Healthcare Facilities Network
The Healthcare Facilities Network podcast highlights the essential role of facilities
management in delivering high-quality patient care. Hosted by Peter Martin, this show brings you expert insights on the issues, trends, and solutions shaping the future of healthcare spaces. Learn from industry leaders and discover ways to drive positive change in your facility.
Healthcare Facilities Network
IFMA Facility Support Services Benchmarking Survey discussion, with author Steven Call
High Reliability, The Healthcare FM Podcast is brought to you by Gosselin/Martin Associates. Our show discusses the issues, challenges, and opportunities within the Healthcare Facilities Management (FM) function.
In a show that is repurposed from our Healthcare Facilities Network, we welcome Dr. Steven Call, Assistant Professor at Washington State University and the Founder of Built Environment Resources. With a focus on healthcare facilities management, Steve has dedicated his career to discovering and innovating concepts and tools to address the most critical issues impacting healthcare facilities management.
Steve's expertise and authorship were instrumental in the creation of IFMA's recent "North American Medical Center Facility Support Services Benchmarking Report." In this episode, we discuss the survey, specifically:
* Research challenges
* Laundry, FTEs, and square foot comparison
* Aging infrastructure and deferred maintenance
* FTE calculation
* The best predictor for an accurate FTE count
* Comment on salaries and staffing
* Compliance as a percentage of facility management budget.
* Benchmarking concerns and capital planning
* Changing expectations for FM leaders
* Utility expenses by location
As always, thank you for listening.
The following is a presentation of the Healthcare Facilities Network. Hello, this is Peter Martin. Thanks for watching this video. Just wanted to give a quick plug for a recruitment that we are doing at Southeast Georgia Health System in Brunswick, Georgia. It is for a Director of Facilities Management, so if you are interested in the opportunity, you can click this QR code, send me an email, or at the conclusion of this video, we have a link to a video we did that describes the opportunity at Southeast Georgia Health System. So two ways to connect. Number one, QR code. Number two, watch the video link at the conclusion of this episode. As always, thank you for watching and now on to the show. Hello and welcome to the Healthcare Facilities Network as always. Thank you for clicking on this video. I would like to introduce my guest who is back for the third or fourth time, Dr. Stephen Call from Washington State University. Steve, welcome to the show.
SPEAKER_01:Thank
SPEAKER_03:you. Thank you. We were just joking beforehand that we both have our blue road uniforms on for the game today. So we didn't even do any type of coordination. But if you've not heard Steve before in the past, he's an assistant professor at Washington State University. He's also founder of Built Environment Resources. Dr. Call has dedicated his career to discovering an innovating concept and tools to address the most critical issues impacting the built environment with a distinct focus on health care, facilities management. He has conducted a great deal of research into the world of healthcare facilities management, both from a salary perspective and as we're about to talk about here from an operations perspective. He also has a background in healthcare facilities management. He has worked in hospitals and systems as a director of facilities management. So he comes at this from a very well-rounded perspective. Steve, did I miss anything?
SPEAKER_01:No, no, thank you. Yeah, I think this is maybe my third time on the podcast. So it's always a pleasure. And my goal is always to just provide some information that can help healthcare facilitators. So glad to be on.
SPEAKER_03:And you always do. And I'm going to link to it at the conclusion of this episode. But the last time... Steve was on, it was a show called On Salaries, Infrastructure, Deferred Maintenance, and ROI. Pretty creative title. I tried to catch everything you talked about. But anyways, you can find that on our YouTube channel. That was released in November, and that was two episodes. But we're here today to talk about your new research that has recently been released within the last, what, two to three weeks?
SPEAKER_01:Yeah, I think it's been about three weeks now.
SPEAKER_03:three weeks now. And so it was the North American Medical Center Facility Support Services Benchmarking Report. I was trying to get a better, I couldn't, I saw a number of different titles. So is that what you're calling it?
SPEAKER_01:Yeah. So if you think about the, actually the first iteration of this report, most healthcare facility leaders are aware of, and that was the 2010 2013 facility benchmark report. Many call it the ASHI report. But the reality is ASHI and IFMA actually collaborated on that report for the first couple iterations. And then IFMA has continued to to provide updates to that report. Most recently here, just a few months ago, and then I think in 2020, there was another updated report. So this is just another iteration of that original healthcare facility benchmarking report. And as we progress in these benchmarks, again, we're trying to add some new insights and some new areas, for example, This one now is including information on FTEs and expenses for clinical engineering, for example, which has never been captured before. So the title of it is Medical Center Support Services because it's not just facility operations or plant operations, it's including EVS, it's including laundry, it's including biomedical engineering, even some construction components. So we thought that was probably a better title to capture kind of the broad, benchmarking information that, you know, as a facility manager, we wear multiple hats. And so it says support services. It also says medical center because it's not hospitals. Hospitals are part of the medical center, but there's a lot of other buildings within that campus that we're also trying to capture. So it was, you know, a little bit unique in the name, but that was the idea of capturing what this report really entails.
