Environmental sustainability in health care: An empirical investigation of US hospitals

Unlike industrial sectors, quality of care is of critical importance in the healthcare sector. Accordingly, incorporating environmental sustainability into healthcare services poses a unique challenge since hospitals must strike a balance among service quality (i.e., clinical quality and patient experience), cost efficiency, and environmental footprints. However, much prior research has focused primarily on the financial benefits of environmental sustainability, mainly in industrial sectors. Environmental sustainability in relation to service quality remains an underexplored topic in literature. As such, it is still unclear whether a hospital's efforts toward environmental sustainability will pay off since the environmental sustainability mantra of “reduce, reuse, and recycle” may not be suitable for healthcare settings. Drawing upon the premise of a practice‐based view, we investigate environmental sustainability in relation to service quality and financial performance in the U.S. healthcare setting. Specifically, this study examines how a hospital's environmental practices impact its service quality and financial performance. Additionally, we examine whether a hospital's continued efforts toward environmental sustainability can generate enduring performance benefits. Overall, our analysis demonstrates the service quality and financial benefits of environmental sustainability in healthcare. However, persistent efforts only lead to enduring financial benefits, not service‐quality benefits.