HHS’s Failed Attempt to Regulate Healthcare’s Greenhouse Gas Emissions
It's official, under the Biden administration the US Department of Health and Human Services will have done nothing to reduce the US healthcare industry's massive carbon footprint.
(As I argued in 3 Quarks Daily this past August 1st, HHS’ refusal to address healthcare’s GHG emissions arguably constitutes the greatest ongoing global healthcare policy failure. Nevertheless, over the past eight weeks this essay was rejected by three national newspapers, Health Affairs, The Lancet, NEJM Catalyst, Nature Climate Change, three Ivy League climate blogs, and others. Below is the full text. (The 3 Quarks writing is at: https://3quarksdaily.com/3quarksdaily/2024/08/the-us-department-of-health-and-human-services-ongoing-failure-to-address-the-greatest-threat-to-human-health.html.)
With little notice and even less attention the US Department of Health and Human Services (HHS) published in late August the federal government’s first ever regulatory rule intended to reduce the US healthcare industry’s massive carbon footprint.
Federal regulation of healthcare’s greenhouse gases (GHG) has untold significance for several reasons. HHS is in effect the world’s most powerful healthcare policy-making entity responsible for regulating nearly a $5 trillion market that accounts for approximately half of annual global healthcare spending. US healthcare, the largest industry in the world’s largest economy, remains on balance uncommitted to decarbonizing. Significantly due to infamous inefficiency and waste, in 2018 healthcare was accountable for an estimated 554 million metric tons of annual GHG emissions, or roughly 9% of total US emissions, that is accompanied by a social cost of upwards of $3 trillion. If it was its own nation, US healthcare would easily rank within the top 10% of carbon polluting countries. HHS’s Medicare seniors and Medicaid children are forced to pay the greatest climate penalty, ironically those whose health and wellbeing the department is budgeted nearly $2 trillion annually to protect.
Promulgated by HHS’s Centers for Medicare and Medicaid Services (CMS) and termed the “Decarbonization and Resilience Initiative,” the rule will allow roughly 700 hospitals selected to participate in a five-year Medicare payment demonstration beginning in 2026 to voluntarily report hospital building and purchased electricity GHG emissions along with anesthetic gas and transportation emissions largely via the EPA’s Energy Star program. Volunteering hospitals will also answer eight sustainability planning questions.
CMS will in turn provide hospitals with yet-to-be-specified technical assistance concerning GHG emissions measurement and approaches to deliver less carbon-intensive care. For those participating CMS will post a “hospital recognition badge” on the agency’s website. In sum, CMS justifies the rule by simply stating, “establishing a baseline understanding of GHG emissions . . . is a necessary first step to lowering emissions.”
Immediately upon taking office the Biden administration published an executive order pledging to take a “government-wide approach” to “tackling the climate crisis.” Eight months later HHS Secretary Xavier Becerra promised to use “every tool in the toolbox at our disposal to address the climate crisis.”
The immediate question begged therefore is why did HHS wait four years to finalize a voluntary rule that both requires and promises nothing. “The proposed decarbonization initiative,” CMS states, “could [emphasis added] directly lead to lower emissions.”
In unpacking the rule, GHGs identified constitute just 20% of total hospital emissions. HHS excludes supply chain emissions that account for over 80%. There already exists a “baseline understanding.” Energy Star currently calculates energy use intensity for over 3,000 hospitals by Core Based Statistical Areas (CBSAs) – the same metric CMS is using to select demonstration hospitals. All one likely needs to know however is that over the past ten years just 37 hospitals on average, or approximately 0.5% of all US hospitals, were Energy Star certified for energy efficiency. This number is made more trivial by the fact Energy Star currently excludes supply chain emissions. Though hospitals will be participating in a Medicare demonstration that financially incents performance improvement, CMS will not consider emission reductions in calculating financial rewards - despite the fact Medicare has for years programmatically incented hospitals for improving care quality and patient experience.
That the rule is again voluntary may cause one to question HHS’s motives. First, it’s oxymoronic. Here, CMS reinvents the definition of a regulatory rule defined by the 1946 Administrative Procedures Act as a “requirement.” In practice, voluntary reporting by a small number of hospitals creates selection bias making it unlikely HHS can legitimately draw generalizable conclusions. Moreover, to expect hospitals to voluntarily report is disingenuous since the healthcare industry has long resisted doing so. The reporting incentives CMS offers are largely meaningless because the EPA along with the Department of Energy are expert in identifying emission-reducing technology and solutions and partnering with industries to implement.
What renders the rule ultimately futile is CMS’ decision not to audit or verify reported emissions data. Like HHS’s 2022 climate pledge program, the rule amounts to green washing or virtue signaling. It also directly conflicts with the US Security and Exchange Commission’s climate disclosure rule finalized this past spring that does require publicly-traded hospitals to attest GHG emissions are verified.
This year will likely surpass 2023 as the warmest on record. Limiting global warming to 1.5°C is now thought impossible. The growth in natural gas and coal-fired electricity generation still exceeds solar and wind. The climate provisions in the 2022 Inflation Reduction Act will have no effect on decreasing petroleum demand and despite President Biden’s 2021 pledge and his recent comments at the United Nations, the US is not on course to reduce GHG emissions by 50% below 2005 levels. Nevertheless, the federal government’s choice to mitigate the healthcare industry’s massive carbon footprint by conducting a voluntary study will only demonstrate HHS’s disregard for planetary health.