SPEAKER_03:I find it's always difficult to name things, kind of this environment. Sometimes there's different nomenclatures. People call things by different names. You're trying to capture a lot. You know, you did a lot. So sometimes I find that just naming things is one of the most difficult challenges. It
SPEAKER_01:is. You're trying to name something where people understand what it is, but also be true to, you know, the... the actual information, but yeah, it's part of the fun. Yeah. And
SPEAKER_03:since it's North America, obviously United States and Canada hospital, hospitals and medical centers.
SPEAKER_01:Yeah. Yes. US and Canada. We actually have some, for the first time, we actually have some international data. So if you're in Europe or Asia and you're just trying to get kind of a really high level benchmarking information, we actually have an appendix to the report that, that's unique in that area. But limited responses in those areas. So we didn't provide a lot of information, but really robust data and information for North America.
SPEAKER_03:How many hospitals are captured in here? Do you recall?
SPEAKER_01:Well, we have over 200 medical centers across the US and into Canada. Now, keep in mind that those 200 medical centers on average have eight to 10 facilities. So there's about 2,000, you know, data from about 2,000 facilities in this report.
SPEAKER_03:That's a lot of facilities.
SPEAKER_01:Yeah. Yeah. Some good information.
SPEAKER_03:Yeah. When did you begin working on this report? I know when we spoke in October, November timeframe, you were finishing up, couldn't talk about it a lot, but when did you start for this particular iteration?
UNKNOWN:Yeah.
SPEAKER_01:uh i think this was started the data the research project was started in summer of 2023
SPEAKER_03:okay
SPEAKER_01:so we started pretty pretty heavy into data collection we had a really great advisory team that supported it folks from some of the largest medical centers around, you know, the VA, MD Anderson, Common Spirit, Banner Health. So it was a really great, a lot of credit goes to those individuals that really helped support and drive this forward. So it happened, got a lot of good information and analysis happened pretty quick. So it was great.
SPEAKER_03:So I do want to ask you obviously about the findings of your survey, but from a process perspective, when you do something like, you know, when you conduct this type of research, what are some of the challenges that you face conducting the research?
SPEAKER_01:A lot of it is just trying to get enough data or enough information to have some statistically valid information to share. We only get two or three responses. It would be impossible for us to say, well, we can broadly make some broad assumptions based on these two hospitals. It's just impossible. So we want to get enough enough responses and enough robust responses because maybe a hospital or a medical center only provides information on plant operations, but we don't get anything on EVS or laundry. And so we're trying to get a high number of responses, but also a complete data set of responses from folks. So that's usually the hardest. Look, we're all very busy. Nobody wants to spend hours taking a survey. Um, you know, so those are usually the challenges, but like I said, the advisory team through our, our, our network and I've been around for, for, for a long time. I know, I know some great folks. So it was, you know, calling a friend and say, Hey, can you, can you provide us some information? So that's usually the biggest challenge when it comes to, um, generating this, this type of research. And then again, I guess, secondly, I would just say understanding what you're trying, you know, developing the survey, to make sure you get the information you're wanting so that you can have a report that's beneficial.
SPEAKER_03:You mentioned that laundry was covered in survey. I was interested to hear you say that. Are most organizations outsourcing laundry? I know it's not the sexiest thing in the world, but it just stood out to me. What's going on with laundry? What'd you find?
SPEAKER_01:Yeah, so... Most healthcare, you know, most facility managers have either they do it internally or they outsource their laundry and linen. Most healthcare facilities are contracting that work out, but they usually have, whether it's a separate department, usually a lot of times it's baked into the EVS department and they have a couple departments. folks that are, that are dedicated to that. But yeah, most of that work is, is not done in house as far as the actual cleaning of the, of the lender. I mean, they're, they're bringing, they're handling it and distributing it throughout the hospital, but that's primarily been more and more of an outsourced activity.
SPEAKER_03:Yeah. Yeah. So what did you, you know, I just want to, I'm going to read something that you wrote in on your LinkedIn profile back in the summer time. You said, my summer was spent developing a 2023 medical survey benchmark report sponsored by IFMA. In addition to updating staffing and operating costs for facility engineering and EVS, the report includes new information to better support the built environment. And you mentioned four things, facility infrastructure, capital renewal benchmarks, cost of deferred maintenance, compliance as a percent of maintenance costs. I saw what that percentage was. I'm sure we'll get to it. That was intriguing to me. And- compensation expenses in relationship to staffing levels. So I guess, Steve, within those four little buckets of information, what did you find that was surprising or eye-opening for you or just revelatory that you think for the people listening?
