MHA 560 Week 4 Economic Analysis of Sustainability Practices Example

Reviewed by Lenora Whitcombe, MSN, RN · University of Phoenix · Updated

This MHA 560 Week 4 example applies economic analysis to sustainability practice in a health care organization, evaluating four operating room projects at a composite Milwaukee safety-net hospital whose operating margin averages about 1%. University of Phoenix MHA 560 includes economic analysis and sustainability practice within organizations among its core topics, and in week four MHA/560 health administration students generally estimate costs, savings and wider benefits of sustainability initiatives and recommend which to pursue. The APA 7 paper examines phasing out desflurane, lowering fresh gas flows, setting back operating room ventilation overnight and switching to reusable gowns and basins. Desflurane's life cycle greenhouse gas impact is 15 times that of isoflurane and 20 times that of sevoflurane per hour of anesthesia. Surgical suites are among the most energy-hungry spaces in any hospital. Payback periods, net present value and health co-benefits guide the ranking.

CourseMHA 560 Creating a Sustainable Legacy: Healthy Communities (MHA/560)
Week4
Paper typeSustainability economic analysis paper
Lengthabout 1,162 words, 4 double-spaced pages plus title page and references
FormatAPA 7 student paper
SchoolUniversity of Phoenix
ProgramMHA
UpdatedSeptember 2026

Free sample paper for MHA 560 Week 4

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Greener and Cheaper? An Economic Analysis of Four Operating Room Sustainability Projects at a Safety-Net Hospital With a 1% Margin

[Student Name]

University of Phoenix

MHA/560: Creating a Sustainable Legacy: Healthy Communities

Week 4 Assignment

[Instructor Name]

[Date]

The hospital, its operating rooms, project costs and savings are composites written for a model paper; research findings come from the sources cited.

What this part is doingThe title asks a question the chief financial officer would ask, because the analysis must persuade finance, not only environmentalists.
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When the sustainability working group at the composite Milwaukee safety-net hospital presented a list of operating room projects, the finance chief raised a reasonable objection: with an operating margin of about 1%, can we afford to be green? The chief executive asked the working group to answer with an economic analysis. This paper presents it.

The Environmental Stakes

Health care's environmental footprint is large. An analysis using national health expenditures estimated that in 2013 the US health care sector was responsible for about 10% of national greenhouse gas emissions and 9% to 12% of several other air pollution impacts, and that the resulting health damage was comparable in scale to deaths from preventable medical errors (Eckelman & Sherman, 2016).

Why the Operating Rooms

The operating rooms were the obvious place to start. The carbon accounting of surgical suites described in the first paper applies directly here: gases used for anesthesia and the power needed to heat, cool and ventilate surgical suites dominate the footprint, and one hospital's habit of reaching for desflurane multiplied its anesthetic emissions roughly tenfold compared with peers (MacNeill et al., 2017).

What this part is doingStarting with the largest sources follows the evidence rather than the most visible projects, such as recycling bins.
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The Anesthetic Gases

The hospital's anesthesiologists used desflurane in about a third of general anesthetics. A life cycle analysis found that desflurane had the largest greenhouse gas impact of common anesthetic drugs, 15 times that of isoflurane and 20 times that of sevoflurane per hour of anesthesia, and that impacts for all inhaled agents were dominated by waste gas released to the atmosphere; the authors recommended restricting desflurane to cases where it might reduce harm and avoiding unnecessarily high fresh gas flows (Sherman et al., 2012). The choice of one gas made the largest difference in the operating rooms' climate impact.

The Method

The working group used two measures for each project: a simple payback period, dividing one-time costs by annual net savings, and a five-year net present value at a 5% discount rate, capturing the timing of savings. Assumptions were stated for each estimate, and environmental benefits were estimated but not converted to dollars.

Project One: Phasing Out Desflurane

Removing desflurane from the formulary, except by request for specific clinical reasons, requires anesthesiologist education and removal of vaporizers. One-time cost: about $12,000 for education and equipment changes. Desflurane costs more per hour than sevoflurane at the hospital's contract prices, so annual drug savings are estimated at $68,000. Payback: about two months. Five-year net present value: about $282,000.

