

it's important - and it's here to stay.

17


What causes so much confusion among even the most

savvy of healthcare facility operators is the lack of

clear direction on how to properly and effectively

accomplish an 'upgrade' to achieve energy efficiency.

Where do you begin? What steps do you take?

How does it all work?

After more than 25 years in the energy industry,

we know the answers. So let's determine if an energy

efficiency upgrade is the right choice for your situation.

Then we can determine the best path to get you there.


18


1 ReasonReason 2

Top Reasons Healthcare Facilities Go Energy-Efficient

Let's not ignore the obvious: Energy-efficiency

means reducing your energy consumption,

which means lowering your energy spend.

And that means more money on your balance

sheet.

In addition to cutting linear energy costs,

energy-efficient equipment such as LED lighting

has a longer usage life expectancy than

florescent or filament lighting. So you don't

simply see savings on your utility bill, you also see

your maintenance and replacement costs

dramatically reduced as well.

Save Money

If you are motivated by social responsibility, an

energy-efficient facility is a big step in the right

direction.

Attractively day-lit and well-ventilated hospitals

with a low-carbon footprint additionally may

attract skilled doctors and nurses seeking a more

comfortable and productive workplace.

Moreover, we live in an era of patient

empowerment, one in which they can choose

where and by whom they'll be treated. In this

era, "green" hospitals may become one

deciding factor alongside traditional factors,

such as the reputation and track record of the

physician doing the procedure.

Environmental Consciousness


19


Well-planned and executed upgrades can create

significantly more value than the energy cost savings.

Analogous to the simple maintenance activities you

can do with your car, the efforts of an energy

efficiency upgrade not only make expensive

equipment run more efficiently, but also increases

the equipment's life.

Having your facility equipped with energy-efficient

equipment adds real value to the worth and value of

your property as a whole.

It's not a matter of 'if' but rather 'when' your existing

lighting, HVAC, laundry, water, and the rest of your

energy infrastructure will require maintenance, repair

or simply need to be replaced due to normal wear

and use.

Energy-efficient equipment lasts longer. Much

longer.

And it puts your healthcare facility in a position to

maximize growth options without letting your energy

infrastructure hold you back due to the inability to

maintain capacity.

3 ReasonReason

Add Value

4

Future-Proofs Your Facility


Top Reasons Healthcare Facilities Go Energy-Efficient

20

When you're ready to start an energy-efficiency upgrade project, things can get a

little scary. There are multiple performance and delivery metrics that are important

for you to be conscious of when choosing new equipment.

Here are some common specs to consider and why they are so important when

planning an energy-efficiency upgrade.

What specifications are important?

Section 03


21

By far the most apparent element of your

facility that requires an energy-efficiency

upgrade is going to be your lighting.

And there is no way of sugar-coating this

fact: If you are not using LEDs throughout

your facility, you are paying way too much

for electricity.

Lighting

What Specs are Important?


LED bulbs last 10 to 50 times longer than traditional incandescent bulbs

Lasts Longer

LED Lighting:

LED bulbs do not contain mercury, which can be harmful to the environment

Safer

When compared to other types of bulbs, LED’s emit as much as 90% less heat.

Less Heat

22

Here are some excellent questions to consider

when looking at your existing lighting - and to

help you properly identify a possible solution.

Great Lighting Questions



What would a 10% reduction in electricity spend mean for your bottom line? 20%? 30%?

?

Does your current lighting give you enough quality light for the tasks at hand?

?

How are you managing light use in common-use areas - do they only get turned on when needed or are they ‘always on’?

?

How much have you spent on light bulbs over the past 5 years? ?

How much heat are your current lights producing? ?

When was the last time you did a Lighting Study? ?

How often are you changing out light bulbs? ?

Are you a candidate for daylight harvesting??

23

Upgrades that improve the air quality of the

facility or introduce daylight into patient

rooms, for example, can deliver even

greater values in both cost and quality of

care.

The Lawrence Berkeley National Laboratory

documented that air quality improvements

can reduce the transmission of airborne

illnesses within hospitals.

HVAC



Also, energy efficient solutions like variable

frequency drive (VFDs) are available to

adjust the speed of the motors to the actual

needs of your facility and can help reduce

the electricity consumption of your HVAC

applications.