SPEAKER_01:Well, as I mentioned earlier, trying to develop surveys to gather data that can actually produce reports that can be helpful. There was always a couple, I'll maybe start, I'll try to address all four of those, but there was always a gap In the previous reports, and one of those gaps was we could predict or show, okay, this is what my FTE numbers should be for my facility engineers based on gross score footage, whatever it might be. But the challenge is we never had data that showed compensation. So it was very difficult for me to say, well, yeah, maybe the benchmark says I should have 10 facility engineers. But I have 15, but how do I know that I'm just not spending significantly less on my outsourcing costs? And so it evens out. Even though my FTE levels are higher than my peers, I'm actually overall saving money because... And so that piece was never there. And so now we have data that shows not only this is what your compensation expense should be for your staff, this is the actual number And it also shows your contract expenses. So between those three, you can really paint a true picture of, is my facility program, is it running efficiently? Does it have the right number of employees? Are we spending the right amounts? And so that's a new feature that we can now compare to make sure we're comparing apples to apples between what we're doing and what a different organization is doing. The other big issue is aging infrastructure. That's a topic that I think we're going to continue to hammer over the years within hospitals. We just have not had the capital resources to stay on top of that aging infrastructure. So we've got growing deferred maintenance backlogs. And so this was enough to say, historically, we've always tracked Our operation spending, how much should I be spending on maintenance, on utilities? But the other question is, how much should we be spending on capital renewal? Not on growth, but on just the renewal of the existing infrastructure. What does that number look like? And so that's a new finding as well to show, hey, there's a real annual cost that we should all be budgeting for our capital renewal. We all know we need that, but now we actually have some information that can support that. Tied into that is deferred maintenance. So now the data can help support facility managers in developing business cases to reduce their deferred maintenance because, for example, it's three to four times the cost to eventually address deferred maintenance than it was originally. So, for example, if I had a roof that needed to be replaced that was a million dollars and I say, well, I don't have the capital, I'm going to defer that. Eventually that ends up costing three to four times more than it would have just to address it right when we needed to address it. So you think about developing those ROIs that we can then communicate the need for that capital money. This information, this report is helpful for that. So I think, yeah, go ahead.
SPEAKER_03:Within that deferred maintenance, Steve, did you break that down by component? By like building, you know, if you got a route, you know, by the building envelope, by infrastructure, how did you break that apart? I mean, that's a big nugget.
SPEAKER_01:Yeah, it is not broken down by building systems. So it's just generally how much our hospital spending or should be spending every year on capital renewal costs. Now, exactly how that's broken up, like 10% goes to roofs and 5% goes to parks, that's not included. Now, we do that for operating expenses. We know what percent is going to different areas within our plant operations. But this was really the first attempt to just say, just for budgeting purposes, what's the number? So that's what it provides.
SPEAKER_03:Yep, yep. And relative to going back up to talking about the aging infrastructure and the cost, how did you... How did you define, I guess, did you define it just by the infrastructure's years past useful life? How did you attempt to put some definition around defining aging infrastructure?
SPEAKER_01:Well, again, this is benchmarking. So we're just taking an average of what folks are currently spending on capital renewal and say, on average, this is what folks are spending. Now, there's an argument to be made that well, we all feel like we're not probably spending enough. And so even though that benchmark is available, arguably we could say, well, it's probably still lower than it should be. But for a benchmarking perspective, it's interesting to say, well, this is what other peer hospitals are doing as far as their annual renewal expense. So that was part of the survey to ask that question. How much are you spending on capital renewal, et cetera?
SPEAKER_03:And I know that you obviously can't, divulge everything. Cause you know, at the end of the day, you're also, if you're selling a product and that's certainly understandable, but I, if, so if I ask you something, you can't answer, feel free to say, Hey.
SPEAKER_01:Yeah. And let me mention, let me mention, yeah, this, this, this report is available for anybody to purchase. It's at the IFMA bookstore. I, I, I want to say it's around$250 for the report, but it's a great report. And if anybody's interested, you just can go to the website and purchase it.
SPEAKER_03:I've got the one from 2014 right over there in the bookshelf. You go to it all the time. It's a good resource. It's well worth the investment. Did you find, and again, I have to tell myself it's a benchmarking report, but relative to the aging infrastructure, are organizations, I'm assuming they're behind in their renewal, but were you able to come to any determinations on that in that regard?
SPEAKER_01:Yeah. So yes. So we, we, we did ask, I think we found that approximately 50% of hospitals are in a state of deferred maintenance. Okay. Meaning they have, they at least have some significant amount of money that, that they have, that they need to address their deferred maintenance. So about half the hospitals are experiencing that in the U S.
SPEAKER_03:Is that a high, your opinion? Is that a, Is that a high number? Is that what you expected to see? Did you have expectations? It's high. It doesn't seem as high as maybe I thought it might be.
SPEAKER_01:Yeah, you would think, oh, you know, every hospital's dealing with this as far as referred maintenance. But no, I think there are a lot of hospitals that have adequate resources And there's a lot that don't. So I do think there's a have and a have not situation right now with a lot of medical centers. That's why I think you're seeing a lot of mergers, for example, just because this lack of capital is sometimes driving these needs to merge and continue to be viable.
SPEAKER_03:Did you get a lot of responses from, or a lot, how do you define a lot? But did you get responses from like, critical access or community hospitals or any of those rural hospitals that we figure are suffering for a number of different reasons? Did you get responses and were you able to determine anything?
