Find episode transcript below.
JENNY COLAPIETRO:
00:00:00:00 Welcome to PwC’s Next in Health podcast. I'm Jenny Colapietro, PwC’s Consulting Commercial Leader. And I'm joined here with Mackenzie Heal, our U.S. healthcare sustainability Lead and a Partner in our Health Transformation practice, as well as Staci Gitkin, a Director in our Health Transformation team and our U.S. Healthcare Sustainability Lead Director. Mackenzie, Staci, welcome to the podcast.
MACKENZIE HEAL:
00:00:31:23 Thank you for having us, Jenny.
STACI GITKIN:
00:00:33:08 Thank you. Happy to be here.
JENNY COLAPIETRO:
00:00:35:00 Great. Well, today we're discussing the results of the inaugural U.S. Healthcare Climate Survey. This is a comprehensive survey that is aimed to understand how healthcare organizations are prioritizing climate-related strategies and actions in response to the growing impacts of climate transition.
00:00:52:03 The survey gathered insights from over 200 healthcare executives across various sections, including health plans, providers, pharmaceutical and biotech, as well as med-tech.
00:01:04:29 The goal was to uncover how these industry leaders are navigating the complex challenges posed by climate change and its profound effects on human health. So, Mackenzie, to start us off, can you provide a brief overview of the US Healthcare Climate Survey? What prompted PWC to conduct this survey and what were the main objectives?
MACKENZIE HEAL:
00:01:24:07 Absolutely. To start, we recognize that businesses are facing pressure to transform their operations and that sustainability plays a key part in that transformation. So, we started by looking at climate and sustainability, not in a silo, but as part of megatrends that are impacting our societies and changing the ecosystems through which we all live in. These megatrends include climate transition, technological disruption, demographic shifts, fracturing worlds, and social instability.
00:01:52:12 These megatrends are influencing how we power, feed, move, build, care, and make within the healthcare ecosystem, necessitating strategic responses from organizations to adapt and thrive in an evolving landscape. Then, as we are seeing, there are many direct impacts of climate-related events on human health, such as air pollution from wildfires that can exacerbate breathing disorders.
00:02:16:07 And we've also, unfortunately, seen a number of deaths due to heatwaves. With these events impacting our most vulnerable populations, pairing that with the fact that healthcare organizations contribute about 8.5% of greenhouse gas emissions in the US, and you can start to see how human health is increasingly impacted.
00:02:35:03 However, despite this mounting evidence of the impacts of climate on human health and our healthcare ecosystem, we still not clear as to whether or not healthcare organizations are taking action and where this sat on their strategic agenda.
00:02:48:22 So, we released the survey to understand how they were prioritizing climate and sustainability, the impacts they believe it will have on their communities and their business, the actions they are taking, and the challenges they are facing as they begin on their sustainability journey.
JENNY COLAPIETRO:
00:03:05:01 That's great! Would be good to better understand how they're prioritizing climate and sustainability. Staci, can you share some of the key findings from the survey and what stood out to you, especially considering the lag in the healthcare sector's response to climate impacts?
STACI GITKIN:
00:03:20:15 Yeah, absolutely. So, one of the most striking findings was that 99% of respondents indicated that climate strategy was a high or top priority for their organization within the next few years. We were excited to see that number was so high, given that we weren't exactly sure where they were headed. We saw that pharma companies were actually the ones that were most likely to indicate that climate was core to their strategy…
00:03:43:09 with 60% indicating as such. We wanted to understand where and how they were making it a priority. So, we took a deeper look across planning elements. So, things like strategic planning, financial planning, vendor management, and supply chain, product development, and others, and found that 76% are incorporating climate into at least one of these areas. We also found that executives believe that climate will have an impact on human health.
00:04:10:28 With the increase in stress on providers and caregivers, the increase in acute and chronic illnesses, and an increased focus on long-term outcomes to reduce inequities across communities were the areas with the biggest impacts. In an already stressed and resource-constrained environment, climate is another contributing factor to exacerbate stress, burnout, disruptions in care and more.
