The Future of Energy Infrastructure in Healthcare: Turning Capital Constraints into Opportunity

Summary

Podcast Summary

Becker’s Healthcare Podcast

Episode: The Future of Energy Infrastructure in Healthcare: Turning Capital Constraints into Opportunity
Date: October 27, 2025
Host: Lucas Voss
Guests:

• Frank Ferramasca, Executive Vice President, ENFRA
• Steven Scannell, Chief Investment Officer, Baptist Health Kentucky

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Brief Overview

This episode explores how healthcare organizations can modernize their energy infrastructure despite financial and operational constraints. The discussion focuses on the "energy as a service" model, its benefits, and how it helps healthcare systems achieve major cost savings, efficiency gains, and capital preservation—all without compromising clinical priorities. Frank Ferramasca and Steven Scannell share their direct experiences, practical advice, and predictions for the future of energy investments in healthcare.

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Key Discussion Points & Insights

1. Major Operational & Financial Challenges Facing Health Systems (02:01)

• Steven Scannell elaborates on current pressures:

  • Mere incremental cost-cutting is no longer enough.
  • Health systems need creative, transformative approaches:

    “You have to be creative, you have to be innovative, you have to be willing to break things and kind of reinvent, if you will.” (C, 02:07)

  • Healthcare organizations lack in-house expertise in energy management, which exposes them to execution risk for energy projects.
  • Partnering with specialized energy firms presents an attractive opportunity.

• Protecting Clinical Capital Priorities (03:21):

  • The energy initiative was carved out from core clinical capital budgets so as not to compete with direct patient care investments.
  • The energy project’s financial value stands on its own:

    “…the value propositions kind of staying on their own and it was a no brainer from our perspective from that regard.” (C, 03:40)

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2. Energy as a Service (EaaS): What It Is & Why It Works (04:14)

• Frank Ferramasca explains EaaS:
  • A model that helps hospitals realize high, guaranteed ROI by extracting value from existing inefficient assets and redeploying it for upgrades and savings.
  • Substantial cost savings:

    “…in the case of Baptist in the tune of 20% of the utility spend, which is a real number…” (B, 04:46)

  • Health systems can avoid new long-term debt and protect their balance sheet.
  • The partnership structure, not just a transaction:

    “At the end of the day, energy as a service is more of a partnership than a transaction. And the definition in my opinion of a partnership is a win win for both parties.” (B, 07:18)

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3. Real-World Impacts & Getting Leadership Buy-in (07:41)

• Steven Scannell’s perspective:
  • Programs do not shift control or remove employees—the assets and staff remain with the health system.
  • ENFRA brings added expertise, better technology, and a strong performance track record:

    “They're bringing more resources, more expertise, more technology, all of those things. And that's what's going to drive the consumption savings.” (C, 09:24)

  • Essential value: Guaranteed consumption savings mitigate uncertainty in volatile energy markets.
  • Advice for others:
    • Assess your organization’s risk tolerance—these are long-term (30-year) engagements.
    • Understand and align on contract terms and conditions.

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4. Industry Trends & Reframing Capital Constraints (12:36)

• Frank Ferramasca on sector-wide adoption:
  • Major health systems (e.g., Baptist, Adventist, Novant, Hackensack Meridian, Christus) have committed to this approach—not just struggling facilities, but forward-thinking organizations.

    “…there's a reason why nationally recognized brands… have chosen to take the plunge into energy as a service…” (B, 12:55)

  • The average national savings surpass 30% for many, with “real dollars sitting literally in the basement and the ceilings of these hospitals just waiting to be tapped.” (B, 13:49)
  • The operating environment for healthcare will continue to demand margin optimization and efficiency.

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5. Practical Considerations & Success Factors (15:06)

• Steven Scannell’s closing advice:

  • These transactions are complex and lengthy (anticipate a 6-month time frame).
  • Engage legal counsel experienced in such deals:

    “…you're going to need a lot of legal assistance and… if you can find a firm that has experience in doing these transactions, it would be, you know, very beneficial.” (C, 15:23)

• Frank Ferramasca on collaboration and growth:

  • EaaS partnerships are creating networks for sharing best practices across systems—innovation is continuous.
  • Key step: Have ENFRA evaluate your site and let the opportunity speak for itself.