SPEAKER_01:Yeah, that specific question, you know, to say, hey, is deferred maintenance an issue more for rural hospitals than it is for urban hospitals? That I probably can You know, find that that's not necessarily in the report. Now, that's something we could probably dig out for the data. But I don't know the answer to that as far as, you know, which of these types of hospitals. I will say I'm just looking at the report now that, you know, the breakout as far as the response, we had about 60 percent were just general acute care patients. And then about 25% was specialty acute care with some military and some academic teaching. So we didn't, I don't think we had enough responses from a robust data set up from, these are rural hospitals versus urban to break that data out on the report. But that's something that, good question, Pete. Maybe we can chat after the call and I can get that to you.
SPEAKER_03:You have enough going on.
UNKNOWN:Yeah.
SPEAKER_03:Going back to the FTE, the very first thing that you mentioned, and I mean, you know this because you do all your research and you're involved. The FTE issue is always a massive one. So I would just say, let's say one FTE for 40,000 square feet if it's a new hospital, one FTE for 75,000 square feet. I mean, the other way around. Old hospital, 40, new hospital, say 70. So your benchmarking that old calculation, whatever, that's kind of removed. Can you talk a little bit about the measurement and did you find any determination, and maybe this wasn't your intent, if you keep insourced, was there a savings by insourcing versus outsourcing to subcontractors and the like? Did you determine anything?
SPEAKER_01:Yeah, to answer your first question, what I've What I always found curious when we were, you know, early on and when folks were benchmarking FTEs is I always had the questions, how do we know that that metric, so typically area or growth score footage, how do we know that's actually correlated to FTE? I mean, so the way to think about that, just pick any metric in the hospital, you could use, you know, the number of nursing staff. How do we not, how do we... what if our FTE was more aligned with the number of nurses or what if it was aligned more with the number of beds or patient days, right? There's all these different metrics to say. And so nobody had really ever looked statistically to say, yes, there is a statistically significant association to those metrics. We've always just kind of used gross per footage, but a lot of healthcare facilities kind of had heartburn about gross per footage, for example, because it's saying, well, it's not really fair to compare myself to an outpatient facility growth score footage versus an inpatient facility because there's all of these additional complex equipment and such. So that's when I started originally doing some of the research to say, where can I show these ties? So what I found was the strongest predictor or the strongest association to FTEs is actually is actually driven by the value of the assets within the facility. So that can be determined by something on the balance sheet that's plant property and equipment. So the value of that building and those assets is what's really driving it. So the more expensive, the more comprehensive or complex that medical center is, it's probably gonna require more FTE to maintain it and troubleshoot and those sort of things. So that's kind of a key finding. This is previous to this report, but now this report's showing, yeah, it still shows gross score footage, but it also shows current replacement value. It shows patient days, it shows admissions, and it does actually show site population. So if we have a total population of staff of X, then we can actually predict what our maintenance staff will look like. There's a number of metrics that you can look at. Maybe your CFO has really said, I only care about patient days or I only care about admissions. That's fine. Now we have a metric that can be used to then make sure we're selling the value of this report.
SPEAKER_03:That's interesting. So you've broken it down by a number of different areas that a facilities person could use to hopefully satisfy the CFO and what they want to see.
SPEAKER_01:That's the idea, yeah. And most importantly, like I said, that asset value is what's driving it. So there's options here. The other example is if you're in a hospital, for example, that's more outpatient or a medical center that has more outpatient space, you might... You might not want to use bed count, for example, as your metric because it's gonna under-represent the real cost of your facility. So you kind of have to think about, okay, well, what I like to do is I like to look at all of the metrics and kind of see how they play out because you're gonna see variations in all, primarily just because the different structure of the hospital and also there's a little bit different association between the metrics. So it's a little bit more, I think, progressive way to look at benchmarking.
SPEAKER_03:Yeah, yeah. And I'd imagine, too, kind of along those lines, you were talking about with the medical center that's got a lot of outpatient, but then if you've got a lot of outpatient on the outskirts and your folks are traveling back and forth, that's obviously going to play into your calculation as well.
SPEAKER_01:That will. And I will say on this report, we intentionally did not include, we really tried to say what we're looking at is our traditional medical center campus, and that campus typically includes has about 10 facilities, obviously usually has a standalone hospital with some outlying outpatient buildings, et cetera, because that's a question I get sometimes. What about the clinics that are 50 mile radius around and how do we benchmark those? And I don't have a really good answer for that because we haven't really been successfully captured the data, but this report's really looking at traditional medical center type environment.
SPEAKER_03:Did I hear you say, and I know it had been measured in the past, can you talk again to the relationship between more complex equipment and number of FTEs? Did you find that you need more FTEs when you have more complex equipment? What did you determine?
SPEAKER_01:Yeah, so it drives FTE count and it drives operating expense. So the higher value of that asset you're going to be able to predict higher levels of staffing and higher levels of operating expense. So there's a direct correlation between the value of the asset and what we're experiencing as far as FTEs and operating expenses.
