Insight Blog

Leaders in healthcare facilities management have seen a change in their roles during the past several years—and especially within 2020. As they experience elevating responsibility and accountability, they must adapt to the ever-evolving business model that exists in a healthcare system.

Even in the case of nonprofit organizations, there seems to be an emphasis on profit margins, and overall, a broader audience contributing their opinions about an organization’s operations.

These developments help shape the list of six trends outlined below.

More Target Audiences

No longer do facilities leaders only communicate with the staff members in their departments. They are often included in strategic planning and other major decisions, which can mean more interaction with senior healthcare executives. They partner with leaders of adjacent departments to collaborate on projects and, depending on how these projects affect patients and the community, they may interact with end users. Finally, with hospitals and medical centers at the forefront of the coronavirus battle, there has been increased media attention on a global scale; this means reporters and other members of the press may also communicate with facilities leaders regarding transportation, safety, security, cleanliness, and maintenance.

Mergers and Acquisitions

According to the M&A Quarterly Activity Report released by Kaufman Hall in October, 19 healthcare providers announced transactions related to merger and acquisition activity between July 1 and September 30, 2020. This reflects a 36% increase over the previous quarter. Anu Singh, a managing director at the firm that released the report, cites the pandemic as a catalyst for the formation of some strategic alliances. He predicts that ongoing financial pressures will strengthen the need for partnerships. 

A later report from Deloitte states that the top ten largest health systems now control nearly 25% of the market share. Smaller organizations, however, may also rely on M&A activity to diversify their service portfolios and offer more care options. This could involve reconfiguring existing facilities into specialty care centers and managing a greater number of campuses in a larger geographic area.

Investment by Private Equity Firms

A gloomy article published in May by Bloomberg Businessweek was titled, “How Private Equity is Ruining American Health Care.” Since 2015, private equity firms have invested more than $10 billion in medical practices. Their goal is often to see an annualized return of 20-30% within a five-year period. The piece surmised that as investors pressure physicians to hit financial marks, patients could suffer. Although the American Medical Association prohibits corporate ownership in many states, investors can buy “nonclinical” assets. Doctors continue to make medical decisions, but the new owners control administrative—and likely facilities—operations.

End User Influence in Design

Health Facilities Management Magazine recently published an article about integrating patient technology needs into facility design. It explained that patients are often moved within a campus to receive treatment instead of brining the treatment to the patients. The current pandemic has forced the use of technologies at a rapid rate. Where safety and daylight remain design priorities, architects and planners may expand their visions to focus on the patient experience, which includes visiting family members and their interaction with staff.

Technology can improve wait times, collaboration among specialists and departments, and even virtual care for real-time consultations with professionals who are offsite.

Patient Safety: The Joint Commission

While patient safety has always been a priority, and The Joint Commission has been in existence since 1960, the pandemic prompted new protocols for healthcare settings. The organization continually teams with representatives from the federal government and several other healthcare associations to address timely issues. This includes use of PPE (personal protective equipment) for staff and patients as well as ventilators and nasal oxygen for patients. 

Some Facilities departments appoint a director or leader of Joint Commission and/or environmental readiness. In fact, Helbling completed a search for that exact role several months ago. The responsibilities include developing policies and procedures to maintain environment of care standards and to manage hazardous material transportation as well as to provide compliance training for other system representatives.

Emphasis on Real Estate Portfolios

When economic times are tough, most organizations review assets, particularly real estate holdings. Square footage and functionality are two items to consider. There is often an opportunity to consolidate office space by centralizing billing or other administrative functions. This may present the chance to sell office buildings outright.

Likewise, it can be a good time to review clinical operations that are temporarily suspended due to their “nonessential” functionality. By renegotiating lease terms within existing structures or even relocating practices, organizations can experience a significant cost savings. This is also a key time to reconfigure space that will accommodate the growing number of professionals offering “telehealth” consultations. 

If you would like to connect with a Helbling search consultant about these trends or other observations within healthcare facilities, please contact us.