    “The juice is certainly worth the squeeze at this level of savings that we talked about.” (B, 16:41)

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Notable Quotes & Memorable Moments

• Innovation Mindset in Healthcare:

  “You have to be willing to break things and kind of reinvent…”
  — Steven Scannell (C, 02:07)

• On Energy as a Service’s Value:

  “There is generally inherent inefficiencies in the energy operations that exist that are costing the system… millions of OPEX dollars in waste per year.”
  — Frank Ferramasca (B, 05:13)

• Partnership Not Just a Vendor Relationship:

  “It's a 30-year partnership. There's a lot to consider. This is not a financial transaction, it's not an operational transaction. It's a marriage of both.”
  — Frank Ferramasca (B, 12:46)

• Advice for Peers:

  “…ask yourself how risk averse you are. You know, this is a 30 year agreement. Hospitals, health systems don't enter into 30 year agreements every, every day.”
  — Steven Scannell (C, 10:51)

• The First Step for Health Systems:

  “…the only way to truly understand what the level of opportunity is is to take a look at it… let me see if it's…worth the squeeze.”
  — Frank Ferramasca (B, 16:42)

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Important Timestamps

• [02:01] Steven Scannell on the need for true innovation and why energy projects are attractive.
• [03:21] How Baptist secured buy-in by demonstrating non-competitive capital allocation for energy.
• [04:37] Frank Ferramasca defines “energy as a service” and financial structure.
• [07:41] Steven Scannell on removing perceived risks and building trust in partnerships.
• [12:36] Frank outlines industry adoption and dispels misconceptions.
• [15:06] Steven’s reminders on transaction complexity and legal needs.
• [16:03] Frank on collaborative innovation and taking the first evaluative step.

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Tone & Language

• The conversation is open, practical, and occasionally candid—both guests emphasize partnership, risk management, and the significant tangible benefits for health systems willing to innovate.
• Frequent references to trust, collaboration, and mutual benefit underscore a solutions-oriented tone.

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Conclusion

This episode makes a compelling case for healthcare leaders to rethink how they approach infrastructure investment, using energy as a service as a model to unlock significant value, strengthen financial health, and preserve focus on clinical priorities. The guests stress the importance of team alignment, external expertise, and viewing the opportunity as a path to long-term strategic advantage rather than a transactional fix.

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Transcript

[A]

Hi, everyone, this is Lucas Voss with Becker's Healthcare. It's great to have you. Thanks for tuning in to the Becker's Healthcare podcast series. Today we're talking about the future of energy infrastructure in healthcare, turning capital constraints into opportunity. And joining me for today's discussion, very excited to have them both. With me is Frank Ferramasca, Executive Vice President at ENFRA, and Steven Scannell, Chief Investment Officer at Baptist Health.

[B]

Frank.

[A]

Stephen, it's great to have you. Thanks for being here.

[B]

Thanks for having us.

[C]

Thank you.

[A]

Absolutely. I want to start off with introductions for our audience here. Frank, why don't you kick us off, tell us a little bit about yourself and your work in healthcare.

[B]

Absolutely. Thanks. Frank Ferramasca, Executive Vice President with enfra. Been with ENFRA almost five years at this point. Prior to joining enfra, background as a CPA with KPMG and had the pleasure of serving the not for profit healthcare community at bank of America Merrill lynch for about 10 years prior to joining ENFRA.

[A]

Awesome. So great to have you. Stephen, over to you.

[C]

Yes. Hello everyone. Steve Scannell, Chief Investment Officer with Baptist Health of Kentucky. I've been with Baptist Health for going on 11 years. Came into the organization as the system vice president of finance and then about five years ago was moved into the chief Investment officer role. Prior to that, I was with McLaren Healthcare System out of Grand Blank, Michigan. Worked for a few other health systems and also did about 10 years in public accounting between Deloitte and EY.

[A]

It's great to have you. And Steve, I want to kick it off with you. I want to sort of level set for our audience here, create a baseline for everyone from the perspective of a health system. What are the biggest financial or operational pressures that you're facing today when you're looking at infrastructure and energy?

[C]

Yeah, I think for us as we kind of enter this era in healthcare where the incremental types of slices of getting rid of cost really isn't going to cut it moving forward. You have to be creative, you have to be innovative, you have to be willing to break things and kind of reinvent, if you will. For us, this opportunity is like that. What was attractive about this is that we're going to be partnering with energy specialists. Healthcare systems aren't energy companies. It's not their core, it's not what they do. So you, you have execution risk around trying to be more energy efficient. And so we found this to be a great opportunity for us in that mold of, you know, trying to, you know, do things a lot differently. Than, than what you're currently doing.

[A]

When you're looking at some of these challenges, again very fast evolving to how do they affect your ability then in turn to invest in some of these core clinical priorities from your perspective?

[C]

Yeah. What was, what's really attractive about this transaction is in the opportunity is that you're, you're dedicating, you know, capital to energy assets that are going to drive value. We were able to sell the organization, the management team, key stakeholders on the fact that these are going to be funds that are going to, you know, help you be a more efficient, more effective operation from an energy infrastructure standpoint. So that way we were able to just carve this transaction out from our other, you know, capital requirements and you know, so it wasn't competing with other projects, the value propositions kind of staying on their own and it was a no brainer from our perspective from that regard.

