Making the Argument for Asset Management in Healthcare

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Making the Argument for Asset Management in
Healthcare

• Examining the Cost-Savings Potential of
  Implementing a Centralised Asset Management System

Presenter Michael Kwok, P.Eng. MBA Vice
President, Professional Services October 28, 2009
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Todays Agenda

• Introductions
• Trends and challenges in facility capital
  planning
• What is a Centralised Asset Management System
  (CAMS)
• Benefits of CAMS
• Case Studies
• Ottawa General Hospital
• British Columbia Ministry of Health
• Q A

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About VFA

• Leading provider of software and services for
  facilities capital planning and management
• Established 1998
• Headquartered in Boston, MA, USA
• Canadian subsidiary HQ in Vancouver
• United Kingdom subsidiary HQ in Reading
• Integrated solution combining
• Facility assessment services
• Capital management software products
• Business consulting services
• 400 clients in healthcare, government,
  education corporate markets
• VFA software used to manage over 400 million
  square metres

• Representative Healthcare Clients
• Ontario Ministry of Health LTC (CDN)
• British Columbia Ministry of Health (CDN)
• Saskatchewan Ministry of Health (CDN)
• Central Health Newfoundland (CDN)
• Ottawa General Hospital (CDN)
• Kingston General Hospital (CDN)
• London Health Science Centre (CDN)
• U.S. National Institutes of Health (US)
• U.S. Navy Bureau of Medicine Surgery (Global)
• U.S. Army Medical Command (Global)
• U.S. Indian Health Services (US)
• New York-Presbyterian Hospital (US)
• Kaiser Permanente (US)
• Sisters of Mercy Health System (US)
• Tenet Healthcare Corp. (US)

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Trends Impacting Healthcare Facility Management

• Continued cost pressures
• Increased regulatory compliance
• Need to support critical operations
• Renewed focus on infrastructure and technology
  investments
• Underfunded over last decade
• Through 2010, 75 of U.S. hospitals expect to
  increase capital spending annually by average of
  14 HFMA

Nearly half of hospital CFOs surveyed by the HFMA
reported their infrastructures were deteriorating
faster than they could make capital improvements.
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Capital Asset Management Systems (CAMS)

• MANAGE Projects
• Create manage work orders
• Real-time project reporting

• COLLECT Maintain Facility Information
• Condition
• Functional Adequacy
• Inventory
• Renewal

• DEFINE Capital Projects Plans
• Annual and Long-term
• Renewal, Maintenance, Construction, etc.

• ANALYZE Facility Data
• Priorities
• Benchmarks
• Funding scenarios

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COLLECT Maintain Facility InformationAsset
Inventory and Condition Evaluation

• Compile facility data
• Include photographs and CAD drawings
• Create detailed descriptions of assessment
  findings
• Develop detailed cost estimates
• Estimate replacement values, deferred maintenance
  and lifecycle costs
• Industry standard data (e.g., R.S. Means)
• Classify data for decision support analysis

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COLLECT Maintain Facility InformationInclude
Sustainability in Condition Evaluation
Condition
Lifecycle
Code Compliance
Functionality
Efficiency
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COLLECT Maintain Facility InformationA
Centralized Repository of Asset Data

• Centralized asset database provides holistic view
  of the portfolio
• Common terminology and platform
• Data hierarchy based on organizational hierarchy

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COLLECT Maintain Facility InformationA
Centralized Repository of Asset Data
Common database prevents silos of information,
and allows the organization to use the same data
for both strategic and tactical requirements
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COLLECT Maintain Facility Information Building
System Data

• Plan the information you want to collect prior to
  assessing sites
• Consider all required assets - both vertical
  utilities

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COLLECT Maintain Facility Information Asset
Requirements
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ANALYZE Facility Data Establish Priorities
Crosstabs of Requirements By Category and
Priority/Asset Name
Region 13 Campus West Campus Asset Name
Timberlake Building
Priority Description 1 Currently Critical 2
Potentially Critical 3 Necessary - Not Yet
Critical 4 Recommended 5 Does Not Meet
Current Standards
Category-Priority 1 2 3 4 5 Total Air/Water
Quality 0 0 0 6,836 0 6,836 Building Code
Accessibility 0 0 471,020 0 118,875 589,89
5 Building Code Compliance 46,028 393,498 0 0
227,534 667,060 Building Integrity 802,691 1,2
19,480 1,699,412 4,630 0 3,726,213 Energy 0
0 0 43,637 0 43,637 Functionality 0 112,904
136,187 161,308 1,521 411,920 Hazardous
Materials 0 0 0 0 146,626 146,626 Life
Safety 33,581 0 0 6,364 3,716 43,661 Total
882,300 1,725,882 2,306,619 222,755 498,272 5
,635,848
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ANALYZE Facility Data Understand Impact of
Funding Options
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ANALYZE Facility Data Understand Impact of
Funding Options

• What-if analysis allows various funding scenarios
  to be evaluated
• Industry-standard Facility Condition Index
  enables benchmarking

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Applications

• Now That You Have It
• What Can You Do With Your Data?

