New software tool calculates overall costs of green products

Leading health care sustainability steward Practice Greenhealth, Reston Va., rolled out a new tool Wednesday to help hospitals simplify purchasing of green products and evaluate their life-time costs compared with other market choices.   

The Greenhealth Cost of Ownership (GCO) Calculator is a first-of-its-kind program for the health care sector that allows hospitals and health systems to analyze costs of products, equipment and devices beyond the purchase price.   

The calculator also can analyze, if applicable, the cost of maintenance, water usage, energy and disposal. The free tool, which is available to all hospitals and health care systems, was unveiled at an online demonstration and trade press briefing Wednesday.

“Caring for patients, staff and the community while reducing our impact on the environment has become a top priority in how the health care industry carries out our mission,” says Beth Eckl, director of the Environmental Purchasing program, Practice Greenhealth.

“We’re proud to unveil our Greenhealth Cost of Ownership Calculator, designed to help hospitals analyze how environmentally preferable products can actually reduce costs while minimizing environmental impact,” she says. 

The tool is expected to help drive a shift in how hospitals make purchasing decisions by providing data that allow health systems to assess whether investing more up front in green products can reduce costs in the long run.

Eckl demonstrated the use of the calculator for the hypothetical purchase of an energy-efficient lab freezer that was more expensive compared with three other similar products. The calculator compared the costs of operating the four products after one year, average annual cost of ownership and after 20 years of use.

Because green products can cost more than other options up front, it can create barriers to environmentally preferable purchasing, Eckl says. The tool is designed to remove the obstacle.

“It has sometimes been difficult to understand how the products that we use everyday in our hospitals and clinics impact the environment or affect our bottom line working for or against our mission,” says Andy Madden, senior director of supply chain, Dana Farber Cancer Institute.

“With the Greenhealth Cost of Ownership Calculator, we have a new tool that allows us to understand the total cost of ownership of products and services to help make smarter purchasing decisions and lower costs,” he says. He adds that the calculator will help hospitals to make more educated decisions on medical equipment and device purchasing.

“The calculator will get us to a better decision for the organization and show the organization over time that not only can we save dollars, but we can save resources,” he says.

Practice Greenhealth began development of the tool in January 2014 with participation from major organizations including Boston-based Dana Farber Cancer Institute; Dignity Health System, San Francisco; Kaiser Permanente, Oakland, Calif.; group purchasing suppliers and others.

Organizations can learn more about the tool, download it and register for the first of three live 60-minutes webinars beginning Sept. 13 by visiting Practice Greenhealth's website.