Outsourcing can lead to costs savings, operational efficiencies and core competency focus.

By Sydney Scarborough

Outsourcing facility and real estate services can be of immense strategic advantage to hospitals and health systems. Outsourcing, sometimes referred to as shared services delivers a vast range of benefits, including reduced costs, streamlined operations and better facilities management.

Equally as important as the financial operational benefits, outsourcing allows hospital leadership a greater ability to focus on its intended, core competencies. With property, plant and equipment comprising nearly 50 percent of most health systems’ assets, the scope of outsourced services may include standardizing and optimizing building operations, energy and sustainability systems, purchased services, leasing and lease administration, clinical and biomedical engineering, and labor/workflow management.

The top 10 reasons to outsource are:

10. Improve the quality and productivity of the workforce
Partnering with an experienced real estate firm can significantly enhance and intensify the quality of the operations workforce and the quality of their work experience. Industry leading training, competency testing, technical mentoring and goal-setting enrich the work environment and translate to a more satisfied workforce with multiple professional growth opportunities. The bottom line is a boost in productivity, and enhancement of employee recruitment and retention.

9. Deploy the latest systems faster, with less cost and risk
Computerized maintenance management software (CMMS) and other systems are a proven way to reduce facilities costs and increase efficiency. But the time, expense and risk involved to select and implement such systems can be daunting – or even prohibitive. Partnering in these areas can provide faster, more cost-effective, less risky access to all the latest tools and technology.

 8. Obtain better metrics/performance measurements
A major firm can also provide access to all of the latest performance measurement tools. Leveraging a real estate partner’s existing, proven platforms allows healthcare executives to clearly see inefficiencies and make strategic, wide-reaching, beneficial decisions that significantly impact the bottom-line.

7. Comply with documentation more efficiently and accurately
An astute partner can deploy at team of skilled professionals to keep up with regulations, manage life safety equipment, complete CMS validation surveys and ensure compliance with time-consuming but mandatory documentation.

6. Reduce risk through principal supplier relationships
Shedding the risk of real estate and relying on the experience and industry savvy of a qualified partner can significantly mitigate unknowns. There is intrinsic monetary value to this knowledge.

You don’t know what you don’t know, and the experiential data an experienced partner provides pays off exponentially. Having a partner in the know about the local and national real estate markets can significantly reduce that risk.

5. Delegate energy managementfor savings and sustainability
Trained, accredited energy and sustainability professionals can provide the experience, credentials and know-how to enable healthcare providers to achieve their objectives in the areas of portfolio energy management, sustainability, utility procurement, energy assessments, and Leadership in Energy and Environmental Design (LEED), Green Globe and ENERGY STAR certifications. Energy and sustainability processionals can enable providers to dramatically reduce their carbon footprint and significantly contain costs, while allowing them to focus on their core mission of healthcare delivery.

4. Ensure maintenance of all capital assets, not just real estate
Health systems are inundated with time-consuming, complex functions that fall outside of their true mission of providing outstanding healthcare. Forming a strategic alliance with a firm that excels in the areas of facility management, medical equipment management and other healthcare related functions will result in increased efficiency and cost savings, while allowing health system executives greater focus on the core business.

3. Enjoy best-in-class capital management
Allocating scarce capital wisely—whether acquiring new, replacing old, or maintaining existing property, plant and equipment—is incumbent on healthcare leadership. But, prioritizing real estate and facilities budgets, including how much to allocate for things like repair and replacement, can be challenging. In addition, departments or programs that lack a direct revenue or ROI component might lose priority. Outsourcing capital management to an expert real estate partner can maximize strategic planning and allocation of dollars. A qualified real estate expert proactively analyzes and plans for short- and long-term needs, resulting in significant cost savings and preservation of valuable assets.

2. Generate more revenue
With the aging population and an expected increased number of insured under healthcare reform, preparing to handle increased volume profitably is a key goal of healthcare executives. With all of its resources dedicated to enhancing the performance of facilities and real estate, a third-party expert can identify solutions to meet system growth initiatives whether for new space or by reconfiguring existing space. And, consider the amount of time healthcare executives spend on real estate and facilities matters.

The opportunity costs can be substantial, detracting and distracting leadership from other critical responsibilities. Outsourcing to dedicated real estate experts gives back those valuable hours, which can then be devoted to business efficiency and revenue generating opportunities. Optimizing and standardizing the quality and look of real estate will enhance those marketing efforts.

1. Reduce occupancy costs
Leveraging the experience and relationships of a seasoned real estate partner translates to widespread cost savings, streamlining and efficiency. This can be applied to such critical functions as procurement, optimal resource allocation, energy efficiency, electric systems, medical waste, chiller maintenance, water treatment systems, landscaping and snow removal through an already firmly established national and regional supply chain.

Sydney Scarborough is managing director, Jones Lang LaSalle (healthcare solutions group) in Chicago.