SPEAKER_03:So more complex equipment, I was thinking about it in terms of more complex equipment, more ability to automate and to, I was thinking like of, you know, a BAS where you have a person sitting there. That's not necessarily a correct.
SPEAKER_01:No, when I say complex, I'm typically talking, I'm just kind of painting the picture about why a more complex medical center. So think about maybe a, maybe a, you know, a pediatric hospital that maybe has, you know, more complex, more robust medical equipment. And so that value of those assets, whether it's medical equipment or the facility or whatever it is, that value is what we're finding has a very strong predictor to our FTE numbers and our operating expenses.
SPEAKER_03:Okay. Gotcha. Gotcha. Relative to the FTE, and I'm Only focus, and I think you said you prefer the, you like looking at a number of different data points, but is there one that you find more valuable than another, or it's just dependent on the facility you're measuring?
SPEAKER_01:So as I said, the plant property and equipment values, which is a number that's found in the balance sheet of an organization, which is really saying this is the value of the asset, the value of the physical asset, It's showing that it has the strongest predictor to FTEs, to operating expenses. And what's beautiful about that metric is it also typically addresses whether you have a very small hospital or a very large hospital. It doesn't seem to deviate much. When you look at gross score footage, for example, you find that when you go into smaller or even patient days. So some of the early reports, like in 2010, 2013, they had adjusted patient days as their primary metric. And what we found is in smaller, more rural hospitals, it actually had zero statistical correlation to FTEs and operating expenses. So that's why a lot of smaller hospitals were kind of scratching their heads saying, these benchmarks just don't seem to align. It's because it had no relationship. So pick any metric you want. I talk about here in the Pacific Northwest, number of pine trees. You know, we laugh about that. Oh, what if I use the number of pine trees, you know, per FTE? I mean, in some senses, that's exactly what was happening with some of these metrics because they had zero correlation to operating expenses. So the plant property equipment values or current replacement values is a really strong metric that holds its association regardless of location, of size. So it's a really great metric.
SPEAKER_03:I know you've done a lot of research into salaries. You've produced a lot of information. Did this particular survey go into anything relative to salary? It
SPEAKER_01:didn't break down salaries by level. No, it did provide a holistic view to say, this is how much you should be spending on your, you know, your EVS department should be expecting this number as far as your total compensation. So it did provide that. It didn't say, well, you know, if you're a manager, you should be paid this. And if you're a, you know, a technician, it doesn't break it out that level. It also shows specific to that. It does show a breakout in the facility engineering It'll show a breakout by role. So it'll show of the 50 FTEs that I'm saying I should have, what percentage of those should be mechanics, what should be plumbers or carpenters or HVAC techs. It does break it down by that level of detail.
SPEAKER_03:How did you determine that?
SPEAKER_01:Uh, again, it's through, it's through surveys. So, you know, the hundreds of hostels, we've said, well, what, what percent of your staff is our carpenters or what percent of your staff are HGC? So when we, when we average those things together, that's what we found is, is, is we could accurately and reliably predict, okay, this is kind of the breakout traditionally. And again, again, it's a benchmark. So yeah, you might have some variation, uh, with, within your group, but it should be You know, if you're seeing this huge difference, like I, based on the size of my hospital, I'm showing I should have two carpenters and I have 15. Then you start saying, ah, okay, what's going on here? If you have, you know, if the report says you should have two and you have one, okay, you know, that's nothing to be worried about.
SPEAKER_03:Now, I have to keep reminding myself that you did a benchmarking survey and you weren't doing a trending survey, but you've done a lot of research and I'm sure you can't turn your mind off. Did you find anything, though, when you were looking at staffing, size of staffing, anything that kind of, you know, a light in your head and said, oh, that's really interesting just based on what you know about the industry?
SPEAKER_01:Yeah. What I found interesting, I guess I will say, was something new we did was understanding a portion of facility engineering work group by shift, for example. That's never been looked at. So to say, well, OK, previous reports said I needed 20 facility engineers. Now we can actually show, oh, well, this percent should be at first shift, this percent at second shift, this percent at third shift. So there's just some, it wasn't surprising, but I just thought this is really helpful, I think, for facility managers to say, there's some real value in this information. So that was one area I was kind of proud of to say, I think we've really addressed some gaps in those previous reports. The one thing I'll back up to one of your early questions about this compliance issue. So what was surprising or interesting? That was always a topic that I've heard at various ASHE conferences. And as I've met with facility leaders around the country is, you know, we're really getting a lot of pressure for a lot of budget pressures. And when it comes to compliance issues, If a CFO says, hey, I need you to cut your budget by 10%, you can't go cut your compliance budget by 10%. You can't do that. And so what I think folks were looking for is to say, well, if you tell me to cut my budget by 10%, I can't cut my compliance budget. So the other areas of my budget is going to be cut by 15% because I'm compensating. And so we were able to determine, I think it was about 25% of your maintenance budget is compliance. So that's helpful now because, and again, I had no idea. I really had no idea how that was going to play out, what it was going to look like. But yeah, 25% of your budget is compliance. So now again, you have a little, some real data that you can go back to your, potentially to your budget group and say, look, I know you want to cut X, Y, and Z, but we can't cut compliance. So You know, really, you're asking probably more than I can handle. Right. So it's just that that's helpful, I think, for any facility leaders that have that in power with that information.
