How Healthcare Facilities Are Losing Money “Behind the Wall”
In the endless effort to boost revenue, many healthcare organizations reserve their dollars for high-visibility, high-ROI areas, postponing or cutting corners in hard-to-see facility improvements—only to learn delaying those investments multiplies costs in the long run. Not only that, but the practice puts the organization’s compliance, patient safety and experience at risk—not to mention reimbursements.
It’s both tempting and common for hospital leaders to feel they can get by just fine without performing a facilities repair, maintenance or upgrade they perceive as low-visibility and low-priority. After all, who really sees all the stuff happening behind the walls, underneath the floors and other unseen parts of the facility, right? Surely, those deficiencies can wait a few months, maybe a year or two...
And, for a while, this approach works. You free up some cash, nothing bad happens for a time, and everyone’s content, until small issues snowball into an unavoidable, expensive crisis.
Other times, the hidden issue that’s been shelved for months remains out of sight and under the radar, until a regulatory surveyor calls it out as a violation and gives you 60 days to fix it, per The Joint Commission’s newly compressed timelines.
Have you ever tried to solve a problem that’s been festering for a while, within a cramped timeframe, driven by a sense of urgency and doom? If so, you know the price tag shoots up, not only because damage has spread, but also because you need to bring in outside help. Vendors will sense your panic, scramble to meet your timeline and you will end up paying a hefty price for it.
There’s yet another danger in neglecting “behind the wall” investments: failing to normalize costs. Few things can botch your budget numbers as badly as failing to normalize costs, keeping them consistent from year to year, close to your benchmarks. By the time deferred maintenance gets to the critical point of repair, the expense for the repair runs the risk of being so costly it should be considered a capital expense. Typically, a capital expense requires the buy-in of multiple stakeholders, which takes time – time that a major repair likely does not have to wait. Which means the repair costs will hit the operating budget, skewing that data and destroying your benchmarks which, in the long run, could affect reimbursements.
By contrast, there is strong evidence proving that routine preventive maintenance extends the life of your facility, equipment and other facility components, yielding dramatic savings in the long run. Similarly, keeping your spend consistent from year to year benefits your bottom line.
The good news? You have a much bigger opportunity within reach that’s both proven and sustainable in cutting costs and boosting efficiencies: Take a hard look at service contracts, and explore what can be brought in-house at a much lower cost.
We’re talking about replacing a service contract with skilled, in-house technicians who can perform the same services (and more), faster, at half the cost. Then doing that again with more and more contracts, gradually shrinking your dependence on high-dollar, external service contracts.
It’s how we’ve helped hundreds of hospitals, clinics, ambulatory surgery centers, and off-site medical office buildings save millions while actually upgrading their facilities—not just once, but year after year.
Interested in how this might work? We’ll let you in on some of our methods in our complimentary guide, Tools for the In-House Model
. Download now and don’t hesitate to drop us a note
if we can clarify anything.
Medxcel Facilities Management enables healthcare providers to optimize their facility assets, systems and in-house capabilities, while reducing expenses. Built by and for healthcare, Medxcel Facilities Management’s solutions are being implemented in Ascension Health facilities nationwide.