Texas Health Resources

Michael C. Walker, EdD

Healthcare Infrastructure Modernizer

Healthcare and hospital facilities are some of the most visible buildings in a community. Typically perceived as community assets, healthcare facilities stand as beacons of hope, healing and reliability for healthcare consumers. People utilize healthcare facilities of all shapes and sizes, and if there is one thing healthcare consumers expect from these facilities it is high performance and reliability.

Continued demand on healthcare and hospital systems to relocate outpatient clinics and specialty services closer to or within communities of healthcare consumers is challenging and unavoidable. Keeping pace with an aging U.S. population is an arduous undertaking.

According to the 2020 U.S. Census, 1 in 6 people in the U.S. or slightly more than 55 million people were age 65 and over. In 1920, this age group included approximately 5 million people or about 5 percent of the U.S. population. The age 65-andabove population in the U.S. experienced rapid growth over a 100-year period, primarily due to aging Baby Boomers.

There is an interesting mix at play in the United States:

• Age 65 and older population is on pace to reach more than 65 million people

• Primary care office visits among seniors is expected to multiply

• An estimated 150,000 practitioners may enter the healthcare profession over the next two years.

The need to bring multi-specialty clinics, outpatient surgery centers, mental and dental services to the healthcare consumer market is expected increase as practitioners, healthcare and hospital systems strive to solve for the healthcare needs of patients across the nation.

Among healthcare/hospital executives and healthcare real estate experts, it is no secret that it is not possible to deliver new hospitals and medical office buildings to the market at a rate to keep pace with present and future demands for healthcare facilities. Even more, a good deal of the nation’s existing inventory of hospitals and medical office buildings are aging.

A recent study conducted by Facility Health Inc., revealed nearly 41 percent of healthcare facilities in the U.S. have exceeded their useful life expectancy. Central utilities, electrical, HVAC, life safety, emergency power supply and plumbing systems are old or outdated. These infrastructure systems are aging and were not designed to meet current code and compliance requirements which equate to:

• Higher annual operating costs

• Increased deferred capital maintenance

• The need for significant capital investment In simple terms, aging infrastructure systems among healthcare facilities in the U.S. need fresh wind to modernize and upgrade systems which will extend the useful life of these facilities.

The Problem

Upgrading existing infrastructure systems in aging healthcare facilities requires large amounts of capital financing and significant planning. Acquiring and operating healthcare facilities is very expensive. Healthcare facility managers and leaders understand the importance of facility systems reliability, while also knowing it is not possible to operate these facilities without carrying a certain amount of deferred maintenance within the facilities department.

The American Society of Healthcare Engineering (ASHE) unearthed in a recent study that capital investment required to address the current level of deferred maintenance in healthcare facilities in the U.S. exceeds $240 billion. Coupled with the reality of inpatient and outpatient volumes largely meaning the difference between financial glory or doom for hospital and healthcare system budgets; aging healthcare facilities and the level of deferred maintenance is eye-opening.

So, what is the problem? The problem is deferred maintenance accumulates at a faster pace than healthcare and hospital systems deploy capital to upgrade infrastructure systems. Deferred maintenance piles up as healthcare facility managers and leaders compete against other organizational capital priorities. Capital funding is, in fact, a competition not because facility management departments are out of sight out mind; it has more to do with the finite amount of available capital funding for deployment throughout healthcare or hospital organizations.

Let’s face it, the stakes are high where deploying capital is concerned, it could literally mean propelling a healthcare or hospital system toward fulfilling its organizational goals and objectives or sinking financial sustainability.

Moreover, underinvestment in upgrading aging infrastructure systems in healthcare facilities brings forth real effects, which:

• limit operational reliability;

• create capacity constraints;

• contribute to higher annual operating costs;

• limit adoption of new technology and innovation;

• cause difficulty in meeting current accessibility and code standards

The Opportunity

There is an opportunity before healthcare facility leaders and executives to achieve excellence by investing in modernizing aging healthcare facilities infrastructure systems. Taking advantage of this opportunity reinforces commitment to providing exceptional patient care in highly reliable healthcare facilities.

Aging infrastructure in healthcare facilities is a problem which requires collaboration among facility leaders and finance managers to develop and implement sustainable solutions that reduce the level of deferred maintenance in healthcare facilities and modernize building systems.

To some degree healthcare facility managers and leaders are tasked with becoming better storytellers who can accurately explain the problem, identify a solution and quantify a plan of action in terms finance managers and healthcare/ hospital executives understand and support.

Engaging in strategic initiatives to modernize infrastructure systems would reduce patient safety risks, improve financial sustainability, increase operational reliability and extend the useful life of older healthcare facilities. Seizing the opportunity to deliver high quality care and meet regulatory and compliance standards involves:

• investing in facility condition assessments to determine operational state, efficiency and remaining life expectancy of facility systems and equipment;

• prioritizing repairs and upgrades based on risks, financial returns and operational impact;

• focus upon strategic upgrade projects which include critical systems, adopting new technology and energy efficiency projects;

• enhance maintenance practices and methodologies—a shift from reactive repairs to proactive maintenance making use of facility analytics and equipment diagnostics;

• reform policies and procedures to support investment in infrastructure systems;

• invest in ongoing training programs for facilities management staff;

• design renovation projects that support integrated care models.

Aging infrastructure systems in healthcare facilities is both a problem and opportunity. Outdated infrastructure systems and obsolete facility designs do not meet the most basic expectation of healthcare consumers, clinicians and healthcare workers. The time to address the problem and opportunity is now.