3 Surprising Ways to Save on Operating Costs in Healthcare Facilities

By: Gabriel Fernandez, director of management, national healthcare

Healthcare real estate needs are rapidly changing (especially since the onset of the COVID-19 pandemic) as the industry works to become more convenient, accessible and affordable to patients. As staffing shortages continue to drive labor costs, many organizations are seeking ways to save on real estate costs, as highlighted in our recent survey of healthcare professionals conducted with Modern Healthcare Custom Media. In fact, 32% of respondents said their focus on real estate strategy has increased since the onset of the pandemic and another 29% said that it remains just as high.

Deferring building maintenance may be a tempting first step in cutting costs—as reflected by 13% of our survey participants but can be a costly mistake. In healthcare settings especially, every room is designed for specific purposes and used regularly. Postponing maintenance can quickly lead to high labor rates, costly last-minute replacement parts, and scheduling and procurement challenges. In fact, the hidden costs of deferred maintenance are typically two to four times more than preventative maintenance.

Here are several more effective methods to save on facility management while keeping operating costs down so healthcare organizations can focus on what they do best—taking care of patients:

Sustainability: Keep it simple

Sixty-six percent of survey participants indicated that sustainability is of mid to high priority for their organizations, and, when done correctly, many sustainable efforts can lead to cost savings. Unfortunately, it’s common for organizations to move from highly motivated to overwhelmed by the sheer number of choices and opportunities. Thankfully, there are plenty of straightforward efforts with short return periods that don’t require a lot of extra work, like these:

• Lighting and water efficiencies are often standard practice and simple enough to upgrade in existing facilities. Think LED fixtures and bulbs, daylight and motion sensor lights, low-flow toilets and auto-sensor faucets. Also, Energy Star now offers a score for medical office facilities to track your progress.  
• Waste management programs enable organizations to recycle or otherwise keep items out of landfills. Donating electronics can often be done efficiently and at no cost while training your staff on what is not considered bio-hazardous or medical waste, diverting waste to less expensive forms of removal. 
• Energy-saving practices, installing or reprogramming lighting timers and enabling auto-sleep functions to all computers and medical devices making a considerable difference in energy usage while also keeping devices readily available for use.
• CPACE loans allow commercial property owners to borrow money for energy-saving efforts and then make their payments through their property tax bills.

Efficiency:  (Re)Evaluate Services, Processes and Procedures

Our teams call this one smart sourcing—evaluating  operational responsibilities to determine if they are best handled in-house or outsourced. While handling many tasks within the organization can save money, many times the opposite is true. The right real estate management professionals can help you select the right vendor or handle tasks more efficiently and effectively, often through automated processes with few people involved. For example, our teams have software systems that allow us to   process invoices, cut checks and post the entries to the general ledger in a matter of moments for our clients. That same process in a healthcare system may require multiple departments and approvals.

Just because a process is working, doesn’t mean it’s efficient. Environments are dynamic and every organization can benefit from regular evaluation of procedures and processes, which can often lead to cost savings. For example, a healthcare facility built as an ambulatory surgery center is commissioned for higher volumes of air exchanges.  If that facility is later repurposed to a primary care site, rebalancing the HVAC system can save on heating and cooling costs.

Safety: The Environment of Care

Maintaining a safe, functional and supportive environment is essential in healthcare and for many organizations that are required through regulatory compliance. Healthcare facilities generally have longer operating hours than standard commercial facilities placing excess wear on equipment. Downtime is simply not an option.  

• Keeping key Components in Stock is essential in today’s market, where material shortages and high labor rates can complicate last-minute part orders. Having a thorough understanding of the market environment can help determine what facility system components should be kept in stock or readily available, staying ahead of expensive emergency situations. Mechanical systems, for example, often have parts which are difficult to procure, but can easily be stored. An experienced facility management professional can help determine which parts are vital to your systems, manage inventory and create a robust predictive and preventative maintenance plan.

A trusted real estate management partner like Ryan Companies can go a long way in navigating these facility management cost savings and finding the best steps for your particular healthcare system. Learn more about what we offer.