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Home energy retrofits reducing healthcare costs

By | December 7, 2012, 5:32 AM PST

Many incidents of asthma occur with children.

Many incidents of asthma occurred with children and were attributed to insufficient home weatherization.

Wegowise, a start-up that identifies energy efficient homes by analyzing utility data, has partnered with a national non-profit to upgrade low-income housing around Baltimore, Maryland. A recent pilot project produced an unforeseen result: emergency room visits among residents who were helped fell by 67 percent.

The Environmental Protection Agency says that buildings in the U.S. waste an average of 20 percent of the US$400 billion plus that’s spent on energy annually, but not every building owner has the same resources to eliminate waste. Homes that aren’t sufficiently weatherized can be hazardous to health. WegoWise and Green & Healthy Homes Initiative (GHHI), a national non-profit, are partnering to help economically disadvantaged families fix weatherization issues that negatively impact their household budgets and lives.

WegoWise provides a Web application to track and analyze utility data. Building owners would use its application to identify their most wasteful properties and greatest potential savings with upgrades. The entire process is automated by the application, which is available to anyone in the U.S. as a monthly subscription. WegoWise saved the GHHI from having to scour through spreadsheets to target homes that were in the greatest need of health and energy upgrades. 31 homes were selected for repairs.

“WegoWise has significantly enhanced our ability to accurately track the cost-effectiveness of the services we provide to the families we serve,” said Ruth Ann Norton, executive director of GHHI. “Energy efficiency contributes to vital economic and health benefits for children and families living in low-income communities. By enabling us to target energy retrofits and verify subsequent savings, WegoWise provides important data that allows us to continue to refine the services that offer the most value for our clients and our partners.”

The upgrades yielded an average annual energy savings of US$400/year in utility bills for low-income families. GHHI weatherized homes, fixed leaky roofs, and replaced aging appliances. The weatherization mitigates environmental elements that can negatively impact a child with respiratory illnesses, so cases of acute asthma fell dramatically. That saved a great deal of money in health costs.

Aetna says that the average cost of an ER visit for asthma can exceed $6,000. Therefore, the 67% reduction in hospitalization has already saved taxpayers (assuming some of the residents were enrolled in Medicaid) and residents approximately $53,000. Who would have thought that weatherproofing a home was a way to both reduce health care spending and improve public health?

It’s well established that home energy retrofits are the low hanging fruit in reducing carbon emissions, but could a budget for energy retrofits today also reduce long term government spending by addressing chronic illnesses?

(image credit: NIH.gov)

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David Worthington

About David Worthington

David Worthington is a contributing editor for SmartPlanet.

David Worthington

David Worthington

Contributing Editor

David Worthington has written for BetaNews, eWeek, PC World, Technologizer and ZDNet. Formerly, he was a senior editor at SD Times. He holds a degree from Temple University. He is based in New York.

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David Worthington

David Worthington

David does not have financial holdings that would influence how or what he covers. Occasionally he consults for other companies; should David cover a topic in which a client is involved, he will disclose this fact in his writing. His views do not represent those of his employers.

He writes for SmartPlanet and is not an employee of CBS.

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11
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+3 Votes
+ -
Fantastic
I love things like this!
Posted by vellen
7th Dec
+1 Vote
+ -
The Challenge
Perhaps the greatest difficulty scaling up this sort of program is figuring out how to 'apportion' the costs and benefits. Very clearly at the level of the country as a whole, or even the federal government as a whole, it would make economic sense to 'just go do it' and send the bill to Medicaid (that is take the funds out of Medicare accounts which would realize more than compensating benefits from reduced ER visits as discussed). In other words, doing these upgrades would, on its face, be a good investment for the Medicaid program to make.

The difficulty immediately arises in that there is a large body of society (taxpayers of a certain political persuasion in particular) concerned with the notion that recipients of these upgrades - either the residents, the landlords or both - will be receiving economic benefit without having 'earned' it. One approach that might assuage this concern would be, through regulation of existing buildings with respect to energy efficiency such that deficient properties would have to be upgraded or be abandoned, while at the same time offering a government program to either pay for or finance at preferential rates, the necessary upgrades...

This sure looks to be a great idea. Now we need to figure out how to scale it up and how to sell it to our more skeptical fellow citizens.
Posted by z2217
7th Dec
0 Votes
+ -
Another challenge is cost control.
Some trial programs of this kind with 2009 stimulus money spent $200,000 per house to winterize $150,000 homes in Illinois.

Other homes were damaged beyond repair by the upgrading company.

The fraud potential is huge.

http://news.yahoo.com/energy-dept-weatherization-programs-rife-waste-fraud-inspector-041208068.html
Posted by Hates Idiots
Updated - 7th Dec
-2 Votes
+ -
No
"concerned with the notion that recipients of these upgrades ... will be receiving economic benefit without having earned' it"

Nope. The concern is that they will become dependent and others will also gather around the government trough.

Our church leads a weatherization program for all the churchs and charitable organizations in the community. We don't breed dependency and we don't do work for moochers. We have a lot of fun.

We don't want government killing good works by the community.
Posted by Banyon
8th Dec
0 Votes
+ -
You bring up an interesting point.
It is true that as the federal governments role in helping the poor has grown, the size and scope of private charity through churchs and fraternal organizations like the Lions Club and Kiwanis has declined.