[A]

Yeah, absolutely. And Frank, we're going to level set again here just a little bit differently against all of what Steve just described. Right. Can you describe what energy as a service actually is? How does it differ from traditional financing or energy management approaches and what are some of the benefits that you really want to hone in on?

[B]

Yeah, no problem. I think said simply, energy as a service is a structure that enables health systems like Baptist Kentucky to take advantage of high ROI or return on investment savings opportunities. And we're talking serious numbers here in the case of Baptist in the tune of 20% of the utility spend, which is a real number which we'll talk about without losing any sort of control of the asset and the operation. My perspective is that the core systems like Baptist are focused on their mission, which is to serve their communities and deliver exceptional care. And as a result of that, there's a natural aversion from management and the finance teams to reinvest in the hospital central energy plants when there's constantly competing capital needs, whether it's strategic growth, ambulatory expansion, technology, you name it, due to that lack of reinvestment, not necessarily due to budget constraints. Right. We partner with very well capitalized organizations, but it's more due to the concept of the highest and best use of funds. There is generally inherent inefficiencies in the energy operations that exist that are costing the system, just like Baptist, millions of OPEX dollars in waste per year. So what energy as a service does is it focuses on extracting intrinsic equity from the system's existing assets and then redeploying all or a portion of those funds into highly accretive Energy conservation measures in addition to known deferred capital needs. That upfront reinvestment drives guaranteed performance, like we said, generally over 20% consumption savings year over year, which is significant. And for Baptist specifically, we collectively, meaning ENFRA and Baptist, worked together through the project development to find an average of almost $7 million a year and OPEX savings through the structure. I would say what is most attractive in my opinion and what has led to the increase in popularity of the structure is anfra's ability to structure these projects in a way that one, raises the upfront capital on parity with MTI debt yields, meaning there's no cost to capital premium. And two, is really the result is no increase in long term debt liabilities on the health system's balance sheet. And I would end with saying at the end of the day, energy as a service is more of a partnership than a transaction. And the definition in my opinion of a partnership is a win win for both parties. Through energy as a service, systems like Baptist recognize significant OPEX savings and preserve their balance sheet While companies like NFRA, 100 year old energy infrastructure company, get to execute on the work that these hospitals have overlooked for many years. So at the end of the day, I think it's the success is a testament to the fact that it's a win win for both parties and it's a great capital preservation play that locks in significant P and L savings.

[A]

Steve, again, tremendous numbers there that we just heard. Very impactful for sure. Any other insights or improvements that you're really keen on that are sort of making a difference for you or from your perspective? And then also I'd love to know what your advice would be for other leaders as they're looking to go down this path of optimization.

[C]

Yeah, I mean, I guess, you know, there's, there's just so many positives to the transaction. You know, I think there's a natural, you know, once when you're bringing in an outside party right to an organization and so there's kind of usually human beings being who they are and you know, the kind of, the defense mechanisms, you know, well, what about not doing right, you know, blah blah, blah. And you know, infra does a great job of just immediately partnering, trying to find out, hey, what, what are your all's plans? How are you all doing things? It's just a very positive approach. You know, your employees stay your employees. You know, there's none of this, this and them kind of thing. So there's this natural instinct of wanting to be, you know, push away Be defensive. And that's not really how this thing works. And again, infra does a great job at that. You know, just again, assets stay your assets, employees stay your employees. What infra is really doing is they're bringing more resources to bear. They're bringing their expertise, they're bringing their track record. Frank, correct me if I'm wrong, I think you all are performing about 20% higher across all your customers on the healthcare space. Compare at a higher level than what the guaranteed savings are that they're contracted for. So it's just really, it's not, hey, we're going to come in and slash all these costs and this is how we're going to make your numbers. They're bringing, you know, more resources, more expertise, more technology, all of those things. And that's what's going to drive the consumption savings. Right, because we really don't have any control in the future on how much are energy prices going to go up. Well, you know, who knows, right? Over 30 years, I mean, you just don't know. So they're, they're really taking that, the execution risk off the table for you so that, you know, you're only going to subject yourself to whatever, you know, the inflationary increase is because they're going to come in and they're going to guarantee that your consumption of energy is gonna go down. And that's really powerful from a value proposition standpoint. I would say for those that are considering the transaction with regard to infra, I mean, they're a great partner. Like I said from day one, been very impressed with everyone in their organization, top to bottom. From Rob, the CEO straight on down, everybody just, you know, great, great individuals, very helpful, very, very talented. I would, I would say one of the most important things that that organization should consider is really asking yourself how risk averse you are. You know, this is a 30 year agreement. You know, hospitals, health systems don't enter into 30 year agreements every, every day. So it's a different mindset that you need to be in and you know, you'll, you'll get to know infra as you go through the process. And obviously they're in a different risk profile than probably both most health systems are. But it's, it's a matter of marrying up as you go through, you know, the potential terms and conditions of the agreement, understanding, you know, what you're willing to do and partner with versus what you're not willing to do. Yeah, absolutely.

