Market Intelligence

Green & Sustainable Construction

Greening Healthcare

The healthcare industry has been relatively slow to adopt green building practices. While only approximately 2% of all LEED registered projects were in the healthcare sector in 2004, recent polls of decision makers within the healthcare industry suggest an ever increasing interest in applying green building principles to healthcare projects.

The healthcare industry is in the midst of a building spree for a variety of reasons. First, market pressure caused by demographic shifts from city cores to suburbs, aging urban facilities and rapid changes in technology and patient treatment are fueling the growth. Second, legal requirements such as earthquake retrofitting in California are mandating heightened structural standards that often require building new facilities. Third, natural events such as Hurricane Katrina are driving healthcare construction along the Gulf Coast of the U.S.

In the midst of this building boom, both market forces and governmental legislation are turning the healthcare industry toward green building:

  • Increased energy costs - healthcare has the second highest energy usage among commercial buildings and as such energy usage is a very significant portion of a building’s operating costs.
  • New legislation – which includes regional climate initiatives such as the Western Climate Initiative (a collaboration launched in February 2007 between the Governors of Arizona, California, New Mexico, Oregon and Washington to meet regional challenges raised by climate change), existing state level legislation such as California’s AB 32, which requires an analysis of greenhouse gas emissions for all projects subject to a discretionary environmental review, and local green building ordinances in cities such as New York, Seattle and Portland have encouraged the adoption of green building practices.
  • Hazardous materials - Healthcare facilities by their nature contain solvents, caustic chemicals, pharmaceuticals, disinfectants and other materials such as mercury that are carcinogenic, mutagenic or are reproductive toxins and thus require very careful handling and storage. As a result, healthcare facilities have good reason to be concerned about their operations and how these materials are handled by employees and any potential impacts on its patients. The American Hospital Association’s voluntary agreement with the U.S. Environmental Protection Agency (EPA) to reduce waste and toxicity is a testament to the industry’s awareness of these issues.

Green building under the LEED program is a whole-building approach to sustainability that recognizes performance in five key areas of human and environmental health: sustainable site development, water savings, energy efficiency, materials selection, and indoor environmental quality. Until 2003, the healthcare industry relied solely on LEED in implementing green construction and operations on a comprehensive basis. In the area of energy efficiency, there was another resource the EPA and U.S. Department of Energy’s Energy Star program which has enabled healthcare facilities to optimize their energy usage and lower operating costs.

In 2003, a new tool written specifically for the healthcare industry emerged called the Green Guide for Healthcare Construction (GGHC) based in large part on LEED but with significant additional credits dealing with design, materials and purchasing, handling of hazardous materials and operations. Unlike LEED, GGHC is a voluntary self-certifying best practices guide that may be used by teams pursuing LEED certification. Version 2.2 of GGHC notes that the U.S. Green Building Council will release LEED for Healthcare in late 2007, a clear indication that GGHC is not intended to supplant LEED but rather offer additional guidance to healthcare projects seeking to utilize green principles.

In the healthcare setting, green construction and operation is intended to protect the health of patients, workers, visitors and the surrounding community. A survey of LEED registered healthcare projects reveals that green principles are applied to some or all of the following categories: site/water, indoor environmental quality/materials, energy, waste/construction practices, transportation and operations.

Case Study: Boulder Community Foothills Hospital

One example of these principles put into practice is Boulder Community Foothills Hospital in Boulder, Colorado. Completed in 2003, it was the first U.S. hospital to obtain a LEED rating. Factors leading to LEED certification included

  • Mechanical systems that provide more effective and better ventilation, such as operable windows that connect to the HVAC system to improve indoor air quality.
  • During construction, workers flushed out the building interior with forced air to reduce VOC (volatile organic compound) off gassing.
  • Using low-VOC paints, adhesives and carpets to alleviate allergies and breathing problems.
  • Purchasing locally sourced materials and those with high recycle content.
  • Utilizing an efficient power plant that provides heat, lighting and hot water for the entire campus.
  • Installing compact fluorescent bulbs.
  • Painting the roof white to reflect summer heat and reduce air conditioning demand.
  • Hiring a third party consultant to test and optimize the energy performance of the building (commissioning).
  • Reducing water consumption by utilizing drought tolerant plantings and other xeriscaping (planting native vegetation that requires no additional irrigation) and installing waterless urinals and efficient sensor fixtures.

Case Study: Houston School of Nursing

Another green healthcare project is the University of Texas at Houston School of Nursing in Houston, Texas. The School's goals for the project were to use natural, recycled and reclaimed materials from manufacturers and sources in Texas to the fullest extent possible and to utilize systems that ensure efficient use of resources that drive recycling.

