Efficient Facilities: Reducing Costs While Maintaining, Optimizing Operations

With increasing demand to reduce the cost of operations, healthcare facilities are faced with the challenge of increasing the efficiency of the facilities they manage. Healthcare owners are struggling with the need to improve the bottom line with limited capital to spend on projects even with the best rate of return. The return on investment is also typically much more attractive and visible on the addition of clinical services compared to investments in the infrastructure. However, studies have shown that when looking at the total lifecycle cost for a healthcare facility, 87 percent of the total cost is spent once healthcare owners start operating the new facility, with almost half of that cost spent on utilities. The right approach during the planning, design and construction of a new facility can yield a positive return on investment and lower the overall cost basis for ongoing operations.

As with any new endeavor, the challenge is to have the right strategy, process and tools and utilize the latest technology and systems to achieve maximum efficiencies. To have effective facility management, healthcare owners must invest the time to determine how they will manage and operate their facilities. With little to no additional premium in construction, systems can be designed into a new project that will meet the technical capabilities of staff, as well as their ability to deal with complex systems. If additional staff technical capabilities are required to meet the goals of a new system, they can be identified early in the process to allow for proper training and implementation. Additionally, a clear understanding of the volume of operations that will be outsourced will have an impact on the type of systems that will be built. In architecture, the phrase “form follows function” is often used. This is highly applicable to the development of new systems as well.

Healthcare organizations should take the critical first step by creating an infrastructure plan concept. This vital process can also be conducted in conjunction with a facility master plan. Reviewing the 15 important factors (see sidebar) sets the basis for developing this plan.

Reviewing, evaluating and developing strategies to close the gaps in the data discussed previously forms the basis of an infrastructure plan concept.

As more hospitals are becoming part of larger systems, opportunities exist to capitalize on the economies of scale. Healthcare owners are experiencing increased responsibility for managing multiple locations, many of which are offsite. Centralizing operations, negotiating and bundling service contracts for the entire system, implementing the right technology to network all facilities, eliminating duplications with staffing and “right staffing” are all areas in which savings can be realized.

To reduce the utility costs, many are negotiating new agreements utilizing large purchasing groups. However, the demand side of business requires additional investments to also reduce the cost of consumption. With limited resources and capital available, creative measures that require minimal investment need to be implemented to reduce the demand.

Optimizing operations

> Utilizing the latest in technology to reduce energy costs and improve staffing efficiencies by standardizations, centralizations and sharing resources. Examples of these initiatives include ensuring all systems are commissioned during any new installation, identifying the utility baseline and Energy Star rating and comparing to industry standards.

> Conduct retro-commissioning of the existing systems at locations where there are opportunities to reduce cost. Identify the deficiencies and shortcomings. It should be noted that the opportunities to reduce cost may be as important as reducing liabilities by ensuring systems are operating optimally, per code, and can provide patient comfort and safety.

> Work with the existing service contractors and staff to make corrections to systems. Typically most are processed through the existing maintenance work order system. Experience has shown that the majority of such corrections require minimum investments.

> When systems are operating correctly, provide optimization and implement energy reduction and demand reduction opportunities. Most optimization strategies can be achieved by making adjustments and correcting “bad habits;” many would not require significant expenditures.

> Provide continuous commissioning through a monitoring program at times from remote locations. In the end, the key is to identify bad habits and modify the way the systems are maintained and operated in order to reduce costs.

> Utilize such technologies to share information between facilities and improve staff efficiencies. Examples are dispatching more trained staff from a central location or reducing the staffing on remote locations by reporting alarms to a central location.

It should be noted that the latter steps cannot be implemented unless more advanced energy management and remote monitoring capabilities are in place. The implementation of such technologies will be cost prohibitive unless implemented while a major capital project takes place. This re-emphasizes the importance of planning and having the right process in project launch and delivery.

Ultimately the direction taken to create a more efficient building and systems must be strategic. If an organization is planning a capital expansion, there are more tools and options to work through. However, if there is no immediate capital plan to be the catalyst for this effort, then retrofit tactics would need to be employed. By following a structured plan through the capital delivery process, a more efficient building can be realized. The simplistic formula begins with the right concept that is an extension of the strategic vision. n

Authors: Steve Higgs is senior vice president of KLMK Group Inc. With more than 17 years of facility planning and program management experience, he brings a wealth of knowledge and expertise to healthcare owners. Mo Deljoo, P.E., is president of Noveen Consulting. Noveen Consulting provides infrastructure planning and assessments, design management, commissioning, energy management and technology services to healthcare owners. 


15 important factors:

1 Company’s vision as it relates to focus on “non-core” services

2 Existing staff capabilities and their readiness to maintain complex systems

3 Number of full-time employees and level of staffing

4 Cost of purchasing utilities

5 Level of outsourcing as it relates to preventive maintenance and service contracts

6 Availability of skilled workforce in the market

7 Company’s financial strength to absorb the skilled workforce

8 Is the hospital a single entity or part of a larger system?

9 Level of sharing workforce within the hospital system

10 Centralization options within the system

11 Standardization within the hospital system (inventory and purchasing strength)

12 Method of acquiring and purchasing service contracts

13 Number and location of offsite facilities — owned versus leased

14 Energy baseline for the existing facilities

15 Level of modernization and implementation of the right technology

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Posted August 15, 2013

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