Using Critical Data to Achieve Savings

By adopting a centralized, standardized approach to facility management, organizations can save money and improve safety and the patient experience.

By Mike Jambrone and Mike Mostardi, Contributing Writers

Healthcare systems have faced significant cost pressures for years, and the first quarter of 2023 has shown that the trend is not slowing down. To maintain their margins, healthcare organizations are prioritizing cost reductions in their operations. 

Finding innovative solutions to cut costs has become increasingly important, and one way to achieve this goal is through creative real estate strategies, such as rethinking the approach to facilities management and maintenance. By adopting a more centralized and standardized approach to managing facilities, healthcare organizations can save millions of dollars while improving the safety and experience of patients, visitors and employees. 

A new approach 

Ideally, healthcare organizations would take a proactive approach to facilities operations by planning and scaling their maintenance and management strategies as they grow. Instead, many organizations employ a reactive approach, only fixing equipment and facilities as they break down – an approach that can be costly in the long run. 

This strategy lacks standardization and a centralized approach to managing a large operating expense, which can lead to increased inefficiencies and unnecessary expenditures. It is imperative for healthcare organizations to develop and implement a centralized, standardized approach to facilities management that aligns with their strategic goals and objectives, which can help drive long-term efficiencies and cost savings. 

Interviews with more than 600 healthcare C-Suite leaders across the United States reveal interesting insights into the way healthcare organizations approach facility management. Among the insights: 

  • Healthcare executives highly value the tireless efforts of facilities maintenance and operations teams. 
  • Healthcare systems lack objective data to define performance, which could limit opportunities for improvement. 
  • Leaders are concerned about the absence of succession planning for healthcare facilities managers, considering that most of the facilities management workforce is expected to retire in the next three to five years. 
  • A significant gap exists in the adoption of technology compared to other support service departments, which is hindering the efficiency and effectiveness of facility operations. 

Opportunities to save 

Despite these feelings, healthcare organizations facing the current pressures often address them by not back-filling positions, further deferring maintenance and reacting without data. This reactive, subjective approach is not sustainable. 

Ideally, leaders would take a data-driven approach to facility management, which provides visibility into acute, nonacute care and ambulatory facilities. They also would partner with an advisor that works alongside in-house facilities management teams to: measurably improve patient, visitor and employee experiences; reduce risks; and improve financial performance – all without the need for additional outsourcing. 

Moreover, an analysis of accounts payable and general ledger data for 600 healthcare organizations revealed a significant opportunity to save millions of dollars while improving safety and the patient experience. By identifying specific experience markers, organizations can adopt a more proactive approach to facility management, leveraging data to make informed decisions and achieve measurable improvements across their facilities. 

The opportunities lie in eliminating variation, leveraging technology and instituting efficient processes, among other steps. Unfortunately, facility management leaders have full-time jobs, and it is difficult to assess and develop the business case for these initiatives on their own. 

Partnering with an experienced third-party facility management provider can help organizations identify specific operational improvements that align with their strengths and can be augmented with best-in-class industry options. By working alongside in-house facilities management teams, an experienced advisor can assist in achieving measurable improvements in patient, visitor and employee experiences, reducing risks, and improving financial performance. 

Data-driven approach 

To achieve these goals, healthcare organizations need to understand and validate the best ratio of in-house to outsourced repairs and maintenance, develop a realistic energy and sustainability roadmap, consolidate third-party vendors, implement necessary technology to support facility management functions and measure outcomes to ensure expected results are achieved. An experienced third-party facility management provider can help healthcare organizations meet these needs and achieve their operational improvement goals, allowing them to save costs and improve safety and the patient experience. 

Implementing a data-driven approach to facilities management is not without challenges. One hurdle is overcoming resistance to change. Many organizations have entrenched cultures and processes that can be difficult to shift, especially when it comes to something as fundamental as facilities management. But by engaging stakeholders early and often and by clearly communicating the benefits of a data-driven approach, organizations can overcome this hurdle and achieve buy-in from key decision makers. 

Healthcare organizations face a challenging landscape in managing their facilities. Cost pressures, staffing challenges and evolving patient expectations make it imperative that organizations find new ways to reduce costs and improve outcomes. By adopting a data-driven approach to facilities management, organizations can gain visibility into their operations, identify areas of inefficiency and prioritize improvements that can lead to significant cost savings and improved patient outcomes. 

Achieving these benefits requires a commitment to change and a willingness to invest in the technology, processes and people needed to support a data-driven approach. By doing so, organizations can position themselves for success in an increasingly competitive and complex market. 

Mike Jambrone is senior director for healthcare with JLL. Mike Mostardi is the firm’s executive director for healthcare. 

April 24, 2023

Topic Area: Maintenance and Operations

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