Jason Scheidler, CFO of Medxcel
Jason Scheidler, CFO of Medxcel

At the decarb:Healthcare “Show me the money” workshop, Jason Scheidler, CFO of Medxcel, mentioned the concept of doing 'quick win' energy/carbon projects with up to 60% payback that build momentum and establish trust in an organization. The audience was intrigued. So, members of the decarb:Healthcare team (Troy Savage, Jim Crabb, Austin Barolin, and Charlie Ruschke) followed up with Jason to learn more.

The following is a transcript of our follow-up interview with Jason Scheidler on strategies for identifying and implementing 'quick win' projects. Some of the questions and answers have been edited for brevity and clarity.

At the workshop, you mentioned that there are energy/carbon projects that have up to a 60% return that can be accomplished right away and can start to build trust and momentum within their organizations. What are those projects? How do you engage them and how do we help other people make that happen?

JASON: I think that's a great question and one that probably doesn't have a standard answer for everyone. Although, there are some strategic directions one can take based on the organization and its footprint, to help get you started.

What we did was very simple MEP (mechanical, electrical, plumbing) and energy assessments at some of the larger institutions that we knew had long-lived assets and were strategic in nature.  We then asked: does this asset have a master plan associated with it? We want to ensure that we're not doing work on something where the facility use changes significantly and you have to do it again.  We then go into those facilities and look for those “low-hanging fruit” that help build some momentum to get started.

One Example is LED lighting retrofits. I don't think that's anything new for the industry, but there are still quite a few institutions out there that have not jumped on board. There's a lot more involved in LED lighting retrofits to include both internal and external fixtures.   Even if you just change the core fixtures and not the architectural fixture replacements, which typically don't have the return but are used for a consistency of look throughout the facility.

These projects not only produced savings in electricity but also associated MRO (material requisition orders) spend like light bulbs, fixtures parts, ballasts--things that go wrong with non-LED units, and you have thousands of these items in a hospital. The LEDs have less maintenance effects and you need less of them to light an area. We also saw improvement to parking lot safety. We take before and after pictures of parking lots and the side-by-side visual results are remarkable, especially since a lot of the nursing and hospital staff park in the back of the lots and they leave those front spots open for the patients and emergency access. So, the lighting retrofit not only gives you a little bit of savings out there, but there's a huge win with employee satisfaction and safety.

 

What other quick wins did you identify?

JASON: Some of the other quick wins with savings we're doing are steam blankets, especially in the older facilities. Again, this is nothing new to the industry, but I think we lose track of how much savings and energy efficiencies we get with setting steam traps in the right areas.

Also, the tuning of the central plant--things just get out of whack every now and then.. Getting everything back in line, in sync and putting some proper gauges and data tracking on it for our teams to know when things are spinning out of control--that's a quick win. 

Recently, one of the new things we've had the ability to do is magnehelic strips. Like I said earlier, not new technology, but utilizing these for filters so you can gauge pressure and see when the filters actually need changed rather than just having it on a rotation definitely makes an impact. Prior to using this technology we had a standard inspection of filters which took time and also a replacement schedule for filters. We’ve found huge savings by actually having sensors behind it. This gave us a much more accurate tracking mechanism that said, “hey, now's the time to replace that filter,” so you eliminate some of your visual inspection and actually extend the life of that filter. The key is getting the data analytics from those strips and not having it be costly.

Some things we have discovered is that you need a lot of that data in some type of real time monitoring, but you need it inexpensively. You can't have expensive interfaces or expensive systems otherwise you won't make the business case. 

 

So if we're trying to simplify all this for other people is this the recipe, because it sounds like you're saying, hey, these are the specific projects that we did, but we really had a system to make progress--(1) look at where you are with master planning, and (2) then have a sense of what the core assets of your organization are, (3) focus where you know the master plan and where the core assets are. Is that right?

It also seems like there’s sometimes a silo between energy and operations that is changing how people think about the impact of projects. Is that right?

