Rae Woods:
From Advisory Board, we are bringing you a Radio Advisory. My name is Rachel Woods. You can call me Rae. Climate change can seem like an overwhelmingly vast problem, but like so many other public health challenges, leaders must realize that they have a significant influence and frankly, a responsibility to take action and shape the course of the future. Climate change is a public health challenge and it is one where the healthcare industry is both directly impacted by and directly responsible for. To discuss the state of the climate problem, I've brought Miles Cottier, an expert with Advisory Board's international research team.

Rae Woods:
Welcome to Radio Advisory, Miles.

Miles Cottier:
Hi, Rae. Thanks for having me.

Rae Woods:
All right. I think the accent gives it away, but go ahead and tell our audience, where are you dialing at from?

Miles Cottier:
I'm calling from all the way across the Atlantic, in a tropical paradise called Oxford in England.

Rae Woods:
That's got to be a joke. What's the weather actually like?

Miles Cottier:
Oh, it's always gray. Yeah. 24/7, 365, gray.

Rae Woods:
I want to thank you for talking to us about such a complicated and complex problem in the world and in healthcare particularly. I want to start out by understanding the status quo. When it comes to climate change, how would you describe the mindset of the average healthcare leader?

Miles Cottier:
Generally healthcare as perceived as a really stable entity and that's part of, kind of the existence, it's part of its service mandate. The problem is, is that healthcare stakeholders, healthcare leaders, don't like change happening to it. I think it also feels really far removed that connecting those negative connotations of things like climate change to the impact that their organizations are having on patients, those benefits. Climate change is enormous, it's horrible, it's macro, it's complex. Organizations and healthcare leaders don't know how their actions are contributing to it.

Rae Woods:
That's right.

Miles Cottier:
And how is my organization now in the middle of the tropical paradise of England going to impact climate change well out of harm's way?

Rae Woods:
That's exactly the kind of pushback that I hear when I've tried to have conversations about climate change with healthcare leaders. They see this as a problem, right? That's some progress, but it's this huge intractable problem that doesn't just impact the healthcare industry, so it's only natural for leaders to think this is a problem for someone else to solve, particularly maybe a problem for the government to solve. Why can't we actually wait for some other entity to step in here?

Miles Cottier:
Again, that is very much the mindset that the industry has adopted, right? The government does have the power to make the move here, so we as healthcare leaders will wait for them to enact those changes. I think it's pretty obvious to see, especially if you look last year at the lukewarm outcome from the COP26 summit, the governments aren't going to do enough, not anytime soon anyway. The way to think about climate change is to bring it down a level; bring it back to the locality, bring it back to our own organization.

Rae Woods:
And to your tropical paradise?

Miles Cottier:
And to my tropical paradise.

Rae Woods:
Your take on climate change is that this is absolutely a problem for healthcare leaders to help solve specifically. Why is that? Why is that your take?

Miles Cottier:
So healthcare is not a passive actor anymore. It's a major contributor to climate change. The U.S. Health Sector contributes 9% of its nationwide emissions, so if the global health sector were a country, it's the fifth highest emitter on the planet.

Rae Woods:
Oh wow.

Miles Cottier:
Now that 9% of the U.S. is much higher than aviation, which we think is one of the worst committers, and only slightly less than the entire manufacturing sector.

Rae Woods:
Oh my God.

Miles Cottier:
Yeah, exactly. The problem is the industry doesn't know that it's doing it. I can't tell you how many executives I've spoken to that don't know their energy usage, their water usage, their footprint, or how much waste they produce.

Rae Woods:
Right.

Miles Cottier:
And say for a few countries, most execs have no idea how much their organization contributes to climate change.

Rae Woods:
Which is why I don't want to necessarily blame leaders. There is clearly some personal responsibility for the healthcare industry, but it makes sense that individual actors probably don't know the depth of the problem because we don't actually have good data or standardized data to actually track things like an organization's carbon footprint.

Miles Cottier:
No, exactly. I think that's part of the problem. I think leaders aren't aware of their footprint because they don't know how to track data, their systems aren't in place, there's no standardized method, no governmental top down mandate forcing organizations to track and report. Some organizations, especially in the U.S., have started to do quite well here; Kaiser Permanente, Boston Medical Center, to name a couple. I think even they will tell you that they haven't perfected their data collectional reporting yet.

Rae Woods:
Would that actually even be enough? Let's say that we had a better understanding of healthcare's influence, we had better, more standardized data. Would that be enough to actually push leaders to take action?

