Industry Voices—Collective action is the key to decarbonizing healthcare

This year’s United Nations Climate Change Conference, better known as COP28, featured its first official Health Day. Climate change is a global health crisis, disrupting access to clean air, safe drinking water, nutritious food supply, and safe shelter. Extreme weather events are becoming ubiquitous in headlines and climatologists expect the frequency and severity of climate-related events to increase. The recently released Fifth National Climate Assessment reports that between 2018 and 2022, the U.S. experienced 89 disasters that each cost at least $1 billion in damages — a mix of droughts, floods, severe storms, tropical cyclones, wildfires, and winter storms. During that time, Texas alone experienced $375 billion in disaster damages. Recent studies report that extreme weather accounted for 9.4% of all deaths globally between 2000 and 2019 and project that climate change will cause 83 million excess deaths by 2100 due to temperature-related mortality alone.

The business of healthcare and access to healthcare services and supplies are increasingly vulnerable to the effects of climate change. Health systems are at risk for suspended services, patient evacuations, postponed procedures and closures, and healthcare suppliers are at risk for disrupted operations and distribution, as well as supply chain shortages. Organizations need to prepare for these changes, while at the same time, addressing their own contributions to climate change. In the U.S. alone, $880 billion and 100,000 lives could be saved annually by eliminating fossil fuel pollution.

Growing momentum for collective action

The U.S. health sector is responsible for 8.5% of national emissions, with the majority (82%) of those emissions coming from the value chain. Medical devices and supplies generate 7% of the U.S. health sector footprint. Transitioning to net zero is a priority for organizations across industries, as the pace of emissions reduction needs to accelerate significantly in this decade to reduce the impact of climate change. While the health and life sciences sectors both have set fewer net zero targets than most other industries, the percentage of organizations setting net zero targets rose by 19% for health and 8% for life sciences from 2021 to 2023 – showing new momentum.

Collective action, defined as initiatives done in collaboration, is critical to drive meaningful change at the pace and scale needed to cut emissions in half by 2030. Health systems and medtech suppliers need to work together to address product composition, packaging, distribution, utilization, and end-of-life, to decarbonize emissions from the supply chain. This collaboration is increasingly important as reporting requirements expand to include Scope 3 emissions, which are elusive and difficult to track. Organizations need access to emissions data from their vendors both upstream and downstream, while also encouraging those vendors to address their own emissions.

Priority actions under four levers

Last year, Kaiser Permanente, Health Care Without Harm, and Accenture assembled a roundtable of health systems, their top suppliers, group purchasing organizations (GPOs) and distributors, to discuss how they might work together to reduce emissions in the healthcare value chain. They identified collective actions in four decarbonization areas – renewable energy, product innovation, product usage, and transportation & logistics – to drive progress in emissions reduction efforts on a 24-month roadmap.

Renewable energy

Health systems spend over $8 billion each year on energy, accounting for about 10% of the energy used by commercial buildings in the U.S. Because they operate around the clock, hospitals use 2.5 times more energy per square foot compared to office buildings. Collectively, health systems and medtech companies can pursue aggregate Power Purchase Agreements (PPAs) to procure renewable electricity. Organizations can pool their demand through an aggregate PPA to procure renewable electricity at a lower price. This enables small companies, that may not generate enough demand on their own, to benefit.

Product innovation 

Embedded carbon in medtech products contributes substantially to both health systems’ and suppliers’ Scope 3 emissions. Suppliers have been looking at ways to produce more sustainable products in response to customer demand and to meet their own decarbonization goals. However, changing products can be particularly challenging because design and manufacturing changes may require significant upfront investment, longer timelines, and regulatory considerations. Collaboration between health systems and medtech suppliers creates a significant opportunity to focus on specific subsets or categories of products and identify ways to decarbonize across the product lifecycle.

In the short-term, collaborating on product and packaging takeback programs will allow medtech suppliers to collect and reprocess or recycle the component parts of used products. Health systems and medtech suppliers can also work together to identify packaging materials that can be reduced or made more sustainable. In the longer-term, they can look at broad product composition changes to bring more sustainable products to market. 

Product utilization

Product utilization plays a significant role in the emissions generated over a product’s lifecycle. Single-use devices (SUDs) are ubiquitous in healthcare, but they produce more greenhouse gas emissions compared to reusable equipment.

Together, health systems and medtech suppliers can evaluate opportunities to reduce the impacts of product use in several ways: 1) Look for opportunities to replace single-use devices with more durable options while maintaining patient safety in different clinical environments; 2) Reprocess SUDs to reduce waste, lower costs and address carbon emissions; and 3) Implement annual surgical kit reformulation in which clinicians identify items that routinely go unused during procedures and remove them from surgical packs to avoid the unnecessary purchase, processing, and disposal of those supplies.

Transportation and logistics

According to the U.S. Environmental Protection Agency, the transportation sector generates the largest share of the country’s GHG emissions, contributing 28% of total emissions. The health sector contributes to these emissions via the transportation of patients, employees, and goods and services. Health systems and medtech suppliers can identify transportation and delivery strategies to decrease emissions while simultaneously increasing efficiency and customer and patient satisfaction.

Reducing the number and frequency of deliveries may require challenging suppliers, distributors, and health systems to make system and process adjustments. This will involve considerations across the supply chain, including advanced ordering and shipping, route planning, receiving product, and optimal storage conditions.

The path forward

While several existing health sector industry collaboratives are working on decarbonization, they are either broad sector collaborations or primarily focused on decarbonizing the pharmaceutical value chain, with limited health system and medtech representation. To address this gap, a new collaborative  of health systems, medtech suppliers, distributors, GPOs and industry partners will be launched this year to implement the collective actions.