Something as simple as adjusting the speed

of your motors with a good regulator could

save you up to 70% on electricity compared

to your current on-off system.

The motors of the ventilators, compressors

and pumps involved in your HVAC

applications are responsible for a large share

of your electricity consumption, because

they generally work at full load all the time.

24

Here’s a quick review of how to look closer at

your own HVAC infrastructure - is it leaving you

out in the cold?

Great HVAC Questions



What kind of ventilation system is currently is use??

How old is your HVAC system, including thermostats??

What are your current settings for an unoccupied patient room??

How are you managing zone separation??

Are you using variable speed drives??

What is your building’s system for air purification??

How much did you spend last year on HVAC maintenance?

?

When was your last HVAC system audit??

25

Healthcare facilities use massive amounts of

water in nearly every single area of

operation, and it is typically a big

financial drain.

Obvious solutions to curbing water usage

include the usual suspects, such as using

more-efficient sinks, toilets, laundry,

landscaping, and medial equipment.

But that’s just the beginning.

Water



Operational costs and environmental

impacts are influenced by water use.

Industry estimates suggest that implementing

water-efficient practices in institutional

facilities can decrease operating costs by

approximately 11 percent, and energy and

water use by 10 and 15 percent,

respectively.1

Healthcare facility managers can benefit

from employing water-efficient practices

through operational improvements and

upgraded equipment. For example, high-

performing equipment and fixtures are now

available that use at least 20 percent less

water than standard models.

1 2010 American Water Works Association Research Foundation

26

Now let’s dive into your healthcare facility’s

water strategy and see if you’re leaking profits.

Great Water Questions



What is your current hot water temperature setting??

Are you using ‘gray water’ for landscaping irrigation??

How much water is used per-flush by patient room toilets??

When was the last time you checked for leaks in the pipes??

What happens when a patient leaves a faucet running??

How many public water fountains do you have??

Could patient-room faucets be more efficient? Have you checked?

?

When was your last water-efficiency audit??

27

The variability in the medical imaging

equipment load profiles and the night-time

power consumption of some medical office

building plug loads suggest an opportunity

to improve “idle” mode energy efficiency

and built-in controls for transitions between

operational modes.

Medical Equipment



For example, when medical devices remain

at full power in a medical office building

during non-business hours, such devices

should be assessed more carefully to

determine which ones can be powered

down.

Another approach is to design controls that

can reduce idle power while ensuring fast

response and emergency readiness.

Energy-efficient devices and practices have

the potential to generate considerable

savings for healthcare facilities. They also

yield environment benefits by reducing air

pollution emissions generated by fossil fuel

electricity production.

28

Let’s do a quick check-up of your current

medical equipment situation.

Great Equipment Questions



Is your lost/misplaced medical equipment percentage higher or lower than the national average?

?

How often are devices shut off vs. left powered and idle? ?

What is the process when your staff is finished with a powered device/equipment?

?

Does all your office equipment go into ‘standby’ mode when not in use?

?

Do you have multiple devices performing similar tasks??

How much exhaust does your patient-room equipment emit daily?

?

How often are you repairing or replacing equipment??

When was your last equipment efficiency audit??

Budget constraints are, by far, the biggest obstacle stopping most healthcare facility

operators from starting any kind of energy upgrade project.

With tighter and tighter margins, it becomes increasingly difficult to find any room in the

budget for just about anything new, let alone an energy upgrade.

So how do you make this work? Here’s an innovative approach to upgrade your entire

healthcare facility, regardless of your budget (and without selling your soul in the process).

How do you fit an energy efficiency project into your budget? Section 04


30

You’ve figured out that upgrading to

energy-efficient equipment is the smart path

to reducing energy costs and saving a lot of

money.

So why haven’t you gotten started yet?

The obstacle likely keeping you from seeing

your energy costs drop and your profit

margins rise is the cost to actually do the

upgrade … it’s just not in your budget.