Miles Cottier:
It would be the star of the journey, I think. The problem is with the status quo that we have with healthcare being so stable, it's reinforced these cognitive biases in healthcare leaders minds, right? So cognitive biases, we mean that the oversimplification of the complex world we live in, that kind of reinforces certain behaviors. We spoke about what we call the bystander effect, so it's the government's problem, not our problem. We won't make any changes. That's one example.

Rae Woods:
That's right.

Miles Cottier:
Once healthcare leaders actually start making moves to move those behaviors into the kind of forefront into their consciousness, they can actually start to make changes to overcome them.

Rae Woods:
And it will influence more people to take action.

Miles Cottier:
Exactly.

Rae Woods:
Miles so far, we've been talking about the depth of the problem and the specific actions of the healthcare industry. We've also started to unpack why we haven't seen a ton of movement, at least not yet, but I have to believe that there has been some movement. You referenced a couple of healthcare systems in the U.S. that are at least getting part of the data story right. What has the healthcare industry done so far to actually combat climate change?

Miles Cottier:
Sadly, not a lot in the U.S. I think they're at probably 10 to 20 organizations that have done something meaningful. Maybe 20 to 30 have gravitated toward action, but it's been relatively low at this point; hiring a chief sustainability officer or creating a roadmap to sustainability. It's a good start, but it's not enough. The rest of the countries organizations have done nothing at all. Another thing is that HHS has issued a voluntary initiative for U.S. hospitals, health systems, pharmaceutical companies, to submit pledges, to reduce greenhouse gas emissions. That's voluntary for now, but it's not enough.

Rae Woods:
Is your kind of estimate on the amount of action here just for providers or does that span all kind of corners of the healthcare industry?

Miles Cottier:
It spans all corners of the healthcare industry. The one thing I will say is that about 70 to 80% of the ecosystems emissions that come from the supply chain.

Rae Woods:
You're joining us from a team that actually focuses on international research, and thus far we've been talking about the U.S., but how does what we see at America compare to what you are tracking in other countries?

Miles Cottier:
Well, I'd say most of the early movers, most of the best performance here, have come generally from Europe and the UK. Most of which of course are public health systems. Generally we've seen two types of approach. We've seen top down from the NHS, so stay set a target of the entire health system being net zero by 2040...

Rae Woods:
Oh wow.

Miles Cottier:
... And the wider supply chain by 2045 and they've mandated reporting and they've mandated every organization to submit a path to net zero by the end of this year. We've also seen a more kind of market based approach, so from places like Germany, they set up a project to install what they call climate managers in local hospitals there, which kind of enact local change from the ground up, have a direct line of sight to the CEO as well. So there's two different approaches you can take there.

Rae Woods:
We started off by saying that we, in U.S., can't necessarily wait for government action. What do you want U.S. leaders to learn from these kinds of approaches?

Miles Cottier:
It's difficult for the U.S. to directly copy the UK because of the kind of publicly funded nature of the NHS. I see the best course of action is a bit of both, right? So we wait for legislation that squeezes orgs to report data and commit to targets with incentives and kind of penalties as we go, but because we don't want to wait for it, we have to instill some market based approaches that can be used now that will make a difference whilst we wait for the top down changes to come through.

Rae Woods:
I want to take a moment to emphasize here the influence of leadership. There is certainly a huge influence that government institutions can have, that organizational leaders can have. I also think that there is a role for provider leaders and physicians specifically, right? Doctors actually have a ton of influence over their larger organizations and their communities and their patients, and that can help us drive real change. In fact, I think you have a really interesting take here. Can you tell us about what your opinion is on the role of physicians?

Miles Cottier:
A lack of climate change action is very much going against the Hippocratic Oath, right? First, do no harm. Clinicians are, for better or worse, in healthcare to help people, but they're in action or indeed they're action driving to work in a diesel car, for example, they're having an outsize effect on the patients that they're trying to treat equally. Doing nothing means that you are doing nothing to counteract the effects of climate change. Effectively doing nothing is no longer enough. It's affecting the patients that we are literally here to care for.

Rae Woods:
Honestly, I love this take because we do need clinicians to make sure that they are putting patients first and it's kind of counterintuitive, but really essential that we're thinking about all of the things that happen outside of direct patient care, that also have an impact on patients. We have this conversation when we talk about health equity, we certainly need to have that conversation when we're talking about climate change.

Rae Woods:
Personal responsibility isn't enough, right? Individual people, you and I can't recycle our way out of the climate change problem. There's never enough that you and I could do to get the world out of this challenge. So let's talk about businesses. What are the business implications for an action here?