Project Two: Lower Fresh Gas Flows

Teaching and monitoring low fresh gas flow techniques for all inhaled agents reduces the amount of agent used. One-time cost: about $8,000 for education and dashboard reports from anesthesia machines. Annual savings: about $41,000 in agent costs. Payback: under three months. Five-year net present value: about $170,000.

Project Three: Overnight Ventilation Setback

Six of the eight operating rooms sit empty most nights, but ventilation runs at full rates around the clock. Occupancy-based setback reduces air changes when rooms are unoccupied and restores them before use, within infection control standards. One-time cost: about $180,000 for controls, sensors and commissioning. Annual energy savings: about $62,000. Payback: about three years. Five-year net present value: about $88,000.

Project Four: Reusable Gowns and Basins

Switching from disposable to reusable surgical gowns and basins requires a laundering and sterilization contract and new inventory. One-time cost: about $95,000 for initial inventory and storage changes. Annual net savings after laundering costs: about $24,000, plus lower waste disposal costs. Payback: about four years. Five-year net present value: about $9,000.

What this part is doingShowing a project with a modest financial return keeps the analysis honest about where sustainability pays and where it mostly costs.
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Where the Estimates Came From

Drug savings used the hospital's contract prices and a year of anesthesia records showing hours of each agent. Energy savings came from the facilities team's metering of operating room air handlers and a utility rebate estimate. Textile costs came from quotes from two laundry vendors. Each estimate carries uncertainty, and the working group presented a low and a high case for the two largest projects.

Sensitivity

If desflurane use fell by only half rather than nearly all, the first project's annual savings would drop to about $34,000, still paying back within months. If energy prices fell, the ventilation project's payback would lengthen to about four years. The ranking did not change under any reasonable assumption, which gave leaders confidence in the sequence.

Involving the Anesthesiologists

The anesthesia department chair presented the evidence on desflurane to her colleagues herself. Several were surprised by the size of the difference among agents. The department agreed on a standard of sevoflurane or intravenous anesthesia as default, with desflurane available on request for clinical reasons, and a monthly report of agent use by clinician, shared privately.

Comparing the Projects

The two anesthesia projects have tiny upfront costs, short paybacks and the largest emissions reductions. Ventilation setback costs more upfront but pays back within three years and reduces energy use. Reusable textiles barely break even financially but reduce waste substantially.

Benefits Not Priced

Lower emissions reduce air pollution and climate harm that affect the health of the hospital's own community, where asthma rates are high. These benefits are real but difficult to value in the hospital's own accounts. The working group described them in plain terms, noting that the anesthesia projects alone could cut the operating rooms' anesthetic gas emissions by more than half.

Risks

Anesthesiologists might resist changing a familiar agent; the plan involves them in setting the new standard and allows exceptions. Ventilation setback must not compromise infection control; the infection prevention team must approve settings. Reusable textile supply depends on a reliable laundry vendor.

The Recommended Sequence

The working group recommended starting with the two anesthesia projects, which pay back within months, and using their savings to fund the ventilation setback in year two. The reusable textile project would follow in year three if the vendor pilot succeeds.

Answering the Chief Financial Officer

The answer to whether the hospital could afford to be green was yes, if it began where sustainability and savings overlap. The four projects together would save about $195,000 a year once in place, with a combined five-year net present value of about $549,000.

Beyond the Operating Rooms

The same method will be applied next to lighting, food waste and pharmaceutical waste across the hospital, and the working group will publish its estimates and results internally so departments can propose their own projects.

Measures

Measures include anesthetic agent purchases and estimated emissions, operating room energy use, waste volumes and realized savings compared with estimates, reported quarterly to the executive team.

Conclusion

A hospital with a 1% margin cannot afford projects that only cost money, but many sustainability projects save it. Research on anesthetic gas emissions and operating room energy pointed to the largest opportunities, and a simple economic analysis showed that the anesthesia projects pay back within months and can fund the rest. Economic analysis made the case for sustainability in the language the chief financial officer needed.