[A]

A little bit of evaluation that has to happen right before. Very, very key, Frank. We're excited to have enfra here at Becker CEO CFO coming up on on November 5th in Chicago. Excited to host you all. You're going to talk a lot about some of the challenges that we've mentioned, some of the opportunities certainly in infrastructure and the future of energy. Anything that you're looking to hear from, what are some of the things that you're expecting, themes, questions, etc. What are you taking to the event?

[B]

Yeah, I think we're going to be joined by a lot of great partners just like Steve and Baptist. And I think any question is fair game. Like Steve said, It's a 30 year partnership. There's a lot to consider. This is not a financial transaction, it's not an operational transaction. It's a marriage of both. But I think what we would like to convey and have a candid conversation about is that there's a reason why nationally recognized brands like Baptist Health in Kentucky, Adventist Health System west in California, Novant Health in the Carolinas, Hackensack, Meridian Health in New Jersey, Christus in Texas, Austria, New Orleans, and on and on and on, why they've chosen to take the plunge into energy as a service and really change the way that they think and operate for the future. So I think hoping to convey that, you know, I think Steve alluded to it earlier, he can speak better to it than I can. But the operating environment in health care with administration is not going to get easier and management teams are going to continually year over year be tasked with how can I streamline the operations and find every dollar of margin that I can. Sure they are not for profit organizations but the cash flow needs to come in to better serve the communities. And I think with what we have to offer here at Infra with I said 20% savings at Baptist nationally, the average, believe it or not is closer to 30% with close to 30% savings nationally. There's real dollars sitting literally in the basement and the ceilings of these hospitals just waiting to be tapped. So just looking forward to having conversations with peers, dispelling the myth that energy as a service is for struggling sub investment grade hospitals. It's not. It's really for people like Steve and his organization, these strategic thinkers, those names that I mentioned before, it's putting the highest and best use to their capital and really looking, looking to the future and changing the way that things have been done to better provide for care in their communities. So definitely looking forward to a really Great Roundtable on November 5th in Chicago and hope to see many of you there.

[A]

Yeah, certainly we're excited to have you as well. I'll be there for sure. It's such an interesting topic, so many things to discuss, so many insights. Frank and Steve, thank you so much for being here. This was a fantastic conversation. Just want to open the floor to you all. Steve, anything else that you want to mention to our audience that we might have not touched on?

[C]

No, no, not really. Again, it's going to take a lot of time. It's a complex transaction. I guess the only other thing I would, you know, suggest is, you know, you're going to need a lot of legal assistance and you know, if you can find a firm that has experience in doing these transactions, it would be, you know, very beneficial. But it's, it's going to take quite a bit of time just because there's a lot of things to consider. So I would mark your calendar off for maybe a good six months. Not solid, obviously, but it's going to be a project that will take some time.

[A]

Yeah, it comes back to having a good partner. Right. That's the key part of it. Frank, over to you. Anything else to add?

[B]

Yeah, no, thank you. I think it's really exciting. I can speak from being on the inside of Infra and I know Steve feels the same way. Joining the Energy as a service network has created a network of really strategic, like minded individuals from coast to coast, quite honestly of a new collaboration vehicle that we're seeing kind of develop beyond. Yes, Infra is only focused on energy, but we're seeing these people come together and really start to share best practices as another collaboration network. So really excited about that. It's been really rewarding for me personally to see that. And I think, you know, it may sound daunting at times. Right. There's a marriage between financial, operational, 30 year partnership. The juice is certainly worth the squeeze at this level of savings that we talked about. And I would just let people know, listening, that the only way to truly understand what the level of opportunity is is to take a look at it. And that's the first step. So, you know, Steve mentioned a six month process, but it started on day one and saying, okay, Infra, I like what you're saying. Send a team out here, show me the level of opportunity, let me stew on it, let me see if it's, if the juice is worth the squeeze. If I really want to dedicate the next couple of months of my team's days to evaluating this opportunity. So that diligence process is what we do every day with about 250 hospitals at various stages. But, you know, I just definitely want to end with saying thank you. Thank you for Steve, for making time out of his day and really just, you know, as each partnership, as we grow, for those of you who followed, and for his journey as we rebranded from Bernhardt earlier this year to Infra, every deal that we do, every partnership has new innovations and takes best practices from the last for the for everybody's benefit. So we're continuing to innovate and excited for what's to come.

[A]

Absolutely. Certainly excited to hear what you're bringing to Chicago here. November 5th to Becker CEO CFO Roundtable. We'll see you there. Frank and Steve, again, thank you so much for your time and insights today. And we also want to thank our podcast sponsor, enfra. You can tune into more podcasts from Becker's Healthcare by visiting our podcast [e-mail].