The Business of Health Care

Money and Values: For Healthcare Workers, It’s Time They Align


It shouldn’t be controversial to say that promoting the well-being of patients and our community should be at the core of our decisions in health care — even when competing factors exist. Yet we have grown increasingly uncomfortable to realize that we’ve been investing in companies whose products — including fossil fuels — are at the crux of diseases we treat.

In 2018 alone, fossil fuel combustion-produced particulate matter was responsible for an estimated 9 million deaths worldwide, according to a recent publication by researchers from Harvard University and the Universities of Birmingham and Leicester in the United Kingdom. Other health effects are extensive, including increased cardiovascular disease and respiratory illnesses, especially in small children. Fossil fuels are also widely considered a primary driver of climate change, and their combustion contributes to the increased numbers of record heat waves and heat-related deaths, as many US communities are facing this summer.

Our hospitals, as tax-exempt nonprofits, provide us retirement plans in the form of 403(b)s, financial accounts similar to 401(k)s that are offered by for-profit companies. As employees who are eligible for benefits, we are typically automatically enrolled in the retirement savings plan, with contribution limits determined by the Internal Revenue Service (IRS). Recently, we learned that by the end of 2020, of the $35 trillion in US retirement assets, $1.2 trillion were invested in these 403(b) plans, according to Investment Company Institute, the trade association for investment companies.

With healthcare representing the largest sector of employers in the US, with nearly 7 million employees at hospitals alone, our employers should provide us with options for retirement funds that do not contain fossil fuel investments that ultimately undermine our duty to patients.  While retirement finances aren’t our focus during our workdays, the effects of our collective $1.2 trillion investment do appear in clinical settings.

The default choice at our institution, like many, is a target-date fund composed of “passive investments”, i.e. indexed stocks and bonds that rebalance as the employee’s retirement date nears. Most also offer pre-screened mutual funds chosen by the employer’s investment committee, or allow participants to transition retirement funds into a brokerage account to self-manage investments. To choose an alternative investment strategy requires financial know-how and effort, so, unsurprisingly, most of us invest in the default. The largest, most-used are the Vanguard Target Retirement Index Funds, which have an estimated $292 billion invested in fossil fuel companies.

With the links between fossil fuels and the acceleration of global warming increasingly apparent, a growing number of institutional funds, including dozens of university endowments and large pensions, have divested from fossil fuel companies. Surprisingly, hospitals trail in this effort, representing just 1% of these institutions, according to, an organization devoted to accelerating clean energy.

The efficacy of divestment in promoting change is often debated. One example advocates frequently cite is American disinvestment in Apartheid-era South Africa, though the true financial impact of divestment is uncertain. Regardless, as more institutions participate, the campaign becomes an unignorable social movement that may further drive cultural shift, policy change, and industry action.  

There will always be people who believe fiduciary responsibility means pursuing the highest returns, social impact be damned. However, Moody’s Investor Services, the credit-rating firm, recently warned that industries that produce significant amounts of carbon could be hurt financially as governments, banks and money managers try to lower the carbon intensity of their investments.

Coal-derived electricity production has declined by roughly 50 percent in the last 5 years and a recent report from investment company BlackRock found that portfolios divested of fossil fuels “experienced no negative financial impacts from divesting from fossil fuels. In fact, they found evidence of modest improvement in fund return.” Financial considerations seemed to be at the forefront of University of California’s (UC) 2019 decision to make both its $13.4 billion endowment and its $70 billion pension “fossil free”: “We [UC] have been looking…ahead as we place our bets that clean energy will fuel the world’s future… We have chosen to invest for a better planet, and reap the financial rewards.”

Creating socially-conscious funds is complex; understanding their implications, even more so. Some may argue that a more effective strategy is to continue fossil fuel investing, thereby maintaining a voice in those companies. As a recent example, activist investors elected climate-concerned directors to Exxon’s board who may alter the direction of the company. But, what made this announcement so groundbreaking was its rarity. Until this practice becomes the norm, disinvestment remains a reasonable alternative.

Healthcare institutions and we, as their employees, have a mission to heal. To further this goal, we deserve to be offered investments that align with our interests, including fossil fuel-free retirement investment options. We also deserve to be educated when default retirement funds include investments in companies that contribute to disease and death.

The Mass General Brigham (MGB), the hospital system in which we work, is the largest employer in our state with 80,000 employees. After three years of strong advocacy by our colleagues, MGB’s Pension Management Committee has approved two employee retirement fund options that follow environmental, social, and governance (ESG) criteria, which will become available in January. It’s far from perfect, but it’s a start.

During open enrollment this November, we hope our colleagues will join us in taking this small first step to better align our investments with our human health priorities by affirmatively selecting an ESG fund option (or opting to self-manage a brokerage account), and that other hospitals will meet or exceed MGB’s actions.

Wynne Armand, MD (@wynnearmand) is a primary care physician at Massachusetts General Hospital and Harvard Medical School, and a Public Voices Fellow of The OpEd Project.

Christian Mewaldt, MD is a hospital medicine physician at Massachusetts General Hospital and Harvard Medical School, and a Public Voices Fellow of The OpEd Project.

1 reply »

  1. Here’s a better way.

    Tax corporations based on their carbon production and tax investor returns also for these companies. The system then will self level and investors will move money from high tax polluting industries to low carbon producing low tax companies.

    Most investors will elect the higher returns under your proposal as profit always trumps ethics. Investors horizon of accountability is too short for them to grasp the world they will leave their children and grans children.