By Chris Byerly, Contributing Writer

CFOs do not wake up thinking about kilowatt-hours. Board members are not losing sleep over lighting retrofits. The reality is that the list of concerns for executives running healthcare organizations, energy efficiency probably ranks somewhere below staffing shortages, patient satisfaction scores and regulatory compliance. 

But what keeps coming up in conversations with hospital executives is the realization that energy decisions made today either free up budget for patient care or drain resources that could go elsewhere. The difference between those two outcomes often comes down to how to talk about energy efficiency with people who do not think in technical terms. 

Energy efficiency: Real numbers 

Healthcare organizations operate differently from other businesses, which changes the math on energy savings in ways most people do not expect. It also means working with hospitals and medical facilities differently. 

The U.S. Environmental Protection Agency (EPA) found that every dollar a non-profit healthcare organization saves through better energy performance equals up to $20 in new hospital revenues — assuming a 5 percent profit margin — or $10 in new medical office revenues with a — 10 percent profit margin. 

Let's say an organization implements an energy upgrade that saves $20,000 a year. Over the life of that equipment, the upgrade essentially generates $400,000 in new revenue. For for-profit hospitals, medical offices and nursing homes, a 5 percent cut in energy costs translates directly to a one cent increase in earnings per share. Those numbers wake people up in budget meetings. 

What energy efficiency looks like 

Talking about energy efficiency with healthcare leaders does not involve selling light bulbs. Light bulbs are involved, of course, but the real topic is lowering the cost per bed, which is the metric most healthcare providers use to evaluate operational performance. 

Consider the case of Encompass Health, which operates more than 160 rehabilitation hospitals across the United States and Puerto Rico. The company wanted to modernize lighting across its network. The goal was straightforward — to improve the patient and staff experience while unlocking long-term savings. 

We implemented a national LED lighting retrofit and upgrade program across more than 75 facilities in 27 states. The results: $2.3 million in annual energy savings and more than $500,000 in utility rebates that reduced upfront capital costs. The organization also cut annual carbon dioxide emissions by 10,403 metric tons. But those results only tell part of the story. 

Intangibles matter  

Healthcare executives understand that perception also matters. The way patients, staff and visitors experience a facility affects everything from patient outcomes and staff retention to the ability to attract top talent. 

Better lighting improves the way people perceive an organization. It sets the tone for visitors and patients and demonstrates reliability to employees, who know they can count on the lights operating as needed. It keeps maintenance workers off ladders and out of patient rooms and frees them up for other work because LED fixtures do not need constant replacement. 

Research shows that lighting improvements can increase patient recovery time by 12 percent, lower staff absenteeism by 2.5 percent and improve overall psychological well-being. 

Natural light makes an even bigger difference. Studies show that incorporating daylighting into patient rooms and public spaces can reduce anxiety and depression, improve sleep and circadian rhythms and even lessen agitation among dementia patients. For staff working night shifts, proper lighting can ease the adjustment and reduce fatigue. 

The cost of doing nothing 

Most healthcare leaders focus on the cost of energy efficiency projects, but few think about the cost of doing nothing. 

In facilities that do nothing, maintenance costs keep climbing. Utility bills stay flat or go up. The organization loses out on utility rebates and tax incentives that offset project costs, and they face increasing compliance requirements for long-term resiliency. They also miss opportunities to improve sustainability, which matters more to patients and staff every year. 

Liability is also an issue. Poor lighting in parking lots creates safety risks. Inadequate lighting in clinical areas increases the potential for medication errors. These are not just operational problems. They are legal and financial risks. 

The right approach to testing upgrades  

Healthcare leaders usually want proof before they commit to big changes across their networks, which is completely understandable. Medical facilities are not like other businesses, and what works in an office building does not always translate to a hospital. 

The best approach is to start small by bringing in someone to audit the facilities. Then pick one or two locations, and test the approach there to see what actually happens before rolling it out everywhere. 

A pilot project will show real numbers. Executives walk away knowing what the energy savings look like, how much maintenance costs drop and what staff and patients think. If something is not working right, it can be caught early when it is still easy to pivot. 

For executives and facility managers overseeing multiple facilities, consistency matters. Use the same lighting technology across all locations because it makes everything simpler. Facilities look and feel the same, maintenance teams do not have to deal with different equipment at every site, and planning future upgrades gets easier. 

Healthcare organizations do not exist to manage energy, and they should not have to. But cutting operational costs does not mean compromising patient care. The two goals support each other. 

Hospitals depend on power and digital systems that cannot go down. Reducing energy consumption also reduces how vulnerable facilities are during outages. Less power needed overall means more capacity is available for the systems that keep patients safe. 

The business case is not complicated. Either energy costs drain money from patient care, or those savings fund things that truly matter to the organization’s mission — better patient outcomes, keeping good staff, lower operational risks and a reputation for taking sustainability seriously. These are not nice-to-have benefits. They affect the bottom line and the way the community views the organization. 

Chris Byerly is director of business development at Chateau Energy Solutions.