SPEAKER_03:It is. And so they actually I found that online where a portion of maintenance expense by category reactive was 31 percent preventive. You had 41 and then compliance was I'm going to ding you by one percent, 26 percent. Yeah. So you were close. You were close.
UNKNOWN:Yeah.
SPEAKER_03:Yeah, it would be interesting if, and you've got it in this one, so now you can measure it going forward, but historically, I wonder what that number had been for compliance. It would be interesting to compare over the years as there's such a focus on compliance and regulatory and risk. I have to assume that number is rising?
SPEAKER_01:Yeah, again, so now that we're tracking that, I'm assuming, I hope that further iterations will continue to track that so we can, again, look at those trends and say, well, actually, we're seeing the portion of our maintenance costs is growing in compliance, for example. You also mentioned reactive, right? I think we all pride ourselves on being very preventative, but the reality is there's still a huge portion of our maintenance costs that are reactive. So that's another trend I hope we see dropping to show, hey, we're becoming less reactive, we're being more predictive. So that would be a goal I'd like to see.
SPEAKER_03:Relative to the compliance portion of it, are you able to, or were you able to break it down again, benchmarking survey, but how much is in-house versus out-house or out-of-house spending for compliance?
SPEAKER_01:We show what portion of your overall budget, not specific to compliance, but just specific, like what portion is going towards contracted expense, We also show what portion of our workforce is outsourced versus in-house. So you can say, okay, I can kind of understand that mix. So we have management to staff mix to understand, hey, you know, what... what percentage of my program should be management versus staff. And we also look at that as a portion of our workforce that are contracted. And whether that's biomedical or facility engineering or VS, we show that information.
SPEAKER_03:Getting back to the, you were talking about the shifts and the three different shifts. So were you able to break it down that first shift is more on the reactive second shift predict kind of the PMs and the work order management. Were you able to find anything like how people compose those shifts and what they do on those different shifts?
SPEAKER_01:No, no, sorry. Yeah, we didn't dig into that detail to say, well, what's actually happening? And that's a great question. But this is what's helpful, Pete, is what's fun about this is people get this report and they say, ah, you know, did you get this information? I said, well, no, I didn't. I take a note and the next iteration, we try to dig into that because this is the beauty of this is we're trying to help the industry move forward and we're trying to help people answer questions. So I love these types of questions that I get from people to say, hey, did you dig into this? And sometimes I say, no, I didn't, but we'll try to get that next round for sure.
SPEAKER_03:Well, I got to imagine too, from like a process, like once you define what you want to do, again, you're not working in a vacuum and you're not new to the industry. You must see these different tangents, but you must just stay focused on that mission for this, right? Because you can't go all over the place because you'd never complete anything.
SPEAKER_01:Yeah, and there's a fine line with benchmarking because we want it to be easy, reliable, but easy to use. And we don't want this... you know, 50 page report that gets confusing. So again, you know, we're always trying to find that balance between good information that's helpful without getting too much, you know, the academic side of things that can like, here's so much information that's not useful. Like we really, we really try to shy away from that. At least, you know, that's my goal. And I think we've, we're getting better and better at that. And again, besides my own background, we had an advisory team of folks, and they're recognized in the report as well, that I reached out and said, hey, what's something you'd like to know? What's not been captured before? And so we got a lot of that feedback before we developed the survey to make sure we were trying to capture the right information.
SPEAKER_03:From both a positive surprise and maybe a a concerning type surprise. Was there a positive benchmark that you found and one that was kind of a concerning benchmark?
SPEAKER_01:I'm looking at the report right now to see if I can... So the area that I was most excited about to learn was really this... issue of deferred maintenance or aging infrastructure because it's such a big topic that nobody's really ever benchmarked that before. So yeah, it was concerning to me when I saw that there was a high level of deferred maintenance. It is costing us three to four times the amount that it probably should if we just had the money available. But what I, so I'm concerned about that. And also most of the time there's an unplanned shutdown. It's because it was in deferred maintenance. It wasn't, you know, there's all these shutdowns that are happening is because we're not being proactive and we're putting them in deferred maintenance. So not only is it costing us more, but it's also most of the time it's impacting revenue as well. So we don't necessarily,
SPEAKER_03:go ahead. I think that's where you were just talking. I was gonna say, were you able to quantify that?