JASON: Yeah, I think, high level, you hit on a couple of key factors there. 

Our energy teams are now deeply embedded inside of our operations. A lot of times the energy team might fall into finance for contract handling, bill pay and negotiations, but we really have them aligned to leverage our PDC (Planning, Design and Construction) teams, and then our operations teams. This way our processes include an energy review for all items. And, so, we take our master facility plans and do a couple of different things—(1) three year capital plans of all major infrastructure equipment. (2) We then have our master planning for the campus and, as you may recall, we have now incorporated that energy team as a review of any of the major components - you can't do it on everything, but we do it whenever we can. That’s because we're trying to catch it on new dollars spent so we don't go back and re-spend the dollars after something's built. And, (3) we're trying to also track energy opportunities --how are we doing with savings from our current conditions? No one has the capital to replace all the equipment with new or greater stuff that's efficient. So you create programs around, okay, this asset is here for another 10-15 years, what can we do to help it out, and how can we make it more efficient?

Those are the approaches we have taken, and we found that our processes work much better when you pull all those activities together and you have the same group doing it, Operations and Energy.

 

So, in terms of the projects that you identified for example the LED light retrofitting, how are you quantifying the operations savings?

We're just trying to imagine, for less sophisticated organizations (consider those with preventative maintenance systems from the 1930s and don’t have the necessary analytics let alone the knowledge to use them), what advice do you have for those organizations who might have difficultly quantifying the operations and maintenance savings that makes some of these 'quick win' projects really powerful?

JASON: I'm a big believer in CMMS (Computerized Maintenance Management Systems), because you can get the data and the turn of the products, so it helps you quantify our spend by category.  Trust me - no one likes to put the upfront investment into the CMMS. We go into many hospitals and investigate: Are you over inventorying or are you under inventorying your assets? Do you really need all these processes on handheld devices for your CMMS? It comes with a lot of training, but after you get over that initial hump and that initial investment, the downstream impact goes into everything. It’s like the backbone and lifeline if you want to do these things very well.

 

So if we tried to identify a “Jason principle”, it would be: adopt and use analytics, not for analytics sake, but as a tool to help make better decisions across the board including energy.

JASON: Yes.

 

Any other 'Jason principles' we missed?

JASON: I really don't like replacing “like for like” with building automation systems. 

We need to start getting out of this proprietary system, always having these heavy systems to control and manage everything. There is a need for it on a lot of the critical infrastructure assets, but we have to get more efficient and cost effective. I had too many projects come through, $3, $5,  $7 million dollars on building automation system replacements, and it's very hard to make any return on investment (ROI) whenever the tools  you need to get there are so “heavy”. How do you make new ways of upgrading things, without overburdening capital projects? Those are the things that we really need to start looking at as an industry.

 

Jason, we would love to just give you a last word, so if you were speaking to a group or a healthcare facility and you had one minute to explain to them how they might, get started on doing energy projects that save a lot and build trust, what would you tell them in that in that minute?

JASON: You don't have to go at it alone! There's a pride of ownership in healthcare facilities and doing things ourselves is part of our culture and that’s fantastic. It's what keeps these buildings going. But this is not an area that you should need to go on your own.  Whether it's a partner, a vendor, networks, etc. I think with this decarb:Healthcare group, what I have enjoyed most about it is  bringing a lot of different people together and showing that we can actually do more in a group setting if we are willing to open up and ask questions or share vulnerabilities about what we do know and what we don't. But we need to be willing to engage in the conversation, right? There's no wrong answer. I think if we try to do it in isolation, it's going to cost more money and we're not going to get the same results. We're also not going to be able to share across the industry what we all need to get done to actually have an impact.

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NOW, IT'S YOUR TURN TO SHARE: What's your experience with 'quick win' energy projects? How have you experienced success? Roadblocks? And, beyond technical results, how are you building trust in your organization?