00:04:33:08 Which is expected to have an impact on those who are taking care of others both in a clinical and non-clinical setting. Climate also exacerbates health inequities and places additional strain on healthcare systems. In order to maintain the quality and continuity of care that exists today, healthcare organizations need to recognize these impacts.
00:04:53:00 This will not only support their environmental and climate goals but also align to the mission that most players in this space have to improve health outcomes and community well-being.
MACKENZIE HEAL:
00:05:04:03 Thanks, Staci. Just to jump in, despite the recognition of these impacts on patients and caregivers, we saw that there was a disconnect in the action’s healthcare organizations are taking. Most efforts are focused on decarbonization, sustainable resources, supply chain practices, and reporting.
00:05:20:08 80% of organizations are implementing initiatives to reduce their carbon footprint, and 78% are identifying ways to better manage sustainable resources such as solar energy and waste management. While these actions will have an impact in the long run and should be continued, they may not fully address the broader health impacts anticipated.
00:05:41:07 And as I said, are long term in nature. This creates an opportunity for healthcare organizations to shift the tone beyond these efforts alone. To also focus on more immediate human health and wellbeing needs to support their local communities in the near term.
JENNY COLAPIETRO:
00:05:56:23 That's certainly interesting that despite the recognition of the impacts, there's a disconnect in the actions. But given the diverse nature of the healthcare industry, can you elaborate more on the differences observed in each sector regarding their climate strategies and actions, and what were the overall impacts on human health?
STACI GITKIN:
00:06:15:16 So, our survey revealed some interesting differences and how each sector is approaching their climate strategies. We found that these differences are largely influenced by their position in the healthcare value chain and their specific operational needs. So specifically, health plans and managed care organizations are particularly focused on the financial implications of climate-related events. Specifically, 75% of respondents indicated that the impact of the total cost of care is a significant driver of their climate strategy.
00:06:47:00 Many of these organizations are concerned with how extreme weather events, such as hurricanes and floods, can lead to increased healthcare utilization due to injuries, acute illnesses, and exacerbation of chronic conditions. Their strategies are geared towards mitigating these financial risks and ensuring the sustainability of their services. Pharma and med-tech companies had similar goals, with both sectors indicating they were more likely to focus their two-year strategy on incorporating sustainable resources.
00:07:15:19 Specifically, 92% of pharmaceutical companies and 69% of med-tech companies indicated this to be a top or high priority. Their operations depend heavily on a consistent and reliable supply of raw materials and resources. So, ensuring the sustainability of these resources is crucial for maintaining their production processes and supply teams.
00:07:37:03 By prioritizing sustainable resources, these companies can aim to reduce their environmental footprint, secure long-term access to essential materials, and mitigate risks associated with resource security and regulatory pressures. This helps them comply with their environmental regulations, enhance their corporate social responsibility profiles, meet the growing demand from stakeholders for sustainable practices, and drive cost savings.
00:08:05:00 Providers would include hospitals and integrated delivery networks have their primary strategic focus on the use of sustainable supply chain practices, with 86% indicating this is a high or top priority. Their focus on sustainable supply chain is due to the fact that it directly impacts their ability to deliver quality care, while managing costs and environmental impact, like pharma and med-tech.
00:08:31:00 Sustainable supply chain practices help providers ensure a reliable and efficient flow of medical supplies and equipment, which is crucial for maintaining uninterrupted patient care. By adopting sustainable supply chain strategies, providers can reduce waste, lower greenhouse gas emissions, create cost savings and improve operational quality.
MACKENZIE HEAL:
00:08:52:12 Great! So, while you can see that organizations’ focuses differ based on their place in the value chain, it also creates an opportunity to allow each sector to not only tackle their piece of the puzzle but to collectively come together to break silos to support the ecosystem all together.
00:09:08:03 One of the key observations from our survey is the recognition across all sectors of the need to collaborate with stakeholders both upstream and downstream, which is essential for creating an efficient, cost-effective, and sustainable healthcare ecosystem.
JENNY COLAPIETRO:
00:09:22:00 Okay, so we've talked about the strategies and actions that healthcare organizations are taking. But what are some of the key challenges they face in implementing these climate strategies?
