As the healthcare landscape changes and puts pressure on hospitals' and health systems' bottom lines, many provider organizations are looking at cost reduction and consolidation of services to remain viable.
One opportunity hospitals have to achieve cost savings is by tightening their grip on real estate and facilities management. According to Johnson Controls, real estate is a hospital's third largest expense item, and operations account for 87 percent of the total lifetime cost of a typical healthcare facility. That said, tighter management of facilities operations can present large cost savings for hospitals and health systems.
However, facilities management isn't usually a primary focus for many hospital or health system leaders, who generally focus on patient care and clinical excellence, says Julie Kimble, vice president and general manager of Johnson Controls Global WorkPlace Solutions. By looking for a third party to take over healthcare facilities management, hospitals can focus on their core competencies and allow the outsourcing partner to do what they do best: "drive down cost and provide optimal facility environments for patient comfort," Ms. Kimble says.
Outsourcing facilities management has other benefits for hospitals and health systems as well. For one, it reduces risk for the system by passing along regulatory compliance to the partner. Also, according to Ms. Kimble, there is a "looming talent shortage in healthcare, particularly for facilities staff," due to many experts reaching retirement age and a skill gap with less experienced staff. However, she says a partner that focuses specifically on facilities management could bring "deep bench strength" and training necessary to bring the best staff to the hospital or health system.
Hospitals and health systems interested in outsourcing facilities management should consider the following three elements when looking for a partner, according to Ms. Kimble.
1. Ability to provide integrated services. When a partner offers integrated services, it allows a health system to have a single point of contact for many aspects of their facilities, which may include facility management, project management, real estate transactions and lease administration, according to Ms. Kimble. If the partner is integrated, professionals can assess new facilities from a real estate cost perspective and also evaluate the building's integrity and quality of construction, for example. "Real estate, project and facilities management professionals as one team provide for the most robust assessment for building assets that result in reduced risk and cost going forward," she says. It is especially helpful to incorporate real estate professionals, as it allows hospitals to consider monetizing real estate assets though sale leasebacks or other mechanisms.
2. Experience in the healthcare environment. If the partner is already experienced in the healthcare space, the hospital or health system can "benefit from best practices and innovation from across their healthcare experience," Ms. Kimble says.
3. An aligned culture. Ms. Kimble recommends spending time with a potential partner's leadership team and account team members prior to finalizing a relationship. If the cultures align properly, it will be a more cooperative relationship that can lead to greater outcomes and success.
For more from Ms. Kimble and Johnson Controls on healthcare facilities management, download this recent whitepaper.