Green elements included:

  • Utilizing low VOC adhesives and finishes, and no PVC plumbing piping, wall covering, window treatment, carpet or resilient flooring.
  • Using an indoor air quality management system during construction.
  • Purchasing locally sourced and high recycle content products.
  • Using rapidly renewable materials such as cotton insulation and linoleum floors.
  • Using high performance glazing on windows.
  • Utilizing daylighting with user/occupancy and daylighting controls and installing task lighting.
  • Installing a rainwater harvesting system, planting native plants, constructing a grey water collection system (collecting water from lavatories for reuse or irrigation), and installing high efficiency plumbing fixtures such as low flush toilets and waterless urinals to reduce water consumption.
  • Implementing a water use education program.

Benefits of Green Building Principles

A May 2007 study released by McGraw-Hill Construction offers a preliminary view of the impact of green building principles on the healthcare sector. The study’s major findings were:

  • Green healthcare facilities reduce energy use which reduces green house gasses and improves air quality.
  • 47% of respondents said that patient recovery time is reduced in green buildings.
  • Benefits of green building include lower operating costs, greater innovation and public relations benefits.

In line with this, there are indications that some healthcare providers have started to embrace the triple bottom line approach (people, planet and profit) to their capital projects as it becomes clear that focusing on health impacts in a broader sense may have advantages in the marketplace. Other than the McGraw-Hill Construction study, there is very little hard data on the effects of green construction and operations on healthcare facilities. There is, however, a significant body of research on the positive effects of green building in other settings.

What is clear is that improved lighting, especially the use of natural light, provides significant improvements in patient outcomes. According to Judith Heerwagen Ph.D., an environmental psychologist, sunlight in healthcare facilities significantly reduces medical costs.

A nationwide study of thirty schools performed by Gregory Kats, a leading expert in the area of costs and benefits of green buildings, reveals that green schools cost about $3 more per square foot to build but provide financial returns of approximately $70 per square foot (Kats 2006). The financial benefits consist of improvements in the categories of (in order from highest to lowest): higher student test scores and faster learning, energy savings, cold and influenza reduction, improved teacher retention, asthma reduction, increased local employment, reduced emissions, lower water usage, and reduced wastewater generation.

Another authority in the field, and specifically the health and productivity advantages of green buildings, is the Center for Building Performance at Carnegie Mellon University. The Center reviewed more than 1,500 studies that compared certain aspects of buildings such as lighting, ventilation and thermal control to tenant health and productivity. Green features such as increased outside air, individual control of air flow, moisture control and pollution source control had a dramatic impact on occupant health.

For example, a sampling of the studies reveals that increased outside air reduced sick building syndrome symptoms by 33% to 66% depending on the study. Sick building syndrome is a building related illness not easily tied to exposure to a specific chemical that produces symptoms such as nausea, headaches, nasal and chest congestion, wheezing, fatigue, chills and fever, muscle pain, eye problems, sore throat, and neurological symptoms that tend to reduce occupant productivity. Pollutant source controls were shown to reduce asthma symptoms by 13.5% to 61.5% depending on the study. A sampling of the leading productivity studies suggests average gains of 3.6% as a result of either individual temperature control or desktop temperature control.

Challenges Remain

Notwithstanding the benefits of green construction and operations, several challenges to widespread adoption of green building principles within the healthcare sector remain.

First, there is a widely held perception that selecting green building entails a significant price premium. A study, released in July 2007 by the firm Davis Langdon, suggests that there is no significant difference in average cost between green and non-green buildings. The study examined, among other things, 17 healthcare facilities (both LEED and non-LEED) and found no statistically significant price difference between the two.

Second, there is very little data on the benefits of green building specifically for the healthcare sector that proponents can use to educate stakeholders and to bolster the case for green building.

Third, some commentators have suggested that the healthcare industry is, on the whole, uninformed about the relationship between green construction and operations and health.

On the other hand, the McGraw-Hill Construction study offers a view of what senior healthcare and hospital administrators think about green building principles that appears to be at odds with some commentators’ assessments of the industry. Overall, there appears to be an increasing trend toward the use of green construction and operations as 19% of respondents stated that their organization will be significantly involved with green building in 2008. A significant majority (60%) of respondents believe that green construction and operations will reshape the healthcare construction sector and 20% indicated that they expect to be highly involved (more than 30% of their projects green) with green projects in 2008. Lastly, an amazing 91% of respondents stated that patient well-being was an important reason to utilize green building strategies.

While challenges certainly remain and information on cost savings is incomplete, the health care industry appears to be ready to accelerate its use of green construction and operations. Market forces, governmental legislation and increased awareness are driving the industry to adopt green building principles.

What remains to be seen is how quickly the change will occur, what competitive advantages will green healthcare facilities gain over their traditional counterparts, and how those advantages will translate into a sales price differential.

Mr. Peharda is a real estate attorney with Eisner & Frank in Beverly Hills, California and can be reached via email at kpeharda @ eisnerlaw.com.

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