STACI GITKIN:
00:09:33:07 So, we understand there are a number of competing priorities within the organization. And in some cases, this causes trade-offs which can create barriers or risks to achieving climate goals. One of the areas that we commonly see is that there can be a trade-off at times between healthy outcomes, sustainability, and operational goals. So, it can be challenging when these objectives are not always aligned, which can cause friction in trying to determine where and how to spend an organization's resources, time, spend, and effort.
00:10:01:08 Thinking about that trade-off and having the right pieces in place is really important, and a challenge that we often see these organizations face. We also did ask our survey respondents where their biggest challenges lie in implementing their climate strategy, which included areas like funding, meeting regulatory requirements, and access to the right data, but to all add complexity in achieving climate goals and objectives.
JENNY COLAPIETRO:
00:10:23:25 And Staci, given the various strategies and challenges that we've discussed, what are the next steps that healthcare organizations should take to effectively address climate transition and its impacts on human health?
STACI GITKIN:
00:10:34:26 Yeah, absolutely. So, as we said previously, one of the most important next steps is fostering collaboration across the healthcare ecosystem. Healthcare organizations should work closely with upstream and downstream partners to break silos and create a more cohesive and sustainable ecosystem. So, to bring that to life a little bit with an example, providers can collaborate with suppliers to source eco-friendly products and health plans can partner with community organizations to improve health outcomes related to climate impacts.
00:11:05:16 Organizations should also adopt a holistic approach to planning that considers broader challenges, such as social instability and demographic shifts. This ensures that climate strategies are aligned with other critical issues impacting the organization, stakeholders, and the communities that they serve.
00:11:22:03 Healthcare organizations also need to manage the expectations of key stakeholders, including regulatory bodies, customers, employees, and patients. This involves navigating regulatory pressures, compliance needs, operational requirements, and health outcomes while maintaining business continuity and growth.
00:11:40:11 Anticipating and preparing for the unknown is vital. Regulatory and stakeholder pressures are constant, but uncertainty is also increasing. So, developing a flexible and adaptive strategy can help organizations respond effectively to these unforeseen challenges. So, this includes building resilience into operations, investing in innovative technologies, and staying informed about emerging trends and regulations.
00:12:03:04 Healthcare organizations should also be intentional and targeted in their climate strategies. This means setting clear goals, prioritizing actions, and focusing on areas where the organization can make the most significant impact. Avoiding common obstacles involves being proactive and identifying potential barriers and developing strategies to address them.
00:12:23:05 And lastly here, like we said before, each sector within the healthcare ecosystem has their own unique considerations and role. So, for health plans, making sure to manage the impact of climate-related events and the total cost of care, providers focusing on sustainable supply chain practices to make sure that we're optimizing quality care and managing costs and pharma and med-tech, making sure to invest in sustainable resources and supply chain optimization.
MACKENZIE HEAL:
00:12:50:20 So, in conclusion, healthcare organizations play a critical role in mitigating the negative effects climate transition may have on human health and a pivotal role in contributing to a sustainable future. While it’s admirable that healthcare organizations are prioritizing climate in their planning activities, the industry is still in its early stages of maturity, with many organizations indicating they are just now beginning to think about this.
00:13:14:27 There is a significant opportunity, both individually and through business relationships, to come together and contribute to a healthier and cleaner world. To do so, organizations should think beyond decarbonization and reporting, and look at the physical and clinical impacts of climate on the local communities. While this may sound daunting, these challenges also present opportunities to transform for the better, drive value creation, and build resilience for the future.
JENNY COLAPIETRO:
00:13:40:23 I hear you. Healthcare organizations do, in fact, play a critical role in mitigating the effects of climate transition, and these have been great insights into where healthcare companies are focused, potential challenges, and next steps. We invite our listeners to read the US Healthcare Climate Survey report linked in the show notes. But Mackenzie, Staci, I want to thank you so much for sharing all these insights with us today.
MACKENZIE HEAL:
00:14:04:12 Thank you.
STACI GITKIN:
00:14:05:09 Thanks for having us.
JENNY COLAPIETRO:
00:14:07:00 For more on these topics and other health industry insights driven by policy, innovation, and care delivery changes, please subscribe to our podcast at pwc.com/US/Next in Health podcast. Until next time, this has been Next in Health.
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