By Lisa Dittmar, Manager, Deloitte Consulting

Healthcare organisations face an exciting but uncertain future. In the face of the COVID-19 recovery, future health crises, the climate crisis, shifting models of care and increased digitalisation, generations of leaders will need to battle increasing levels of complexity alongside continuing uncertainty and make decisions quickly with incomplete information. Ultimately, however, they have less than 30 years to develop a net zero healthcare system that operates within a net zero economy. While this is daunting it’s also exciting and, if achieved, the future will be bright.

Last December’s report from our Centre for Health Solutions, Predicting the future of healthcare and life sciences in 2025: Healthcare and life sciences companies have prioritised decarbonisation, highlighted some of the mitigation strategies organisations are currently taking to reduce their carbon footprint.¹ Around the same time the NHS announced its ambition to be world’s first carbon net zero national healthcare system by 2040.² This week’s blog by Lisa Dittmar, from our Net Zero Transformation team, discusses the ‘muddy road to a net zero health system’ and the choices to be made along the way.

What a future net zero healthcare system might look like

Though the details may differ the evidence we are seeing today helps us to imagine some of what a net zero healthcare system might look like in 2040. For example:

• healthcare providers will occupy state-of-the-art buildings that are net zero to build and run, with buildings that use zero-waste operations and technology that speeds up triage, reduce the number of visits needed, and helps doctors and nurses diagnose faster
• the goods and services purchased will be net zero, as will the companies that supply them
• preventative healthcare will reduce the treatment burden due to a combination of person-centric approaches to public health and related services, the continued integration of tech and health, as well as a regeneration of the earth’s ecosystems
• we will also have adapted to a changing climate, which means we will be better prepared to manage more people suffering heat related conditions, injuries from natural disasters, increase in infectious diseases, and other climate-related illnesses.

The current net zero landscape

It’s also clear that the health system is on the precipice of transformational change. Health is both part of the problem and part of the solution. The healthcare industry accounts for as much as 4.4 per cent of carbon emissions globally, which is almost double that of the pre-pandemic aviation industry.³ Drug manufacturers alone create 13 per cent more carbon emissions than car manufacturers, despite having a 28 per cent smaller market.⁴

Healthcare isn’t starting its journey to net zero from a standing start, but it is on the verge of a transformational change. In a previous blog, reflecting on a webinar Deloitte hosted with Reuters, we explored pharma’s involvement with the ESG (environmental, social, and governance) agenda. Panellists noted that the industry has been engaged in the social aspect of ESG agendas for some time, and although levels of maturity varies across companies, many are becoming increasingly ambitious in their environmental commitments. Indeed, over the past year, there have been a spate of new announcements from leading pharma companies announcing increasingly ambitious environmental targets, particularly for carbon reduction. Investor pressure, though not as headline-grabbing as those in the oil and gas industry, is also a factor for healthcare industry suppliers.

From a policy perspective, both the wider government and the NHS in the past year have increased their ambition on setting and achieving net zero targets (including interim targets), which is increasing the ‘customer’ and policy pressure to change.^5,6

The complex path to the future net zero healthcare system

The climate, the healthcare system, and the organisations that support and supply it are all complex systems. One decision to decarbonise may have unintended and sometimes negative impacts on other planetary systems (such as water or biodiversity), patient care, modern slavery in the supply chain, or commercial consequences.

Equally, there is just not enough time before we reach irreversible tipping points to spend years researching, analysing, and planning before we take action. The longer we wait to act, the bumpier the transition will be, and the more pressure there will be to treat patients suffering the effects of climate change whilst also undertaking the herculean task of decarbonising. The challenge is to imagine how we’ll get there.

There will be multiple decisions required every day by people across the entire system that will impact decarbonisation: what is prescribed, used, and purchased. For leaders, there will be tensions at a strategic level in changing the system holistically, particularly when confronted with the real logistical challenges of delivering high quality care in an environment of increasing complexity due to repeated health crises.

