Reconsidering Inpatient Infrastructure Expenditures

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October 30, 2014  |  Charlie Hall

As the healthcare industry continues to evolve, many organizations struggle with the inherent conflict between cost-effective care and aging/overbuilt acute care facilities. Will reform improve patient care? Absolutely, but only if it creates a well-coordinated delivery system with facilities that are efficient and competitive. In this series, we discuss principles to guide investment in inpatient environments.

For decades, consulting engineers have upgraded and replaced MEP equipment under the assumption that patient volumes will continue to grow as they have for the past 50 years. In light of the forces shaping the future in healthcare, providers must reconsider the infrastructure dollars spent on inpatient units.

A strategy that combines peak census analysis with the selective use of deferred maintenance may allow an institution to delay investment in older patient units until there is more clarity around the timing and direction of inpatient volumes. To determine the degree to which a facility can forestall capital investment, a facilities infrastructure study should identify the following:

PEAK CENSUS ANALYSIS
Historically, architects calculated the number of inpatient beds and operating rooms based upon peak census. Even though inpatient bed need can flex 10-30%, the highest end of that range dictated the size of most units. Given today’s disinclination to overbuild, we now recommend fewer beds in conjunction with better discharge protocols, flexible observation tactics, and enhanced scheduling efficiency. Minimizing infrastructure costs allows hospitals to redirect capital investment to other needs.

LONG RANGE USE POTENTIAL
Organizations should evaluate and prioritize the long term potential of inpatient units, surgical departments, and diagnostic space. Even though inpatient space may have the shortest remaining lifespan, the future may reveal that lower utilization rates and lessened infrastructure burdens suggest minimal investment.

DEFERRED MAINTENANCE RISK
Replacement costs for MEP equipment nearing the end of its functional life and the risks associated with deferring maintenance costs are important considerations for hospitals. One might choose to delay maintenance on air handlers that support the Administration suite and reprioritize those funds for the Surgical Department or Lab based upon risk of failure.

FreemanWhite uses a Facility Condition Index metric to evaluate this risk. The FCI is the ratio of the “repair needs” to “replacement value” expressed as a percentage. A low FCI is an indication of newer, low-risk maintenance items, while a high FCI indicates imminent failure of deferred items. As part of this metric, FreemanWhite considers the critical function of the deferred systems. For example, maintaining a life safety system component should take precedence over maintaining a non-critical system one.

One key to effective decision making is having a complete understanding of costly facilities infrastructure. This is often a challenge for large hospital campuses comprised of various building ages and infrastructure. Depending on the amount of deferred maintenance and infrastructure age, the cost to replace or upgrade could be as high as 1/3 to 1/2 of an organization’s capital availability. Placing the right information, clearly depicted and ready for interpretation, into the hands of decision makers in a timely fashion is paramount.

ABOUT THE AUTHOR       Charlie Hall PE QCxP   

outcome_Charlie Hall

Charlie Hall is skilled in complex healthcare campus engineering infrastructure and works effectively with architects and other engineers to integrate engineering systems into the total project design. His expertise in commissioning gives him a holistic view of complex systems, maximizing the potential for energy savings on our projects.

Have a question for Charlie?  charlie@freemanwhite.com

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