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References

Eckelman, M. J., & Sherman, J. (2016). Environmental impacts of the U.S. health care system and effects on public health. PLOS ONE, 11(6), e0157014. https://doi.org/10.1371/journal.pone.0157014

MacNeill, A. J., Lillywhite, R., & Brown, C. J. (2017). The impact of surgery on global climate: A carbon footprinting study of operating theatres in three health systems. The Lancet Planetary Health, 1(9), e381-e388. https://doi.org/10.1016/S2542-5196(17)30162-6

Sherman, J., Le, C., Lamers, V., & Eckelman, M. (2012). Life cycle greenhouse gas emissions of anesthetic drugs. Anesthesia & Analgesia, 114(5), 1086-1090. https://doi.org/10.1213/ANE.0b013e31824f6940

What the MHA 560 Week 4 instructions ask

MHA 560 Week 4 usually asks students to analyze the economics of sustainability practices in a health care organization. Students are often asked to identify sustainability initiatives, estimate costs, savings and payback, consider benefits that are hard to price such as health effects, compare options and recommend priorities. Some versions ask for a business case for one initiative. Read the prompt for your version and check whether a specific discount rate is required. Strong papers use a clear method such as payback period or net present value, state assumptions, include both one-time and ongoing costs, account for co-benefits and risks honestly and show how the analysis fits the organization's financial position.

How this MHA 560 Week 4 example is built

A finance chief's doubt about whether a hospital earning a 1% margin can afford to be green opens the paper. The sustainability working group proposes four operating room projects. Research on the life cycle emissions of anesthetic drugs, on operating room carbon footprints and on health care's share of national pollution sets the environmental stakes. Each project's one-time costs, annual savings, payback period and five-year net present value are estimated, with assumptions stated. Health co-benefits are described but not priced. The analysis ranks the projects and recommends a sequence that funds later projects from early savings, with measures, risks, sensitivity checks and clinician involvement.

MHA 560 Week 4 grading rubric: where the points go

The economic analysis week is typically graded on sound method, realistic estimates and clear recommendations. Graders look for identified initiatives, one-time and ongoing costs, savings, a payback or net present value calculation, stated assumptions, consideration of co-benefits and risks and a ranked recommendation suited to the organization's finances. Using research to estimate environmental effects strengthens the analysis, as does testing how results change under different assumptions. Explaining which benefits cannot be priced, and why they still matter to patients and the community, earns credit. Organization and APA formatting account for the remaining marks. Papers that claim savings without calculations, or ignore upfront costs, commonly lose points; so do analyses that skip stating assumptions.

MHA 560 Week 4 help: mistakes to avoid

MHA 560 Week 4 papers often stumble by asserting that sustainability saves money without ever showing the numbers. For each initiative, list one-time costs, ongoing costs and savings, and state your assumptions. Use a simple method, such as payback period, and a more complete one, such as net present value over five years. Include benefits that are real but hard to price, such as health effects of lower emissions, and say how you weighed them. Consider risks, such as clinical acceptance and supply reliability. Finally, rank initiatives in a sequence the organization can afford, show how early savings can fund later projects and test whether the ranking holds if your assumptions are wrong.

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MHA 560 Week 4 questions, answered

What does MHA/560 Week 4 usually ask for?

The fourth paper typically asks students to analyze the costs, savings and wider benefits of sustainability initiatives in a health care organization and recommend priorities.

Where can I find a free MHA 560 Week 4 sample paper?

You can read the operating room sustainability analysis above at no cost, and notes explain each calculation. Describe the initiatives you are evaluating, and we write your first paper free.

Which anesthetic gas has the largest climate impact?

Life cycle analysis found desflurane has the largest greenhouse gas impact of common anesthetic drugs, about 15 times that of isoflurane and 20 times that of sevoflurane per hour of anesthesia.

How much pollution does US health care produce?

A 2016 analysis estimated the US health care sector was responsible for about 10% of national greenhouse gas emissions in 2013 and significant shares of other air pollutants.

What is a payback period?

The time it takes for an investment's savings to equal its upfront cost, a simple measure often paired with net present value to account for the timing and total value of savings.

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