Asset management for hospitals

Meeta Ruparel

In today’s scenario where economic levels and finances are of utmost consideration along with a goal to render quality healthcare, it becomes necessary to plan and follow strategic principles for value added services and superior asset management procedures.

This not only helps to evaluate procurement of new assets but also assists in evaluating the present condition of the prevailing systems and the need for redevelopment, if any, thereby providing a continuous improvement in performance levels. This can be implemented by conducting a methodological process of functional planning, asset review and site analysis, redevelopment planning and benchmarking.

The procurement of new assets is only one phase in the asset management cycle and so the preparation of a strategic asset management plan for new and existing assets is to be considered, including development plans, disposal plans, investment plans and maintenance plans in order to provide safe, functional and efficient assets. Such strategic plans are intended to ensure that that the overall costs of prevailing assets owned, is lowered, the level of assets held by the hospital does not exceed its service delivery needs and that the service potential of existing assets is maximized, and that the demand for assets/facilities is reduced by promulgating effective use of alternative solutions.

Factors involved in a strategic asset management plan

Functional plan: This identifies the objectives defined as a part of the strategic plan and the resources available to meet the health service requirements. This involves a region/area wide health service plan to define the role of healthcare centers/ hospitals in that region/area. This can be achieved by commissioning a functional plan that addresses the proposed role, type and levels of services/ facilities to be provided, the population to be served, and future bed requirements of a particular hospital. The functional plan should provide a review of the healthcare services needed and the resources available to the defined area and identify changes that need to be made to meet the ongoing healthcare service requirements of that catchment population. The bed strength, workload of respective specialties and sub-specialties can be defined by such functional plans to provide an accurate and detailed vision of the services to be facilitated.

Asset revaluation: Asset condition reviews should be conducted to determine buildings of certain significance value and conclude on structures that can be retained, redeveloped, modified, used for an alternative purpose or demolished. For such a review measurement tools like; structural condition, site analysis, condition of engineering systems, functionality, age and potential for modification/ alternate use for optimum functionality are to be considered. Such assessments assist in defining and justifying how effectively and efficiently the existing assets meet service delivery objectives.

Re-development plan: Here an exclusive plan best suited for the asset under consideration should be implemented to define total redevelopment cost, budget, PERT chart in terms of phases involved and time involved for completion of each phase. A justified implementation of each phase will always work to the benefit of an effective review and an efficient action plan. Whilst implementing such a plan, the ongoing operations of the center has to be considered and care should be taken that such plans do not mar any current process of service.

Continuous improvement: After an effective asset review and redevelopment of the prevailing systems (if any), it becomes equally important to maintain and upgrade the systems to walk with the latest trends to render services of an optimal quality. Using risk analysis techniques the necessary preventative maintenance, corrective maintenance or replacement needs can be determined. Estimates can be prepared for budget purposes over the life of the asset and its functional ability.

The asset management strategy should be made an integral part of the operational management in order to review the systems periodically for continuous improvement. This can be implemented by promulgating policies and procedure manuals to guide the preparation of asset registers, capital planning, service and maintenance planning for the hospital. The assessment criteria to be considered in such guidelines are; capital cost, recurring cost, functional ability and buildability of a particular redevelopment project.

The plan should be such that a balance is achieved between the capital cost, recurring cost and the functionality of an asset/ project. A report on the asset reviewed should maintain records such as; a unique asset number, the location, description, type and frequency of inspections and services, replacement date and cost, maintenance cost, required performance standards, etc.

Proposed investment plan: Capital investment is required when a particular asset is deemed as incapable of restoring optimal performance as required even after implementation of a maintenance plan. Such a plan addresses minor/major refurbishments, and asset replacements needs. An initial project evaluation including evaluation of alternatives is to be conducted and a capital works program, refurbishment program is to be established to analyze the functionality of an asset under assessment.

Demolishment plan: This plan identifies all assets that are no longer capable of being brought up to a standard to support the delivery of services or are surplus to requirements and thereby establishes a justified action of disposing off /demolishing such assets.

TQM & benchmarking: In pursuit of rendering excellence in healthcare performance measurement tools and processes like TQM are used to achieve operational efficiencies and benchmarking is used to achieve high level of quality standards. A process of reviewing and implementing new benchmarks regularly results in continuous quality improvement of facility management and optimal use of the asset.

Such a process is implemented by appropriate data collection, monitoring and analyzing the data to improve performance of assets and their management as an ongoing process. Data to be collected for such a process involves factors like:

• Type of hospital
• Facilities provided
• Active floor area
• Environment in which it operates
• Performance levels in terms of ALOS
• Hospital expenditure
• Energy costs
• Asset management report
• Facility management capabilities and costs
• Safety practices
• Replacement capital values
• Labour involved
• Other resources used
• Maintenance costs, etc.

Using such factors and deriving performance tools from the above collected data would result in analyzing and comparing the hospital performance with another hospital and also with itself over time for continuous improvement

To conclude, the objective to establish and implement a strategic asset management programme is to ensure that:

• The existing facilities are restored to an acceptable level and maintained to the defined standards.
• The capital investment in the assets is maintained consistent with time and the prevailing market value/ trends.
• Optimum application of funds is made through the establishment of maintenance plans based on risk analysis and service delivery requirements.
• Assets can be reused with new value added capabilities, with the help of minor or few changes or replacements for appropriate application of its maximum functional ability.
• Assets retain their capacity to support service delivery requirements.
• Establishment and development of performance measures is implemented through a rational and systematic approach to performance management.
• Regular benchmarking processes are implemented for continuous improvements in the functionality of the asset.

(The author is with Aum Meditec and may be contacted at meeta@meditecindia.com)