Becker's Hospital Review

Finance & Revenue Cycle 38 At North Shore University Hospital in Manhasset, N.Y., executives and leaders decided to invest $8 million into a new chilled water distribution system. Neil Rosen is director of sustainable development and facilities services at Great Neck, N.Y.-based North Shore-Long Island Jewish Health System — the parent organization of North Shore University Hospital. He says although this was a large upfront cost for North ShoreLIJ's flagship hospital, it allowed the entire plant to more efficiently cool water and keep temperatures under control. He says the new system has resulted in annual savings in excess of $1.3 million — meaning these types of initiatives still have a reasonable return on investment for costconscious CFOs. At Beaumont, Ms. Winokur says the health system replaced its chilled water system with a continuous loop design — saving more than $37,000 every year with an ROI of 16 months. Furthermore, the kaizen teams retrofitted numerous water fountains with spouts to fill water bottles specifically — while unplugging the remaining water fountain chillers — saving up to $14,000 annually. 6. Install solar panels in sunny areas. Solar energy has been around for a long time, but it is finally reaching a point where it is more economical for hospitals and health systems to invest. In fact, some hospitals may be able to apply for grants and rebates to offset the upfront costs — all while enjoying the cost savings. In 2010, leaders at North Shore-LIJ's Southside Hospital in Bay Shore, N.Y., installed a solar panel system on the hospital's roof. The total project cost roughly $300,000, but Mr. Rosen says the hospital was able to receive a $270,000 federal grant from the New York State Energy Research and Development Authority. All in all, the project cost Southside Hospital less than $30,000, and the solar panels have saved the system almost $12,000 to date. 7. Replace inefficient sinks, toilets and urinals. When it comes to any business, hospitals included, bathrooms are rarely thought of as an area of cost savings. They serve one purpose very well and are often ignored unless a major issue arises. However, Ms. Winokur says Beaumont has saved about $257,000 annually in water costs by converting their inefficient sinks, toilets and urinals to low-flow models. For hospitals willing to take the extra step, there are also waterless urinals available. "Hospitals can emulate what we are doing and use that as a road map," Ms. Winokur says, adding that this and other initiatives have been the products of "interested employees." 8. Look closely into new recycling initiatives. Most hospitals and health systems today are involved in some type of recycling program, but there are many different types of recycling programs out there, some of which can lead to greater savings. For example, Mr. Rosen says the 16-hospital North Shore-LIJ Health System has actually brought in more than $600,000 from its recycling program. "With little to no cost — just the bins, posters and education components — we have diverted 6,190 tons of waste from the landfill from 2009 to 2011," he says. 9. Use timers to heat coffeepot water only during business hours. Even an item as small and simple as a coffeepot was able to save Beaumont $34,000 per year, Ms. Winokur says. Previously, Beaumont's 1,070-bed Royal Oak campus had 110 commercial-sized coffeepots, all of which heated water to make coffee around the clock. However, many employees in those areas with a coffeepot are gone in the evenings and on weekends, which led a kaizen team to suggest using timers on all coffeepots. Now, coffeepots are shut down when employees leave for the day, and they restart an hour before employees arrive in the morning. "We wouldn't have gotten [this saving] if we didn't go and observe," Ms. Winokur says. "Look at everything that is plugged in and draws energy and ask if you need it 24/7. Can it be powered down?" n Moody's: Record $20B of Non-Profit Healthcare Debt Downgraded in 2012 By Bob Herman  I n 2012, Moody's Investors Service downgraded $20 billion in non-profit hospital and health system debt — a 213 percent increase from 2011 and the highest amount of downgraded debt since Moody's started tracking the data in 1995, according to a new report from the credit rating agency. The amount of downgraded debt for nonprofit hospitals and other healthcare providers was also more than double the $9.7 billion of upgraded debt. Carrie Sheffield, a Moody's associate analyst, said the large downgrade figures were attributable to declines in patient volume and weak revenue growth. "The downgrades were also driven by declines in liquidity, more competition, increased debt load and many hospitals faced management and governance issues and pressures on pension funding," Ms. Sheffield added. Three large health systems contributed to more than half of the downgraded debt in 2012. Roughly $13 billion of the downgraded debt was spread among Englewood, Colo.-based Catholic Health Initiatives, San Francisco-based Dignity Health and New York City-based Memorial Sloan-Kettering Cancer Center. Moody's also found that credit downgrades for non-profit hospitals and health systems outnumbered upgrades 40 to 38. Both credit rating tallies were lower in 2011, at 23 upgrades and 34 downgrades. n Subscribe Today! Becker's Hospital Review CEO Report E-Weekly To subscribe to the FREE E-Weekly, visit www.BeckersHospitalReview. com and click on the "E-Weekly" tab or call (800) 417-2035

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