Establishment of a national model for property and asset management
Transforming Healthcare Asset Management Through a Centre-Led National Operating Model
Grosvenor partnered with Australia’s largest private hospital operator to review and redesign its healthcare asset management operating model across 72 hospitals, developing a centre-led national property and facilities model that improved governance, reduced compliance and operational risk, strengthened leasing and asset systems, and delivered significant efficiency gains and cost savings. This project involved a detailed healthcare asset management review to ensure best practice outcomes.
Situation
The Client is Australia’s largest private hospital operator, operating around 72 public, private and mental health hospitals and day surgery units in Australia. The Client also operate alarge number of ‘out of hospital’ health facilities including retail pharmacies and other primary health care services. The hospitals largely operated as discrete business units, including managing their own facilities and assets. The variability of services across these hospitals had significant impacts on risks, efficiency and lost opportunities. 19 hospitals were partly or wholly leased, with a large number of tenants in most hospitals.
Task
Grosvenor was engaged to carry out a review of the alternative models for managing the Client’s property, facility assets and biomedical assets. The key objectives of the project were to:
- have a clear understanding of the current state across all sites
- ensure options and recommendations are scalable for the out of hospital portfolio
- drive incremental value (e.g. improved commercial outcomes through view of forward demand, improved commercial terms etc.)
- increase efficiency (e.g. free up time for hospital executives)
- decrease any risks (e.g. compliance, health & safety, sustainability).
Approach
Grosvenor reviewed all elements of the model for managing properties, facilities maintenance and assets, including biomedical assets. In this healthcare asset management review, the approach included:
- stakeholder consultations and consultations/visits and data collectionwith all 72 hospitals
- better practice comparison
- identification of improvement themes
- analysis and presentation of options and identification of preferred model
- preparation and presentation of report, business case and roadmap.
Recommendations and the roadmap covered:
- detailed current state analysis including for each hospital
- implementing a centre-led model with a National Property Team with onsite maintenance teams continuing to be managed by the hospital
- national Property Team to have responsibility and oversight for property strategy, leasing deals and critical dates, best practice in FM and asset management
- implementing a national asset management system
- collecting comprehensive asset data and implementing best practice asset management
- implementing a best of breed lease management system, and conducting a lease audit to maximise tenant revenue opportunities and minimise property rent and outgoings.
- more limited change to biomedical asset management and out of hospital property management.
Results
Key benefits included:
- reduced compliance and asset failure risks
- sustainability – greater achievement of net zero and other legal and moral obligations
- integrated systems and assets improving whole of life costs (and reducing risk)
- reduced effort associated with finding information including compliance audits
- resource efficiencies
- reactive maintenance efficiencies
- avoiding of wasted maintenance expenditure
- reducing prevalence of lost hospital revenue due to asset failure
- reduced wasted spend on installation costs from inappropriate selection of building systems / equipment
- avoiding shortening the life of assets (under maintenance can halve the life of a building – bringing forward complete refurbishment by as much 30years)
- $millions from increased rental returns (including outgoings and other tenancy costs to tenants) and reduced rent and other costs (including capex) withlandlords
- between $1.5-10 million in direct tangible savings.
It is clear that a thorough healthcare asset management review was integral to achieving these results. For organisations seeking similar improvements, conducting a periodic healthcare asset management review can help maintain excellence and compliance. Explore this for your organisation.
Start a conversation with Peter Macfarlane, Property Lead