Many people think this trend has its roots in the dependence society bred by nanny state programs.

Growing numbers of our youth are being taught virtually from birth that only the government can fix things. They are taught that depending on your family and neighbors to help each other is old fashioned and a failed way of life. Membership in such groups has been on the decline for decades because people are taught they are powerless to help.

Yet the numbers do not lie. Poverty in the US has gone up as private charity was pushed aside by the growing government bureaucracy created by the legacy of Johnsons Great Society programs.

It is odd how nanny state supporters ignore that almost every time a new program is setup to help a targeted group of people it seems that group of people slips deeper into poverty and dependency. While a growing number of politicians and their friends grow richer running those programs.

Locally, I love how Joe (Joe for oil) Kennedy makes it seem like his oil assistance program for the poor is this wonderful charity work he does. Few know Joe and his wife make a combined $1 million per year working for that 'charity organization'.

http://www.thedailybeast.com/articles/2012/10/01/jp-morgan-s-food-stamp-empire.html

http://www.examiner.com/article/who-really-profits-big-from-food-stamps-jpmorgan-walmart

I consider the fact your statement received a negative vote as proof of this change in thinking within the US.
Posted by Hates Idiots
10th Dec
+1 Vote
+ -
Pay for mine
your tax money at work, but only grants for low income. Should be for all if I'm being taxed.
Posted by opcom
7th Dec
+1 Vote
+ -
Government grants
This bring to mind the old adage "Everybody wants government grants, but nobody wants to pay taxes"
Perhaps a little community sentiment wouldn't go astray in this modern capitalist society we live in?
Posted by rschmidt@...
7th Dec
-1 Votes
+ -
Not About Health
Maybe it wasn't about health. Maybe before weatherization they were going to the ER to get warm.
Posted by Banyon
8th Dec
-1 Votes
+ -
That is a reality many do not want to face.
One of the goals of the Massachusetts healthcare law was to reduce ER visits with expanded coverage. It has failed.

Somehow increases in ER visits are still tied to the temperature outside. When it gets cold, visits go up.

Maybe a good winterization program would be more successful.
Posted by Hates Idiots
Updated - 10th Dec
+1 Vote
+ -
Interesting comments, but blog post numbers are weak
I found the blog post interesting in itself, but more interesting were the comments. . The discussion in the comments on this piece are a microcosm of what the press reported as some of the most basic arguments between the Romney and the Obama camps on entitlements, taxes, deserving and undeserving govt assistance, who pays and who benefits, efficiency of govt assistance programs, etc. Of course this argument is being carried forward into the current negotiations on the "fiscal cliff."

Buried in the "conversation" is an assumption about the "science" that tells us how many ER visits would have been avoided as well as the costs associated with those avoided theoretical visits. There was an assumption in the blog post that the asthma-related ER visit numbers in the very small population sample involved in the program were directly attributable to home energy retrofits. That is difficult if not impossible to prove or disprove.

The cost for an ER visit for asthma was purportedly taken from an Aetna insurance web site. (Are the costs the same for privately-insured patients as they are for Medicaid patients?) Actually, Aetna's web site says the cost of an ER visit for asthma is $600, not $6000. The latter is for hospital admission for asthma treatment. See the source cited in the blog post for these numbers -- http://www.aetnabetterhealth.com/Pennsylvania/PennProcedureCosts.aspx?menu=1.

In fact, these numbers are not related to incidents of extreme weather but, rather, to incidents associated with not taking prescribed medication among asthma patients, presumably in Pennsylvania. This isn't just bad science, it is really bad reporting/blogging.

Just substituting the $600 figure for the $6000 figure changes the basic economics underlying this blog post.

Beyond, that, asthma is not the only illness that might be affected by a poorly performing home. Energy use is associated with local air pollution and greenhouse gas emissions, which are associated with many adverse health outcomes in the short run for the former and the long run for the latter.

Is it clear that the ER visit reduction was attributable to the energy retrofits (also abbreviated "ER") alone, or were there other interventions to help asthmatics? Were there any other changes that would affect the number of ER visits in this very small sample? Better treatment of asthma, removal of asthma triggers (such as pets, fine particles and gaseous pollutants emitted from cooking, or chemicals released from personal care and hygiene or home cleaning products, among others. for more on asthma triggers, see http://www.epa.gov/asthma/triggers.html

Were the percentages and cost numbers used in the blog post derived from a sample in some very much larger study of asthma incidence among "poor" people and asthma-related ER visits by poor people, (poor presumably defined by being on Medicaid). (None of the comments questioned the source of the numbers in the blog post.) If in a larger population study, I am wondering whether the source numbers for asthma-related ER visits in the larger population were based on household income, Medicaid enrollment status, housing type or age or energy performance, or some other factor or mix of factors.

The precision of some of the numbers in the blog post suggests that they are far more accurate than they might be, something that is questionable upon a closer reading of the blog post.
Posted by halrhp
13th Dec
0 Votes
+ -
Good points.
There is also the point of sick building syndrome associated with buildings that are too air tight and lack adequate ventilation.

Then you have the radon situation in some parts of the country which brings its own health risks in an air tight building.

Health problems associated with both of those issues tend to be longer term in developing and are not reflected as much as ER costs as increased ongoing health maintenance costs.

It is indeed a complex situation to make a simplistic assumption about.
Posted by Hates Idiots
Updated - 13th Dec
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