A broader view

Considering environmental, social and economic impacts, such as air pollution, health inequalities and local jobs in a sustainable health and care system is, according to the NHS Sustainable Development Unit, increasingly being viewed as a health opportunity and cost-effective investment, rather than a cost. But can NHS bodies really make progress on developing sustainable services – in their broadest sense – while in the throes of such a difficult financial challenge?

It has to. That’s the simple response from Jerome Baddley, head of unit at the Sustainable Development Unit (SDU). Sustainability for the NHS is about much more than making its contribution to reducing the country’s carbon footprint and the emission of greenhouse gases – important though that is. It is intrinsically linked with managing demand for services. ‘If we are serious about prevention, every health pound spent should also leverage improvements in population health, driving down demand for healthcare and the consumption of resources to meet that demand,’ he says.

Viewing carbon reduction, environmental sustainability and the wider determinants of health as a separate issue from other decisions – should we invest in access, reduce costs or improve our environmental performance, for example – is the wrong approach.

‘Thinking about reducing carbon is too limited,’ says Mr Baddley. For example, travel is clearly a major contributor to the UK’s carbon footprint and some 5% of all travel is estimated to be health related. However, health-related travel is also a significant contributor to air pollution, contributing at least 10,000 life years lost each year, according to the SDU. So the air pollution impacts of procurement and commissioning should be considered not only because the service needs to meet greenhouse gas reduction targets, but because it has an impact on health. Any negative impact on health will translate into increased demand for services in future. The new Health Outcomes of Travel Tool (see following page) developed by the SDU can help finance staff quantify the health in quality adjusted life years and social cost of travel in any business case. 

‘Some things have a longer term value in terms of health and we need to get better at evaluating the economic case for some of these investments on top of any immediate cashable returns,’ says Mr Baddley. He adds that factoring in the environmental impact and sustainability issues often also leads to other improvements.

‘When you authorise people to look with this mind set – making these considerations valid in the decisions they take – you often find things that have a financial benefit,’ he says. ‘Taking a step back and asking how something could be done in a more sustainable, environmentally friendly way often leads to finding a better way to do it.’

Having said that, the direct reduction of carbon emissions is a key part of the sustainability strategy. The Climate Change Act 2008 requires the UK to cut greenhouse gas emissions by 80% by 2050 (compared with a 1990 baseline). The NHS contribution to this has been mapped out, first in a carbon reduction strategy and more recently in a sustainable development strategy reflecting the broader view around sustainability.

An initial target, of a 10% reduction in emissions by 2015 (compared with 2007 baseline) was achieved – in fact, slightly exceeded. And this was against a backdrop of an 18% increase in inpatient admissions over the same period. But the next target of a 34% cut (compared with 1990) by 2020 looks a bigger ask all together – especially as the NHS is currently facing significant financial challenges.

Mr Baddley recognises that the current financial climate adds challenges to making progress with the sustainability agenda. Projects with quick paybacks should be no problem, as they will support trusts in achieving often demanding cost improvement programmes. But it is medium- to long-term payback that might prove more difficult to get off the ground. 

A five-year payback might seem ‘fantastic’ in any other business sector. But he recognises that with provider capital funding scarce and revenue budgets constrained by control totals, a simplistic view of business cases as merely investing in environmental issues will not work.

‘There is a big role for finance in this,’ he says. ‘We need to make sure there is the knowledge and awareness in finance teams of the importance of the broad economic case that sits alongside the decision-making process,’ he says. ‘Carbon reduction, social value and air pollution – they all need to be adequately weighted and valued when making decisions, if we are to cost the full impact or benefit of our decisions on the health system.’

Some of the NHS’s overall contribution to reducing greenhouse gases will be delivered by factors outside NHS bodies’ direct control. The government’s Clean growth strategy, launched in October, highlighted that 47% of UK electricity came from low-carbon sources in 2016 – twice the level in 2010 – in part supported by the world’s largest installed offshore wind capacity. This has already helped the NHS deliver its climate change commitments and, as the energy the NHS consumes gets even greener, it moves closer to its further reduction targets. 

In fact, SDU figures suggest that 30 percentage points of the required 80% cut by 2050 will be delivered by expected national and international government actions. 

That still leaves a lot for the NHS to do to make up the difference. SDU projections suggest that government actions and expected health sector actions – including greater energy efficiency, reduced health related travel and better procurement – will still leave the health and social care sector more than 20 percentage points short of its 80% 2050 target. More opportunities need to be identified and realised.