SPEAKER_01:Yeah, so we actually show, well, we weren't able to say, well, it's this dollar amount, but we were able to say most of the time a shutdown occurs, it's impacting revenue. So not only does it cost us three or four times more, but on top of that, we're losing revenue. So even though this is kind of a negative in that we're showing, wow, deferred maintenance is really costing us a lot of money, There's a positive spin to that to say, well, now we actually have data that can support us in developing a business case. Instead of just kind of saying, hey, we're all really nervous that, you know, something might, you know, something might shut down and we really, you know, this boiler is really on its last leg and it's all, you know, historically, it's all been kind of quantitative or qualitative. We don't feel good about it. But now we have real dollars and cents that facilities leaders can use to now compete, right? Because there's limited capital. And so we're competing against a lot of times revenue generating proposals to say, hey, if I buy this new MRI, we're going to see this ROI, right? Now we can actually compete on level ground with those type of capital requests because of the data that we now have.
SPEAKER_03:Yeah. Yeah. So this is, excuse me, this is information that a director can take right up to the CFO and tie it directly there to a cause.
SPEAKER_01:I think that's the beauty of it. Yeah. So it's information that can now be used to develop capital requests that can compete fairly with an ROI attached to it, to other assets.
SPEAKER_03:I don't know if you mentioned this, and I don't know if it was part of it, but did you do anything relative to, did you do anything, you didn't do enough, Steve, do more next time. I don't mean it that way at all, but relative, did infrastructure, aging infrastructure, renewal, anything from like a capital planning perspective included in the survey?
SPEAKER_01:Well, absolutely. So when you talk about capital planning, saying, well, how much, you know, based on our size, on our, whatever metric you want to pick, right? Beds, replacement value. Based on whatever metric, there's a benchmark now saying, well, this is how much you should be spending every year in capital renewal, right? It's not operating expense. It's just in a renewal. So I should be, you know, based on the hospital, I should be spending X number of dollars on, you know, on capital renewal to make sure I'm not falling into a state of disrepair. So facilities can use that now to say, hey, capital planning, I know how much, at least based on a benchmark, I should be spending every year. So it's really helpful in that sort of area.
SPEAKER_03:I know it wasn't part of your survey, but whether it be anecdotally, did you find that our facilities folks, so I guess I'm concentrating more on the facilities, are they getting pulled in different directions than in the past? Maybe more kind of like on a real estate component or on a sustainability. We all know that there's so many priorities and the priorities are increasing. So I guess what I'm asking is, are you able to determine, are they doing more kind of outside of their core functions?
SPEAKER_01:Yeah, this survey didn't necessarily touch on that, but just anecdotally, and I would say The industry is maturing. I will say the expectation of what a healthcare facility leader does, it's changing, right? The expectation is it's becoming more of a strategic partner for the business as a whole. Now, whether we're adequately responding to that through our development of our own skills and delivery of those things, that's to be determined. I think that's some of our biggest problem is the industry is really demanding this, right? They're demanding folks that understand sustainability, that understand operating processes, that understand real estate strategy. Whether we actually are developing people that can do that, I think that's part of the issue we're having within Within workforce development is we can't find a lot of kind of more senior level people that have that robust background just because historically how we've kind of developed and and you know trained our folks to be so dedicated to the kind of the operation of the hospital that that we really need to start. preaching that. Now, that's not to say that that's not very important, but that's my feel on that. I guess that's the
SPEAKER_03:topic. And you've done research into that as well. A little bit, yeah. Yeah, a little bit. I want to ask two more questions, be respectful of time here. I guess relative to FTEs, are you able to tell, is FTEs, and you're not looking at it as an issue, but any concerning trends around FTEs, I guess, Are people being more outsourced? Are people not being replaced? Is FTE count concerning? Or it's not concerning?
SPEAKER_01:Yeah, and that's something, again, this is the first time we've looked at contractors as a percent of workforce. So that's an answer that I hope we could have maybe next time we do this report is to say, what trend are we seeing? Is outsourcing becoming more prevalent? Yeah. I don't know that yet. I mean, we definitely have kind of a snapshot of the current state. I don't know if that's good or bad, but again, if you have the report, you could look at that and say, well, that's interesting. My staff is different or it's the same, I don't know. But that's something that hopefully we can start tracking is to say, how is that affecting what we're doing? So not only, and I can't remember actually the top of my head, but I think we have portion of outsourcing as a percentage of management, not just, you know, technical staff. So of my management team, you know, what percentage of that is outsourcing? Because that I believe is becoming, that's really the potential area where outsourcing is becoming more prevalent is on the management side of the equation.
SPEAKER_03:So would that be Outsourced to like a Croftal or Sodexo or CBRE, any one of those third parties.
SPEAKER_01:Typically, yeah. That's really what we're seeing is it's more of those larger facility services groups that are potentially making inroads. We don't know, right? Because we just have that data now. So we'll see how that goes over the years.
SPEAKER_03:Interesting. You must love this. Do you enjoy this?
