Aging facilities, deferred maintenance, and resourcing constraints create dynamic challenges for capital planning in the healthcare industry. In fact, 80% of survey respondents in a recent American Society for Healthcare Engineering (ASHE) survey state that the age of their facilities and infrastructure tops their list of concerns.
Aging facilities and infrastructure face a critical issue with deferred maintenance. Many ASHE experts predict that there’s $390 billion worth of deferred maintenance in health care. Capital planning strategies can help mitigate the true cost of deferred maintenance, but it requires a data-first approach to understand how to prioritize, invest, and schedule to optimize available funds.
Capital planning strategies typically reflect how your organization handles ongoing maintenance strategies and requests. In reviewing your approach to maintenance, there’s an opportunity to advance capital planning processes so you can use existing data to build a case for how to prioritize and invest.
For many healthcare and hospital organizations, resource constraints drive their approach to maintenance and overall capital planning. Limited budget and staff means that teams may have to focus predominantly on immediate needs, rather than executing a forward-looking plan.
In capital planning, reactive capital requests come from documented emergencies or assets that have completely stopped working. As assets suddenly fail, it may mean that funding must be pulled from other planned projects in order to make it work.
How do you know if you’re in reactive mode for capital planning? Some key questions to ask:
When in this situation, it can feel like moving to a more planful capital planning process would require too big of a shift. However, it comes down to the data at hand. To shift to a more action-based capital strategy, capital planning software built for healthcare can track all maintenance requests and deferred maintenance.
In doing so, it can help to build prioritization based on what’s needed in the immediate future and what will likely need investment in the long term. A capital planning solution can then identify other areas of focus – helping to minimize emergencies while reducing deferred maintenance needs.
Manufacturers provide estimated lifecycles for assets and components. Action-based capital plans indicate that these elements must be replaced at the time given by the manufacturer, which can lead to some challenges in capital planning.
While this moves away from a reactive-first strategy, this approach results in some hidden costs. In some cases, assets can live beyond the suggested lifecycle by a manufacturer – particularly if your maintenance strategies have been ongoing and conducted on a regular basis.
Key questions to determine if you are in the action-based capital planning stage:
If your capital plan focuses on expected useful life (EUL) as the primary indicator for replacement, you are likely focusing on an action-based approach. There are many benefits to building out capital plans in this way, as it does provide a clear strategy for prioritizing that’s based on data inputs. But, to advance it to where it focuses on replacing assets when they are ready for replacement saves significant costs and maximizes overall investments.
A CMMS that includes capital planning functionality, like FSI’s purpose-built solution, can leverage this information as part of the story to inform decisions around prioritization and investment. EUL and equipment replacement schedules can be informed with what’s happening with assets in the field.
The air handler unit, for instance, may have a EUL of around 20 years. But, if your maintenance team is constantly replacing the motor, coils, and other components at year 15, it may be time to schedule a replacement. Understanding how your deferred maintenance impacts your EUL can give better insight into when you should replace an asset, especially if you’re consistently seeing performance issues.
In the last several years, computerized maintenance management systems (CMMS) have made it easier for teams to shift to a condition-based maintenance approach.
Maintenance logs and advanced reporting give insight into the actual condition of every building, system, and asset to help inform smarter decisions around what to replace, and when. In doing so, it advances capital planning strategies to focus more on the current – and future predicted – condition of the infrastructure and asset.
Condition-based capital plans focus on analyzing available data to understand the state of infrastructure, systems, and assets. Key questions to ask to determine if you are following a condition-based approach:
Individuals are able to make data-informed decisions based off of condition assessments by quickly identifying assets near end of life, in poor condition or having high repair costs by using FSI's Capital Planning tool. Combined with ongoing findings from rounding and inspections, it becomes much easier to build a story and defend investment requests because of the data at hand.
In addition to helping to identify and prioritize capital planning investment decisions, healthcare-specific capital planning tools can provide essential reports and dashboards that make it clear for executives and committees to determine what needs the most investment and when.
Lastly, when following a condition-based protocol, it can simplify the need to request investments for specific system or asset replacements. The data can help tell a story to justify the request, as well as provide deeper insight into what the true return-on-investment may be for replacing that equipment. For instance, if you can tie increased maintenance and energy costs to a particular piece of equipment like an air handler, it can demonstrate how much energy savings could be realized with an upgrade.
Predictive capital planning decisions lead the way for an advanced capital planning process. This takes substantial data collected throughout the healthcare facility or hospital to inform infrastructure, system, and asset investments. From sensors to automated workflows, capturing and tracking more data helps to better inform predictive models.
In using predictive data, it takes into consideration how things may shift. That air handler unit that was giving your team trouble last year? Well, due to construction, the room just became the top choice for patient care and now it’s working in overdrive – causing it to work harder and components to fail faster.
With an advanced capital planning process, your team can access predictive information to see the trends and understand how they are impacting overall performance. Key indications that your team follows a predictive capital planning strategy:
The current age of healthcare facilities and infrastructure strains existing capital planning budgets. To accommodate, teams will need to have detailed, data-driven plans in order to ensure that capital plans are focusing in the right areas – and helping to reduce the deferred maintenance backlog.
As the healthcare and hospital industry continues to respond to market dynamics, capital planning will become a more critical part of operational success.
The increasing backlog of deferred maintenance will continue to shine a light on where capital planning leaders need to focus, while the digital transformation will continue to power the need for a cohesive solution that leverages data to inform strategies and prioritization.
Using a healthcare-specific capital planning tool will help advance strategies, and prepare facilities to accommodate patient care today and in the future.
Interested in advancing your capital planning? Contact the team at FSI to see how our solution can advance your processes.