Some managers suggest that the lack of meaningful hard targets at individual organisation level, means that environmental investment – or at least investment that adds to the short-term financial challenge – gets overlooked. Managers want to make more progress with the green agenda, but direct patient care, access and financial stability are their – and their regulators’ – prime focus.

The new Clean growth strategy talks about increasing the funding available in the existing public sector energy efficiency loan scheme. It also sets an ambition for the public sector to become a leader in reducing carbon emissions. Recognising that only parts of the public sector have set emission reduction targets to encourage a greater focus on carbon and energy production, the strategy trails the introduction of wider public sector voluntary targets, with a view to these becoming mandatory.

Could this mean mandatory targets for individual NHS bodies, rather than the current national NHS target with NHS bodies encouraged to contribute? Mr Baddley certainly suggests the strategy represents a strengthening of the language around the importance of individual organisations playing their part in carbon reduction. 

There are already mandatory requirements for organisations to have sustainable development management plans (SDMPs) in place and to report environmental impacts annually. But these requirements are not yet fully met by all organisations, and the SDU says the quality of SDMPs and reporting is variable. 

Recent concerted work by the SDU, NHSI and HFMA, however, has shown some real impact on the quality of sustainability reporting, with the percentage of reports identified as good or excellent this year likely to increase substantially from last year. The SDU will be focusing on SDMPs over the coming year.

There are other potential levers to drive more sustainable behaviour – clinical guidelines, for example. Respiratory inhalers using hydrofluorocarbon propellants have been estimated to account for up to 3% of the NHS’s entire carbon footprint – a staggering figure that is actually lower than some earlier estimates. Alternatives, such as dry powder inhalers, are used far more extensively in parts of Europe than in the UK. The SDU is working with NICE to understand how environmental impacts could be considered alongside other value assessments when producing technology and treatment guidelines. Mr Baddley says asthma is one area being looked at in a pilot study.

Rod Smith is project director at East Sussex Healthcare NHS Trust and spokesman for the HFMA Environmental Sustainability Special Interest Group. He acknowledges that the current financial position can be a distraction from achieving important environmental goals. ‘People are understandably giving priority to the day job,’ he says. ‘It is up to us to help them see that there are aspects of what we are proposing that make a good contribution to that day job.’ 

Combined heat and power (CHP) and low-energy lighting are often rolled out as the classic ‘cut costs and emissions’ projects. ‘All these things are being done somewhere,’ he says. ‘But not everyone has done these things or not to an appropriate level.’

Echoing Mr Baddley, Mr Smith says that it mustn’t become a fight between different investment options. ‘We know the pressure financial people are under, but we also recognise that lots of people really care about this agenda,’ he says. ‘So we need to support them by making it easier for them and bringing the opportunities to light.’

Sussex success

East Sussex is facing significant financial challenges, and is working to come out of financial special measures, but it has been able to take a CHP project forward on its Conquest site, supported by external advisory bodies. But Mr Smith is clear that the scale of financial difficulties facing trusts shouldn’t be a reason not to explore cost-effective sustainability projects. 

Estates and finance teams need to work closely to get projects off the ground. The estates team understands the technology involved in a CHP plant, for example. Finance can help construct the business case, taking account of uncertainty over future gas and electricity prices – prices that will be avoided for buying the trust’s electricity and the price paid for selling excess power back to the grid.

‘Ideally there should be regular meetings between finance and estates teams,’ says Mr Smith. ‘But there is a question over whether they have enough time to take this forward systematically in the current climate.’

Greater use of the Treasury’s five-case model for business cases – requiring strategic, economic, commercial, financial and management cases to be made – would support more holistic decision-making, he adds. ‘Only by looking in the round, as the five case model requires, can you do a proper evaluation of proposals and produce a credible plan.’ 

He believes this detailed approach – normally reserved for major financial projects – would help NHS bodies factor in broader considerations such as environmental impact and the long-term effect on public health. While he accepts it is a major undertaking for smaller schemes, a scaled-down approach that ‘asked the right questions’ could force organisations to take more of a team approach, ensuring solutions deliver the best broad benefits and not measured just in financial costs.

The HFMA Environmental Sustainability Special Interest Group has a part to play, says Mr Smith. ‘Working with the SDU and Public Health England, we can get a balanced message out and ensure the finance community is fully aware of the need to make progress with the sustainability agenda in its broadest sense.’