The U.S. Department of Health and Human Services (HHS) has launched a new initiative to mobilize the healthcare sector, particularly safety net providers, to take advantage of opportunities in the Inflation Reduction Act (IRA) to reduce its own greenhouse gas emissions, increase energy efficiency, and improve climate preparedness and resilience. The HHS Office of Climate Change and Health Equity (OCCHE) held the first session of its “Catalytic Program on Utilizing the IRA” last month.

While this new program moves important work on climate change forward, the OCCHE has been hobbled by a lack of funding. Established in January 2021 through President Biden’s Executive Order 14088, $3 million was included in the President’s FY 2023 budget request to fund the Office, yet Congress did not appropriate the funds. The President’s FY 2024 HHS budget request includes $5 million for the OCCHE, but Congress has yet to pass the budget. In the meantime, the Office has pressed forward with staff assigned from other parts of HHS.

To date, the OCCHE’s key initiative has been a voluntary pledge for the healthcare sector, which is responsible for 8.5% of greenhouse gas emissions, to lower greenhouse gas emissions and build a climate-resilient healthcare infrastructure. Over 100 organizations have signed the pledge to date.

The Catalytic Program takes a more proactive approach, focusing particular attention on engaging “safety net providers,” such as Federal Qualified Health Centers (also known as community health centers), Essential Hospitals, and rural healthcare providers who serve uninsured, underinsured, and Medicaid patients. About 20% of the country’s patients live in rural areas, and over 30 million patients receive care from a community health center. Of community health center patients, 90% have incomes below 200% of the Federal Poverty Level, 48% receive Medicaid benefits, 20% are uninsured, and 63% are Black, Indigenous, and People of Color. Community health centers have their roots in the Civil Rights Movement and the War on Poverty, with a mission of serving those who have faced historical barriers to healthcare. Essential Hospitals, many of which are publicly-owned or non-profits, serve uninsured patients and others experiencing hardship.

While the healthcare-related provisions of the IRA, including prescription drug cost reforms, expansion of low-income subsidies under the Medicare program, and extension of Affordable Care Act Marketplace premium assistance, are well-known within the healthcare sector, the climate-related provisions of the IRA have not received as much attention. The Catalytic Program seeks to change that by providing information and assistance to safety net providers related to accessing IRA tax credits, direct pay, the Low Income Communities Bonus Credit, and other benefits.

The program’s creation was announced at a “White House Roundtable on Leveraging the Inflation Reduction Act for Safety-Net Health Organizations” held in October 2023. A kick-off event was subsequently held in November. The first of the program’s seven sessions was held on January 25. Presenters shared a five-year vision to transform healthcare so that the sector is better prepared to respond to climate impacts, improve operational efficiency, reduce greenhouse gas emissions, and advance health equity. Sessions will be held every two weeks for the duration of the program, offering informational resources on grant programs, tax credits, and direct pay provisions in the IRA, as well as other financing strategies, such as working with Community Development Financial Institutions. The series will focus on how safety net providers can access IRA resources to install solar microgrids, green their transportation fleets (including ambulances), and partner with communities to address the health effects of climate change. Additional sessions will be held in alternate weeks over the course of the program in which Essential Hospitals, community health centers, and rural health providers can share peer-to-peer learning and technical assistance.

The potential for solar microgrids to increase climate resilience in environmental justice communities, generate operational savings, and reduce emissions is especially promising for these healthcare providers. Installations within healthcare facilities were recently facilitated by a waiver issued by the Centers for Medicare and Medicaid Services. Previously, regulations required that all emergency power be supplied by a generator or battery system. The 2021 waiver authorizes healthcare providers to add microgrid systems to their emergency power capacity.

The waiver has made it possible for healthcare providers like CrescentCare Community Health Center in New Orleans to strengthen its ability to care for over 13,500 patients when climate disasters strike. It also generates energy savings that can be reinvested in patient services. Following Hurricane Ida in 2021, CrescentCare lost power for nine days. With disruptions to supply chains, the community health center was unable to get diesel to power its generator. Not only was CrescentCare unable to care for its patients during an emergency, it also lost $250,000 in spoiled medications and vaccines resulting from the loss of power. The health center subsequently installed a solar microgrid and backup battery systems. With the newly installed microgrid, the cost to power its 65,000 sq. ft. building is 20% lower. Not only is CrescentCare better positioned to meet the needs of the community during a climate crisis, but it has also partnered with other organizations in New Orleans to serve as a resilience hub through the Community Lighthouse Project.

The degree to which safety net providers engage in the program and take advantage of the IRA resources available to them remains to be seen. Potential barriers to participation include a need for more organizational capacity in a sector still struggling to recover from the COVID-19 pandemic and, in some cases, facing uncertain federal funding levels. Funding for more than 1,400 community health centers across the country, for example, has essentially been flat for the past five years, ranging from $5.5 to $5.6 billion. Other challenges in taking advantage of IRA benefits include access issues for those organizations that rent their facilities.

The opportunity for safety net providers to increase their capacity to serve their patients  – both through greater climate resilience and energy efficiency cost savings can be redirected to patient care – is significant, however, and should not be overlooked.