Understanding health care energy sourcing strategies

Energy procurement used to be a simpler task. When energy costs largely were regulated and fixed, hospital engineers simply purchased energy directly from local utilities. Today, energy-procurement decisions can be more complex because of a variety of factors, including market deregulation in many areas, new energy and financial options, advances in energy technology and an emphasis on sustainability.

A new monograph from ASHE and the Association for Healthcare Resource & Materials Management helps health care facility and supply chain professionals to understand new methods for sourcing energy in deregulated markets. "Energy Procurement: A Strategic Sourcing How-To Guide" is available on the ASHE website as a free PDF download for members.

The monograph states that energy is a financial commodity traded using financial tools, and that financial methods should drive hospital energy decisions. Using energy purchasing best practices can result in budget savings and can help hospitals to avoid unwelcome surprises on their energy bills. The monograph shows how to match a health care organization’s cost and risk goals with the right energy investment strategies.

The monograph covers three main strategies for energy procurement. They are:

Aggregation. A group of health care facilities can create buying power in the market by working together. For some facilities, this may mean using group purchasing organizations. Other facilities may choose to aggregate with other hospitals or health care facilities within their health care systems. Regardless of how hospitals aggregate, buying together can lower costs and give health care organizations greater access to the best energy products and contracts.

Alignment. In the past, energy procurement largely was the responsibility of health care facility directors. In today’s complex energy environment, professionals from other departments — especially finance and supply chain — can provide value in the energy-procurement process. The monograph suggests aligning facility, finance and procurement professionals in an energy committee to handle energy procurement. Expertise from each of these professionals can lead to a stronger energy-management program.

Analytics. Energy suppliers often use statistical probability modeling to determine pricing for their energy products. Energy purchasers like health care organizations also can use analytical tools to help optimize their energy purchase. Analytical tools can be used to inform energy strategy, forecast market trends and ensure an optimal balance of savings opportunity and budget stability.

Deanna Martin is the membership and communications director at the American Society for Healthcare Engineering.

ASHE INSIGHTS

Important monographs available from ASHE

Following are two recently released monographs that can be accessed by ASHE members as free PDFs at the resource library.

• Promoting the Value of The Facility Department to the C-Suite. This monograph gives strategies and real-world examples of facility professionals who have successfully shown the value of their departments to organizational leaders.
• Risk Assessment of Medical Equipment. A key part of the Joint Commission’s environment of care management plans, risk assessments of medical equipment are covered in this new ASHE monograph. It presents a framework for facilities professionals to follow.

Design guidelines available to industry through ASHE

The 2014 editions of the Facility Guidelines Institute’s Guidelines for Design and Construction of Hospitals and Outpatient Facilities and the Guidelines for Design and Construction of Residential Health, Care, and Support Facilities can be purchased at www.ASHEstore.com.