Healthcare facilities maintenance: Reduce risk and improve value for money

In healthcare, along with many other institutional sectors, executive leadership tend to face significant challenges in prioritizing and allocating capital and operational funding across multiple clinical departments all striving for more.

Additionally, healthcare facilities maintenance and asset lifecycle replacement are generally considered to be an unpopular sunk cost that detracts from clinical service delivery, and very often these are deferred in the light of more pressing clinical demands.

However, reducing the maintenance budget and deferring lifecycle replacements is a false economy that potentially leads to an exponentially increasing deferred maintenance predicament with a corresponding increased risk of early asset degradation and failure. This puts clinical services and patient care at risk.

As healthcare facilities grow older and deferred maintenance increases, more maintenance funding is needed just to stand still until some equipment, components, or systems give up.

Questions to ask about healthcare facilities maintenance:

• Is the facilities maintenance and operations organization acting as efficiently as it can?

• Are the deployed systems appropriate for the operation, are they properly set up, and do they provide the data vital to enable effective decision making?’

• Are the right policies and processes in place to optimize efficiency?

• Do we have the right skill sets and balance of in-house staff and specialist contractors to support the effective delivery of maintenance?

• Is there a comprehensive, all-encompassing, Asset Management Strategy with supporting short and long-term plans that integrate day-to-day maintenance, lifecycle replacement, and energy optimization?

The goals should be to optimize expenditures, as every maintenance dollar is a dollar removed from clinical service delivery, and to minimize the risk of (catastrophic) failure. As healthcare facilities grow older and deferred maintenance increases, more maintenance funding is needed just to stand still until some equipment, components, or systems give up. Turning this around starts with three initiatives:

• Strategic asset management planning

• Executive commitment to evaluating whole life costs

• Implementing a strategic asset management plan to optimize these expenditures.

Why does healthcare facilities maintenance get deferred?

Historically, the challenge faced by senior finance evaluators has been the traditional approach to budget exercises, which can be fragmented, as the three areas do not typically go through the same evaluation or approval process.

Financial pressures often result in deferred maintenance, which may save on operational costs in the short term but will introduce risk and higher replacement costs given the impact on clinical operations and the high price of urgent unplanned replacements.

Evaluating whole-life costs

Financial experts are all familiar with the Present Value (PV) style of analysis, which in this case would clarify the best value for money from a variety of asset maintenance and replacement options, including energy consumption. This is also known as evaluating whole life costs. The exercise can also be extended to include insource/outsource options, integration of new technologies and processes, and even departmental resource planning.

For example, at the new Cowichan District Hospital currently in the planning stage on Vancouver Island, the Altus Group Asset and Facility Management Team is working with the Island Health Authority, Cowichan Hospital Maintenance and Engineering Executive, and the 3rd party architects, engineers, and planners, all in a collaborative manner.

This will achieve the best possible value for money – all long before the ground has even been broken for new construction. Of course, this approach can be implemented at any stage in the life cycle of the portfolio, and in fact, may even be more important while a hospital is in the operational phase to ensure risk avoidance and allocation of scarce resources are optimized.

Get the most from your maintenance budget

In conclusion, healthcare facilities are more important than ever and managing their maintenance with scarce resources will continue to be challenging.

It is vital that risk is reduced and the best value for money is applied. Find out how to get the most from your maintenance budget and learn how to mitigate risk for your infrastructure projects throughout the asset lifecycle.