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Asset Information Management

• Dashboards provide critical overview of
• Portfolio value and conditions
• Funding needs
• Key indicators such as FCI

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Scorecards Analyze Against Evaluation System
Point Levels forLEED-EB OM Certification 34-42
Certified 43-50 Silver 51-67 Gold 68-92 Platinum
Potential Level for Certification
Certified
348,993
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Portfolio FCI Comparisons

• Quickly understand condition ranges
• Compare building types across regions /
  portfolios
• Review asset or system condition variations by
  location

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Capital Budgets Ranking

• Prioritize all needs based on organizational
  objectives
• Produce multi-year budgets

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Project Planning

• Assemble capital improvements into efficient
  projects
• Combine individual projects into multi-year
  capital plans

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Interface with Facility Management systems
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Advanced Portals
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VFA Enables a Compelling ROI

• Increased Flexibility to Respond to Change
• Reduced Waste in Capital Projects
• Reduction in Annual Material Costs
• Reduction in Emergency Repair Premiums
• Reduction in Overall Project Costs
• Avoided Costs of Relocation
• Avoided Costs of Shutdowns
• Avoid/Targeted New Construction Build
• Resource/Usage Optimization

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• Case Studies

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The Ottawa Hospital

• Profile Overview
• Academic Health Sciences Center University of
  Ottawa
• Partner in healthcare delivery in the Champlain
  Local Health Integration Network (LHIN)
• Serves more than 1.5 million people in Ottawa and
  Eastern Ontario
• 1100 Acute Care Beds
• 130,000 Emergency Visits
• 51 Operating Rooms
• 12,000 staff, 2000 physicians and 1200 Volunteers
• Budget of approximately 600 M

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Physical Infrastructure

• Three Campuses
• Civic Campus
• 2.0 M square feet
• 18 buildings developed from 1920 -1980s
• General Campus
• 1.7 M Square Feet
• One integrated building developed in 1980s.
• Riverside Campus
• 300 K Square Feet
• One integrated building developed in 1980s.

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Facility Management Overview

• Aging Infrastructure
• Many buildings over 60 years old
• Facility condition varies across campuses
• No consistent documentation/updates
• Past assessments were focused
• No overall view into all infrastructure
• No analysis tools to understand data or
  proactively plan where investments should be
  made.
• Lacked fully integrated plan
• Capital and associated operating plans were not
  fully integrated
• Difficult to prioritize and develop long-term
  plan
• Master Plan Development no quantifiable data to
  develop business plans/cases to renovate or
  replace infrastructure.

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New Approach

• Comprehensive Facility Management Tools
• Facility Condition Assessment Tool (VFA)
• Detailed assessment of all infrastructure - 5
  categories.
• Quantifies investment required in each category
  and provides Facility Condition Index.
• Development of 10 year plan.
• Work Order Management System (TMA)
• Ongoing preventative maintenance of assets linked
  to VFA/Capital Plan.
• Allows for integration with labor/operating plan
  management.
• Space management tools
• Link assets to locations in space management
  module.
• As Built Documentation
• Essential link to VFA and TMA tools when
  implementing capital development projects and
  renovation projects.

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Benefits and Challenges

• Benefits
• Complete infrastructure picture and planning
• Good reporting functionality.
• Prioritization of investments - impact of
  deferred maintenance.
• Integrates well with other facility management
  tools.
• Master Planning
• Internal 25 year capital plan
• Business case assessments - Ministry Submissions.

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The Future

• Standardized provincial Facility Condition
  Assessment Tool
• Facility Blue-Print
• Benchmark comparisons (FCI Indicator)
• Prioritization of investments within
  organization/region
• Operational benchmarks and planning linked to
  Facility Condition Assessment tool
• Systems integration one integrated platform

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Sample Clients
The British Columbia Ministry of Health
Services
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British Columbia Ministry of Health Profile

• 30 million square feet
• 500 sites
• Complex, mixed portfolio
• Project started with one region (pilot) and
  scaled to six regions in a 4 month period
• Health care special requirements (e.g. infection
  control)

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British Columbia Ministry of Health Approach

• Multi-stakeholder steering committee
• Legacy data
• Multiple team deployment
• Use of local partners
• Visual inspections modeled assets
• Scheduling flexibility required
• Type and ownership of data
• Proactive project management

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British Columbia Ministry of Health Results

• Support capital renewal needs
• Standardized assessment methodology and
  centralised database
• Track changing condition of facility elements
• Benchmark, forecast and track hospital conditions
  and expenditures
• Accurate, consistent, actionable, secure and
  conflict-free data
• Performance standards and targets for facilities
  conditions
• Secure access to assessment data and reports for
  users

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Questions?

• Michael Kwok, P.Eng. MBA
• VFA, Inc.phone [phone]email
  mkwok_at_vfa.com