SPEAKER_01:Yeah, I do. I do. I love it because... I think one reason I got into this area was because I saw so much opportunity to help move the industry forward because there was so much missing research. And again, it all started when I would go to these ASHE conferences year after year after year, and they'd say, We're all getting old, look around, look at all the gray hairs. And I'd sit there thinking, oh, great, who has the answer? And then we moved on to talking about boilers and chillers. I thought, gosh, we know this is a huge problem. Why isn't anybody, and I think things were being done, right? Oh, let's do internships or let's do this. But nobody actually looked at the data to say what's really happening and what is the data showing that can really help And so now, whether it's workforce planning or whether it's aging infrastructure, whatever topic it is, my goal and my passion is developing research that can actually be applied in the industry to help healthcare organizations be successful.
SPEAKER_03:And what is usually a time length between, like, you've talked about a next area. How long do you usually have to give that before you... survey again to to be able to assess kind of trends and to have the info still be valuable is there is there a length or is it whenever it happens
SPEAKER_01:yeah i you know um i don't know if i have the answer that my my feel is you at least i wouldn't say more uh every year would be too much i think yeah every every other year would probably every two to three years is probably the sweet spot You could argue something like COVID, for example, like pre-COVID, post-COVID, like that will be in there. Like, okay, something dramatic has happened. We should be analyzing. So that would be an example where you might try to make them a little closer together. But yeah, historically, you know, this information has not been kind of routinely updated. So IFMA has really made a commitment to do that to help the industry. So I'm excited and we'll hopefully keep doing this every couple of years.
SPEAKER_03:Yeah, if you think about it, I mean, you know, 2014 was the ice ages now. It's just everything. Everything.
SPEAKER_01:Yeah, yeah. I mean, costs have gone crazy. And again, this is what we're trying to say is, if we're still looking at 2014 as our, as our basis for how we're generating our budget. we're really hampering, you know, hurting ourselves. So this information can be really helpful.
SPEAKER_03:I think even just taking your FTE data and data and breaking it apart, you know, not by square footage, but by that number of different ways, that's helpful in and of itself, because that's always the question. Am I appropriately staffed? Well, what are you using as a metric? Is there anything Steve and Dr. Stephen Call, Assistant Professor, Washington State University, were talking about the North American Medical Center Facility Support Services Benchmarking Report that you've done for IFMA, and I'll put a link to it in the video. Is there anything I should have asked you about or anything in the report that you'd want to get out before as we leave? Any interesting research or anything I should have asked you that I didn't?
SPEAKER_01:I think you've asked some great questions. The only thing I, kind of what's interesting about this report, what we find interesting, I will say it may be surprising, but when we looked at utility expenses, for example, when we looked at utility expenses across the nation, we actually didn't find a statistically significant difference on location. So whether you have a hospital in Michigan or a hospital in California, if you're looking at costs, There's no significant difference between a hospital in different parts of the country. So that's really surprising to folks. It's like, what do you mean? How can, and I think it has to do with, you know, just, this is my own guess, but the data shows that there's no significant difference. Yeah, there is some significant, you know, there's some difference. There's, you know, five or six cents or whatever. There's some difference. But what, for example, California, you know, utility consumption is probably lower but costs might be higher. And in Michigan, costs are lower, consumption's higher. So it kind of evens out, I think. I think that's the explanation. So historically, we've always said, okay, well, I need to know, I need to find, okay, I'm in Michigan and now I'm in this region and this is my cost. We found that you can just use a simple predictor number and poof, you've got your data regardless of where. Now, I did go ahead and include that in the report because I think there was a lot of like, wow, we've never done that before. So I still allow that. You can search by your region and your state and find your cost. But I found that really, really interesting that that's how the kind of the data played out.
SPEAKER_03:Yeah, no, I would agree. I mean, cause you always look where I am, you know, the Northeast, it's more expensive. You're going to pay more. So that's an interesting finding.
SPEAKER_01:Yeah, it was, it was. And so what that does, it just makes it easier. It just makes it easier. And again, I guess one last thing I want to say is This is, as we mentioned, this is a benchmarking tool. Some folks want benchmarks to tell them exactly what, you know, this is exactly what my FTE count should be. This is exactly what I should be spending on, on utilities. And benchmarking is just simply an estimate based off of a number of factors. It tries to say, am I in the ballpark? Am I 10 to 15% within my peers? If I am, I should be happy with that. If we really are trying to figure out what am I, what am I, What should I really be spending? That's a process that should be done through the CMMS and understanding what my actual costs are. But Benchmark is beautiful because it's reliable, but it's very easy. So it's a really good place to start.
SPEAKER_03:Yeah, yeah. And even I could use it going through those pages, and I'm sure this is even easier for you. So, Steve, thank you for your time today. I appreciate it. You're welcome. It's always a
SPEAKER_01:pleasure.
SPEAKER_03:My pleasure too. So go and buy the IFMA survey. I'm going to link to it. So if you want to get in that survey benchmark, you've said benchmark how many times and I'm calling it a survey. Dr. Stephen Call, thank you for your time. Peter Martin for the Healthcare Facilities Network. As always, thank you for tuning in and we will be back in the future. Have a great day.