Miles Cottier:
We need to talk about climate change in the local capacity, right? What does it mean for me? What does it mean for my organization? What does it mean for my staff, my consumers, my patients, and how is my inaction going to affect those stakeholders in 10 years time? It all comes down to cost. Essentially, inaction means that your long term bottom line is going to be damaged. Now we had a look at this and we think it's going to happen in three kind of preeminent ways. Operating expenses are going to go up. It's going to be harder to attract and retain staff talent and patients, or your consumers, are going to start choosing organizations that have a better record for climate change.

Rae Woods:
Let's talk about each of these quickly. Tell me about the impact to operational costs.

Miles Cottier:
Well, we all know that health systems are working within slimmer margins at the moment as a result of the pandemic and kind of the terrible economic times that we work in at the moment.

Rae Woods:
Oh yeah.

Miles Cottier:
Although the upfront costs of it may be slightly higher, environmentally sustainable initiatives are actually going to save money in the long run. Not only this, when governments or regulators do start introducing incentives or penalties for hitting or not hitting emission targets, organizations are going to start being squeezed from both sides, so it's going to be more and more expensive to actually run your business.

Rae Woods:
Now let's talk about the staff piece. This is probably the biggest focus area for certainly provider leaders that I speak to. I'm not sure they make the connection between something like climate change and their retention efforts.

Miles Cottier:
Well, we all know, again, that's retention, recruitment, engagement, they're all very much top of everyone's lists in the moment, regardless of where you are in the world.

Rae Woods:
Yeah, that's true.

Miles Cottier:
Exactly, so you need to do everything in your power to improve upon those elements of kind of workforce management. Now, other industries, if you look into them, that's fashion or the manufacturing businesses, they've already shown us that employees, especially from those kind of younger generations coming through Gen Z's and Millennials, they are starting to choose employers that have better sustainability records and better records with climate change.

Rae Woods:
That's right.

Miles Cottier:
The more you do, the more you involve staff and the more you can contribute to those kind of bottom up approaches we spoke about earlier.

Rae Woods:
The last thing you mentioned is the patient perspective, which I think kind of takes us back to your take on the Hippocratic Oath. How is inaction on climate change going to impact patient demand?

Miles Cottier:
This one's a slightly harder one to predict, right? If other industries are anything to go by, a similar thing is going to happen to patients and consumers as will happen to staff. Patient loyalty's kind of gone. It doesn't really exist to the same capacity used to.

Rae Woods:
No.

Miles Cottier:
Consumers are starting to prioritize sustainability in companies that are providing their services or providing their products that they're looking for. It may be a slightly harder sell because healthcare isn't a commodity, but with the more Millennials and the more Gen Z we see through health systems and through farm companies that are buying their products, the weight of those new preferences are going to impact revenue down the line.

Rae Woods:
So those are the three biggest business implications. Are there some emerging ones that are maybe more on the horizon that you are watching out for?

Miles Cottier:
Sure. I will be the first admit, I am not an expert on this, but the kind of Environmental Social Governance, ESG, is increasingly factoring in credit bond evaluations from your SMPs and your Moody's. Essentially, increasing an organization's environmental and social commitment is going to make it easier for that organization to borrow money on good terms and vice versa for those who are lagging behind.

Miles Cottier:
Again, this commitment is mostly voluntary for now, but it won't be long before that's happening everywhere, and if organizations don't invest in ESG, they'll be called out in a big financial way down the line because they're being squeezed by all sides.

Rae Woods:
What about other purchasers? We talked about patients, but will it stop there with patient and I guess employee preference?

Miles Cottier:
I guess the other thing to consider is from the partnership side, right? So considering the supply chain, which is kind of responsible for most of the emissions in the sector, purchasing and local community partnerships and things like that, generally these organizations are going to choose partners who have a better reputation, because it's better for their own brand. If you are trying to work more with social enterprises or anchor organizations...

Rae Woods:
That's right.

Miles Cottier:
... Their mandate is to prioritize working with organizations that contribute to social justice too.

Rae Woods:
I want to pause for a moment, because at this point in our conversation, I would completely understand if our listeners were feeling a bit defeated, a bit depressed, a bit pessimistic about the future, right? We are saying that this huge problem of climate change is healthcare's responsibility and that if we don't do something, it is going to be yet another thing hitting our bottom lines in a time of incredible change and incredible challenge facing the healthcare industry. Is that the right way to think about this?

