Reducing operations costs through outcome-based facility management

Dale Swanson and Dan Stone

Facility management has traditionally been task-based and preventative. However, today’s healthcare climate demands that facilities be intrinsically tied to a hospital’s mission. Improving the efficiency of operations – either through innovative design or performance upgrades – lays the foundation for better patient care and improved health.

Outcome-based facility management holistically approaches all systems within a facility and proactively addresses concerns before they arise. Outputs are measured and results are compared against established benchmarks; constant improvement is the key objective.

Outcome-based management

To truly adopt an outcome-based model, hospitals need to redefine the value of facility management. This starts not by calculating costs, but by measuring the potential impact of a system failure. Any downtime resulting from an extended outage, for example, will severely impact the hospital’s ability to execute its mission. Proactively managing hospital facilities improves patient experience, reduces hospital-acquired infections and increases hospital performance.

All systems, whether mechanical, technological, or human, have outputs that can be measured. The key is to leverage technology to capture useful information that can drive changes to improve a system’s performance. Rigorous and continually revised key performance indicators allow for benchmarking and progress reports.

Outcome-based facility management protects and enhances revenue streams while minimizing risk. Though many outcomes define a successful healthcare operations program, most can be separated into three general categories:

Maintenance management

An effective maintenance program and proactive personnel training ensures that all equipment and systems are maintained and supported in a way that minimizes the potential of unplanned failures.

Response management

Planning for potential failures before they happen is critical to immediately and appropriately responding to failures when they occur. Develop procedures and execute drills that make people take action.

Financial management

Forecast the costs of running the plant operation in a predictable and financially responsible manner by referring to benchmarks of similar facilities and through peer reviews. Consider performance-based vendor management, meaning the vendor is measured against the same metrics expected by regulatory agencies. Finally, forecast variance reports and if the end costs ends up being over, or under, look at the root cause for lessons learned.

Asset management solutions that take a proactive and holistic approach upend the traditional tradeoff between reduced costs and improved performance.

Reconsidering value

Transformative organizational change comes from small daily actions. Appropriately valuing these first steps sets the stage for long-term benefits.

Investing in new technologies and refined processes leads to less time spent by administrators, executives and maintenance staff fighting fires that could have been avoided. Revenue is protected, costs are kept down and patient care is improved. Overburdened executives gain peace of mind in knowing that their systems are covered by a proactive facility management approach.

Positive patient outcomes and satisfaction are vital to hospital success. An active outcome-based facility management program will yield major rewards as administrators drive toward these key goals.

Dan Swanson and Dale Stone are part of the integrated healthcare team at McKinstry. They can be reached at or

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