As healthcare organizations experience various economic hardships, strategic use of facility planning can improve financial capacity and value.
At present, many hospital and health system leaders view the purchase and maintenance of facilities as a necessary business operations expense. And a growing expense at that.
Of 200 healthcare facilities professionals surveyed, 38% are increasing their budgets for new hospital construction in 2023, according to a recent survey conducted by the Health Facilities Management magazine. Additionally, 26% of survey respondents say their projects are over budget and behind schedule — up from 20% last year and the highest level in over a decade.
But when facilities planning is approached strategically, facilities can positively impact healthcare organizations by enabling cost savings and enhancing value to communities and employees. For example, a smartly planned and maintained healthcare facility is more likely to enable efficient workflows and positive patient experiences. This leads to lower spending through improved efficiency, reduced employee turnover and even shorter length of stay for patients.
“There must be a change in the dialogue among healthcare executives that facilities planning isn’t a necessary evil – it’s actually part of the organization’s mission and necessary to providing essential services,” said Mark Kenneday, director of market strategy and development for healthcare at Gordian, which provides accurate insights, robust technology, and expert services for all phases of the building lifecycle.
4 steps to realizing the advantages of facilities planning
To reap the benefits of strategic facilities planning, healthcare organizations must be committed to the key principles outlined below.
- Include facility planners at the decision-making table: The executive team at most health systems and hospitals doesn’t include leadership from the facilities planning team. Instead, facility planners usually report to the chief operating or financial officer, who in turn relays facility plans and investments to the C-suite and board members.
This is an inefficient way to communicate facility planning needs because CFOs and COOs generally aren’t well-versed in the complexities involved in facility planning.
By including a facility planning leader in the C-suite, healthcare organizations are better positioned to make facility planning decisions suited to their unique needs and challenges, boosting overall long-term financial health.
- Conduct a facility condition assessment: Facility planning and maintenance are highly complex endeavors for many healthcare organizations due to the complicated nature of providing healthcare services and the vastness of most provider networks. A continuous cycle of improvements and new construction projects are required to not only provide lifesaving services but to remain competitive in the marketplace.
A best practice to guarantee your healthcare organization makes facility planning decisions that drive short- and long-term value is to conduct facility condition assessments. A facility condition assessment (FCA) is a technical assessment measuring the condition and functionality of all the assets in an organization’s facilities portfolio. The result is a verified, accurate and reliable inventory of an organization’s facilities infrastructure, including all physical assets that require funding to maintain. An FCA will also codify the current condition of the building including interiors and other aspects of the built environment.
By performing an FCA, organizational leaders put themselves in a better position to assemble and articulate facilities’ needs, prioritize investment options and ensure a defined strategy is behind every decision made.
“You’ve got to fully understand the condition of your facilities as-is before you can jump into an envisioned future and be successful,” Kenneday said.
- Establish common vocabulary: Once facility planners secure a seat at the tables of top leadership, they must know how to communicate priorities effectively.
“Facility planners have to be able to speak the language of the people in the C-suite and in the boardroom,” said Pete Zuraw, vice president of market strategy and development at Gordian.
Facility planners should avoid using jargon or sharing unnecessary details. As leaders manage tight budgets, they’re increasingly likely to select investments directly impacting patient care. Recognizing this focus, planners must connect facility projects and improvements to their organization’s mission and strategic vision.
“Instead of saying, ‘The boiler is broken, we need cash to fix it,’ speak to the implications it will have for patients. Then, you begin to move to a place where you're engaging in a shared problem and a shared solution, not a competition over resources,” Zuraw said.
- Augment FCA findings by harnessing data: In determining facility planning needs, healthcare leaders should use internal data sources including patient and HIPPA-scrubbed data from the electronic health record. Patient data can offer valuable insight into throughput, length of stay and admissions for each medical unit, which are immensely helpful data points for facility planning.
Despite the widespread adoption of electronic health records, the healthcare industry overall has been slow to use this kind of data to make strategic facility planning decisions. “If your organization has invested in an FCA, and you can begin to use your other data resources to improve and inform that information, you’re on a much better track to success,” Zuraw said.
A conversation about risk
By embracing the key principles outlined above, healthcare organizations can realize benefits from facility planning rather than viewing it only as a necessary expense. For example, after implementing strategic facility planning measures, healthcare leaders might gain a new perspective on deferred maintenance.
Often seen as a daunting, costly issue for large institutions, deferred maintenance should instead be viewed through a risk management prism; not all deferred maintenance needs to be resolved.
“There’s a lot of deferred maintenance that can run to fail without becoming a critical expense or impacting operations,” Kenneday said.
By implementing strategic facility planning, healthcare organizations can arm themselves with the critical support and information necessary to understand which deferred maintenance items should be prioritized, thereby improving overall financial capacity and mitigating unnecessary risk.
How Gordian can help
As hospitals and health systems reevaluate expenses such as facility planning, it’s essential to have a partner. Gordian works alongside healthcare organizations to create relevant and strategic facility planning programs, providing tools and support for facility managers and financial leaders to achieve leadership buy-in. The company also helps organizations gather and evaluate data sources pertinent to their facility planning goals.
Learn more about Gordian and the services we provide by visiting our website.