Miles Cottier:
It's an understandable feeling. I live in the UK, I'm very much used to feeling depressed and defeated, but I would actually refrain it. I see this as an opportunity for every organization, for every healthcare leader, to demonstrate social activism and commitment to social justice, which we know is such a huge thing at the moment. They can lead the market if they act now and they can use that lead as a kind of philanthropy lever. They can leverage better loans. They can market themselves as an employer of choice and win back the loyalty of their patients and their consumers. To do all of that, you have to start being self aware, right? You have to be aware that you're contributing to the problem and you also have ownership of any solutions as well.

Rae Woods:
Is that where you want leaders to start with just a better awareness of the problem?

Miles Cottier:
Yes. One contact told me that healthcare is in an educational phase, not an implementation phase. So leaders have to understand the problem, how they're contributing to it, and that means, I think working out how to collect and report data, because those operational changes that you need to make. Changing your light bulbs or more organic produce; the small things, they're really easy and you can just go on the internet and find hundreds of news articles of organizations doing that. Only when I think organizations are brave and they take the step to whether what could be potentially a press storm by publishing their data, they will then be able to put themselves ahead of the market in terms of investment and commitment to sustainability.

Rae Woods:
Are there lessons that we can take from the past and apply to the climate change problem? I'm thinking about the fact that this is not the first time that the healthcare industry has had to step up and advance a hugely systemic problem. What can we learn and take from what maybe we've done before?

Miles Cottier:
A good harbinger I'd say for what's potentially to come is actually, if you look back into the 1990s and that clinical quality movement. I will preface this by saying that I don't remember this happening, I was a child, a baby in the nineties, but in the nineties, that aspirin administration for myocardial infarction, which I believe is the standard clinical practice when it comes to patients presenting with it, was only happening for 60% of cases. As soon as CMS started tracking aspirin administration and only started paying providers when they were correctly administering aspirin, within two years, 95% of patients were getting it. So consider the same for admissions reporting, right? A similar reporting and incentive mechanism could be established by CMS, by whoever for emissions and resource consumption and that will drive meaningful investment and change in the industry because people are incentivized to do so.

Rae Woods:
Yeah, I might even take that one step further because what you're describing is a systems approach to a problem and instead of relying on individual actors, instead of relying on one provider to give aspirin to a patient that they suspect is having a heart attack, how do we make sure that a stronger system is in place to enforce and lead that kind of action? That includes things like reporting and mandating and having good data. We've certainly done that with clinical quality and we are doing it in other areas of the healthcare industry as well. We're thinking about it when it comes to bias at the point of care, understanding diversity, equity, and inclusion. When we take more systems approach, we are able to advance these hugely intractable seemingly impossible challenges.

Rae Woods:
So we need to start with education. We need to get our hands around the problem and around the data. Let me ask the opposite kind of question. What do you want to be at the bottom of leaders to do list?

Miles Cottier:
I say the number one thing to not do is make this individual people responsibility, right? So we don't want to just shove this onto our staff members and say, "Be green. It's the best thing for everyone." If you do that, you're going to make the problem worse. You can gamify it sure to engage staff, but that has to be done in conjunction with top down, large scale changes from these strategic level. Think of it like the plastic straw marketing campaign that 10 years ago was a huge thing...

Rae Woods:
Yeah.

Miles Cottier:
... That all came from a picture of a turtle, I think it was with a straw, unfortunately through its nose and that tore everyone's heartstrings, but actually plastic straws are only a tiny percentage of the waste that we find in the oceans. If you've seen Seaspiracy, you'll know, 80% of the waste comes from organizations so incumbent organizations or nations that have been around for years that are polluting the oceans much worse than our plastic straws. Think of it in the same way. The change has to be at the top down level.

Rae Woods:
Well Miles, when it comes to climate change, what is the biggest takeaway or action item that you have for our listeners?

Miles Cottier:
I would say gain self-awareness. Everyone needs to take ownership, regardless of what you do or where you are in the world and that starts from educating yourself. Now, you can begin to change your organizations collective mindset, once you do that, and that's going to allow you to actually knowingly and comfortably make decisions that are going to help. As I said, it's not that hard to find solutions. The hard thing is getting your organization to the point where every single stakeholder is on board and engaged with the environmentally sound direction of your business. It's the hardest thing to do, but it's the most important thing to do.

Rae Woods:
Yeah. I couldn't agree more. Well, thanks for coming on Radio Advisory.

Miles Cottier:
Thanks for having me. It's been great.

Rae Woods:
Miles said it perfectly. Step one is to educate yourself. So we've added some links to the show notes. You can learn more about how climate change is impacting your bottom line and what kinds of questions you need to be asking next. Because remember, as always, we are here to help.