For operational decision-makers across the organisation, they will find that there is tension between what might be better for the environment vs what might (or appear to) be better for infection prevention, patient care, or other factors in that particular scenario. For example, healthcare professionals may find they have tension between what might be lowest risk for them or their patient compared to what might be better for the long-term impact on the system as a whole. Moreover, there is often not enough information readily available to make a climate-positive decision in the moment, which can mean risks for unintended consequences as well as duplication of effort from decisions made quickly in a silo having wider negative impacts on the hospital or system as a whole.

There are trade-offs between climate-friendly choices, perceived quality, perceived risk, finances, cultural shifts, as well as the friction from doing something new or different. As we’ve seen with renewable energy costs dropping remarkably in the last decade, over time these trade-offs will shift and the decision matrices will change.

The actions organisations should consider to ensure delivery of their climate goals

Decision-makers across all organisations need to be able to take the most impactful climate-positive actions with the fewest unintended consequences. The actions can be grouped under three areas, strategy, technology and people:

Strategy: Developing a sustainability strategy that is aligned with (or even better integrated into) the overall organisational strategy will reduce some of the tensions in decision-making and the time it takes to make them. Having a ‘guiding star’ which individuals can follow with confidence will improve the coordination of effort across functional areas. Establishing robust governance structures within the organisation to facilitate coordination and sharing of good practice will also speed up the decision-making. Healthcare organisations are complex systems with many stakeholders, so implementing a cross-functional support system around climate action can help surface risks and opportunities more quickly.

Technology: Technology and the data generated are already making some of these challenging decisions easier. For example, digital twin technology can map an organisation and run simulations across many scenarios prior to making the relevant physical changes. Any unintended consequences identified from physical changes can then be used to train future models. However, technology will not be able to remove the risks from decision-making entirely. People will still need to make decisions quickly with imperfect information in a deeply uncertain world.

People: Across most organisations, general climate knowledge is low and popular perception of issues can be divorced from their materiality. While leaders who actively champion sustainability goals can help drive progress, increasing general climate knowledge across the organisation will help people make better choices every day. For example, training in the circular economy can help people understand which category of decisions are better, such as it’s better to reduce overall usage rather than relying on recycling. Another example is using behavioural nudging techniques to make it easiest for people to adopt low-carbon initiatives, such as the configuration of dispensers to allow fewer items to be removed at once, or making the reusable item easier to reach than the single-use option.⁸

Concluding Thoughts

The path to a net zero healthcare system will be muddy and imperfect. While there are guiding frameworks, each organisation’s journey will look different. Initiatives that we implement as good practice today will be improved upon and overtaken by better practice tomorrow. Technology will continually reshape the landscape in which we operate and the opportunities to which we have access. Decision-makers can take heart that everyone is learning by doing and that we truly are all in this together.

Lisa Dittmar - Manager, Deloitte Consulting

Lisa is part of Deloitte’s Net Zero Transformation team within Monitor Deloitte. She supports healthcare and life sciences clients on their transition to net zero, focusing on the confluence of strategy and digital.

Email | LinkedIn

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¹ deloitte-uk-life-sciences-healthcare-predictions-healthcare-and-life-sciences-companies-have-prioritised-decarbonisation.pdf
² NHS England » NHS becomes the world’s first national health system to commit to become ‘carbon net zero’, backed by clear deliverables and milestones
³ HealthCaresClimateFootprint_findings.pdf (noharm-global.org)
⁴ https://www.southpole.com/sustainability-solutions/healthcare
⁵ UK enshrines new target in law to slash emissions by 78% by 2035 - GOV.UK (www.gov.uk)
⁶ delivering-a-net-zero-national-health-service.pdf (england.nhs.uk)
⁷ Ellen Macarthur Foundation: What is the circular economy
⁸ Nudge theory - Wikipedia