Budget Busters


Don’t feel bad - it’s a very common

situation. And the only path every ‘expert’

has offered you looks something like this:

Put up a big chunk of cash out-of-pocket

to get the project started

Make scheduled payments during the

project at specific ‘milestones’

If you don’t have the cash handy, get

financing for the project (and saddle your

balance sheet with a huge debt)

Hope and pray the ROI will be swift

enough to justify the whole thing

This craziness puts you on the never-ending

Energy Upgrade Treadmill where you can

languish for months - or even years.

How To Upgrade Regardless of Your Budget

31 How To Upgrade Regardless of Your Budget


You know you need to upgrade (or at the

very least you have figured out energy

efficiency is worth exploring further) to get

your energy costs to drop.

1 2

34

1Upgrade = Savings

If you finance the project, you are saddled with debt for

years. So the idea gets shelved until next year, at which

point you plan on presenting ‘energy efficiency’ at the

budget meeting (again) in the hopes that finally you’ll

get the cost worked into the budget.

4Choosing from Bad Options

You now have to find the finances within

your budget to pay for the costs

associated with the upgrade (including

equipment, labor, installation, and more).

2Upgrade Costs Money

There simply is not enough resources

within your budget for the upgrade. So

now your only real option is to get

financing to pursue the upgrade.

3Not In the Budget

The Energy Upgrade Treadmill

32

The answer to this dilemma is simple:

Energy Savings as a Service


33

3 4

Your entire healthcare facility is given a complete energy

efficiency upgrade - lighting, HVAC, water -

the works

1 2



How Energy Savings as a Service Works

You pay nothing up front for the project - OUS

Capital fronts the entire cost, for the equipment

and installation. It’s not a loan, it’s not a lease, and

it’s not ‘financing’

All costs for the project are then deducted from

the savings you get post-upgrade, with the rest

going into your pocket as bottom-line savings

Your healthcare facility is now energy-efficient, your

utility costs are dramatically reduced, you paid nothing

out of pocket for the upgrade, you have no debt on your balance sheet - and

you enjoy instant savings literally from day one

34 How To Upgrade Regardless of Your Budget


Your healthcare facility is completely energy-efficient upgraded

Complete Upgrade

Energy Savings as a Service accomplishes

everything you are looking for in an energy

upgrade solution - without the headaches,

without the financial nightmare, without

budget issues, and without the ‘debt

albatross’ hung around your neck.

It makes you wonder: Why hasn’t anyone

thought of this before?

No Budget? No Problem

You don’t pay a penny out of pocket; everything is completed without any up-front investment from you

Zero Up-Front Cost

It’s not a loan - so nothing is added to your balance sheet

Zero Debt

All the maintenance of the equipment is handled as part of the service, at no cost to you

Zero Maintenance

Your utility costs plummet from day one - immediate savings

Instant Savings

Isn’t this what you really wanted in the first place?

More Profits


Welcome to the Future of Energy Efficiency

Now, finally, your healthcare facility can become energy-efficient … faster than you ever thought possible, and without any of the financial risks that have been holding you back.

This is how an energy efficiency upgrade is supposed to work.

Prove it to Yourself for Free No cost. No risk. No obligation.

ADDRESS770 N. Halsted,

Chicago, IL 60642

PHONE+ 844.768.7227

[email protected]

WEBSITEwww.ouscapital.com

Don’t just take our word for it.

See for yourself how Energy Savings as a Service can work for your healthcare facility, for your situation.

Your journey to energy savings begins with a great conversation. Connect with our team and schedule one with us today.

About OUS Capital

Delivering onsite energy savings with no debt or investment required, Onsite Utility Services (OUS) Capital provides energy

upgrades and savings as a service to large and small energy users alike.

Through our Energy-as-a-Service platform, we design, invest, procure, install, and maintain onsite energy efficiency retrofits

and distributed generation systems on behalf of our customers; providing them energy savings and improved cash flow from

day one while freeing their capital to be invested back into their own businesses and institutions.

OUS Capital invests in onsite utility solutions for both small and large organizations nationwide. Energy-as-a-Service solutions

are ideal within these sectors as they lower operating costs, conserve capital, improve facility asset value, provide a

competitive advantage, and avoid the accumulation of debt.

how much will an energy upgrade for my healthcare facility ... · how much will an energy upgrade...

Documents