This article was written for the purpose of challenging hospital administrators whom as a result of rising energy, liability and capital budget costs are trimming maintenance operations budgets or keeping them at current levels. If you are a hospital facilities engineer be sure to put this on the top dog’s desk for them to read.
Should Rising Operating Costs Equals Maintenance Cutbacks (Catch-22)
Being of sufficient age to have visited and stayed in a hospital a time or two over several decades, I have seen a lot of changes come about. Many changes are technology based and improve the diagnosis and care of patients. Others are process or design improvements on assets that have been used for generations such as lighting, HVAC and backup generators.
During this time I have also seen gas prices go from 25 cents per gallon to over$ 4.00 per gallon – over a 1600% increase. Most of this was in the last decade. Unfortunately, rising oil prices increases the costs of power and hospital utilities.
Hospital Maintenance Opportunities
Rising energy and labor costs have unfortunately led to the erroneous belief that hospital maintenance departments only spend money. This presents an opportunity for hospital administrators to re-educate themselves on how good maintenance management can actually increase profitability.
“In a typical hospital, lighting, heating, and hot water represent between 61 and 79 percent of total energy use depending on climate, making those systems the best targets for energy savings”
Source: Nationalgrid
The two areas to recognize opportunity are internally and externally handled maintenance:
Internal Hospital Maintenance
Hospitals rely heavily on machinery and power to provide services. Assets are typically stored in a designated part of the hospital and identified for the part of the hospital facility it is being used for. If the machinery breaks down then that part of the facility goes without until the equipment is repaired.
Typical hospital maintenance assets include:
- Boilers
- Chillers
- HVAC
- Backup generators
- Rigging and hoisting
- Plumbing and water filters
- Kitchens
- Motors
- Pumps
- Lighting
It doesn’t take a brain surgeon (pun intended) to realize that the assets listed above are either high dollar assets and/or require substantial energy to run.
It also makes sense that proactive hospital maintenance to minimize downtime, reduce major repairs and capital budget replacements as well as optimizing energy usage should be a high priority.
External Hospital Maintenance
External hospital maintenance includes any maintenance or repair that is outsourced. For some assets such as elevators or cleaning services, maintenance may be contracted. In other situations, maintenance and repairs are outsourced when either in-house staff does not have the skill-set to handle or after a problem has been discovered.
Outsourcing maintenance only after a problem has been discovered is the most expensive form of reactive maintenance. Preventive maintenance and inspections can prevent a disaster.
A good example of this is emergency roof repairs. Not only will the roofing contractor charge a premium but think of the liability if water starts dripping on patients.
“Age and exposure to the elements invariably cause roof deterioration and eventually roof failure. As a result, implementing a preventive maintenance program to diagnose major roof problems before they occur is critical to extend roof life, protect roof warranties and significantly reduce emergency repairs.”
Source: PSI Roofing Restorations
The opportunity is to manage vendors and contracts so that proactive hospital maintenance is being performed before a disaster occurs.
Proactive Solutions with Hospital Maintenance Software
Without proactive maintenance planning and execution hospital maintenance departments are indeed a pure cost center. On the other hand, with proper maintenance planning and execution, maintenance operations becomes an opportunity to see dramatic cost savings freeing up capital needed to compete in the age of technology.
The solution is to make use of new technology such as an EAM system with its core CMMS features to manage the entire lifecycle of hospital assets as well as provide the tools for proactive maintenance.
Implementing an EAM hospital software solution enables hospitals to lower maintenance operating costs and obtain direct savings for:
EAM Cost Savings for Hospitals
- Energy: Energy usage is by far and away the largest hospital operating cost. An EAM software solution will ensure equipment is being maintained and running properly both internally or externally to optimize energy usage and lower hospital carbon footprints.
“Lighting (25 percent) and HVAC (45 percent) are the largest parts of a typical hospital’s energy bill. Both areas present opportunities for significant savings. For example, regular evaluations and tune-ups to the HVAC system (costing 4-20 cents per square foot) have been proven to cut those costs by 10-15 percent”
- Repairs: The CMMS tools provide proactive scheduling and tracking of maintenance functions such as preventive maintenance, inspections and work order management. Unplanned repairs are minimized, lowering labor costs as well as asset repair costs.
- Capital budget expenditures: Better maintenance and managing assets over their entire useful lifecycle means that they will not need to be replaced as often.
- Liability: Fewer equipment failures and increased asset uptime along with an accurate record of work history mitigates liability suits resulting from asset neglect claims.
- Contract and document management: EAM features provide for digitalization of documents such as contracts, blueprints, schematics, photos etc. to reduce the time and costs of document retrieval.
The key to realizing that rising costs should not mean maintenance cutbacks is understanding that technology is now available that can manage assets on an enterprise level. Rising costs and a weak economy is an opportunity to invest resources in hospital maintenance software such as an EAM system.
Implementing an EAM system can return a savings between 15-30% in addition to lowering capital budgets which is far more than an EAM system will cost. This avoids a catch-22 scenario.
Tell us what your hospital will do with the extra savings. If you liked this article you may also enjoy reading.
