Accounting for Healthcare Sustainability: Patient Care, Planet Protection and Bottom Line Resuscitation

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Abstract

From its humble beginnings in almshouses for the poor, the health care sector of the economy has grown to exceed 17 percent, or $2.8 trillion, of the U.S. Gross Domestic Product, with hospital care representing the largest component of the sector at $882.3 billion (cms.gov). Confronted with the rising costs of providing health care, the increasing demands for care, and the decreasing availability of resources hospitals face an unsustainable future. To overcome these significant challenges, it is essential for hospitals to make sustainability initiatives a strategic goal. Despite the mounting evidence supporting the advantages for the adoption of sustainability initiatives, it is a relatively young movement within the healthcare sector. As hospital leaders tackle the issues of declining reimbursements, increasing regulations, and looming health care reform leadership should consider adding sus¬tainability initiatives to resuscitate their bottom line.

Hospitals rank second as a source of private sector jobs, employ more than five million people, and directly or indirectly support one of every ten jobs in the country. Hospitals also support over $2 trillion of economic “ripple effect” activity through the purchase of goods and services by the hospitals and hospitals’ employees from other businesses in their community, which in turn support additional jobs and economic endeavors (American Hospital Association, 2010a; 2010b). Hospitals operate twenty-four hour a day, seven days a week, generating approximately 7,000 tons per day of waste, including infectious waste, hazardous waste, and solid waste (EPA, 2014).

For most industries sustainability initiatives generally focus on business risks that involve environmental, health, and safety issues. However, healthcare organizationscan benefit from a broader interpretation: planning and managing resources efficiently to optimize the long-term well-being of individuals, organizations, and society. The release of healthcare industry-focused standards by the Sustainability Accounting Standards Board (SASB) highlights the importance of this issue. While the standards are directed for use by publicly-listed companies, healthcare delivery in this country is dominated by nonprofit organization who should consider these standards as best practice. At issue are which sustainability issues a health care system should engage in. Therefore, this paper makes a business case for the adoption of sustainability initiatives by examining current global sustainability healthcare practices and their related financial impact.

Authors

• Michele McGowan, Kings College

• Tara Honea Saracina, Claflin University