Developing a budget for facilities and HTM departments requires plenty of forethought and strategy. Being prepared going into your budgeting process is essential to ensure your department has the resources needed to manage regulatory compliance and tackle operational improvements.
Presenting an unorganized plan to decision makers who may not be as familiar with the ins and outs of your department's needs can quickly lead to cuts being made that negatively impact operations. However, coming prepared with well-articulated reasons why the department needs a certain budget and how it supports overall hospital functionality will arm you with the points you need to defend your requests and get more resource needs approved.
Read on for our top 5 tips on what to consider when preparing to advocate for your department's needs during budget planning.
Operational Efficiency
In a fast-paced hospital environment, every second is valuable, and the ability for staff to perform their job duties efficiently makes a difference. Recent research by Vizzia Technologies and Georgia State University found that Registered Nurses spend about 60 minutes per shift solely on tracking down needed equipment, leading to an overall $14 billion annual productivity loss for healthcare facilities. Ensuring that Facilities has the budget needed to effectively inventory and organize equipment not only makes an obvious financial impact on the time spend needed to locate assets, but also can improve employee satisfaction and retention from avoiding the frustration of constantly searching for materials.
With many hospital systems considering flex staffing for fixed departments like Plant Operations, demonstrating operational efficiency becomes paramount to maintaining your FTE count during a budget cycle. When preparing to present budget plans, emphasize the widespread positive trends that hospitals can see when maintenance staff have adequate resources to stay on top of operations and enable other staff to perform their jobs more easily. Utilizing your CMMS data to exhibit metrics for employee productivity, preventive maintenance needs, or work order backlog can effectively illustrate your needs to decision makers.
Preventive Maintenance vs. Reactive Maintenance
Emphasize the importance of having the resources needed to stay on top of preventive maintenance. Performing proper ongoing preventive maintenance instead of relying on reactive maintenance has a positive impact in several areas, including:
- Cost savings on replacing broken equipment by keeping assets well-maintained to extend the asset's productive lifespan while effectively prioritizing which assets to replace versus continue repairs.
- Risk management benefits from having consistently functional and reliable equipment when it's needed most. Optimal maintenance = fewer failures.
- Avoiding penalties by maintaining up-to-date regulatory compliance standards.
- Staying on top of maintenance needs feeds into supporting long-term infrastructure sustainability, reducing the need for expensive widespread repairs or renovations in the future.
Capital expense budgets are one of the first savings levers for finance departments, however, longitudinal studies of maintenance practices show the long-term impact of investing in your preventive maintenance program over run-to-fail models. These programs offer a more reliable, balanced workload, rather than the ebb and flow of unmanaged equipment downtime.
Energy Improvements
With many healthcare facilities placing an increased focus on optimizing energy efficiency, this is a topic that will likely connect with the priorities of the decision makers overseeing budget requests. Presenting energy improvement plans and what a department needs for them is a great opportunity to tie your request to tangible numbers in terms of potential dollars saved for the organization if your team receives adequate resources to act on an energy initiative.
Energy improvements are all about efficiency. Optimizing energy usage with measures like more efficient HVAC systems or lighting reduces overall energy costs across an organization, promotes a healthier environment for both patients and staff, and reduces the risk of equipment downtime when supported by a backup energy plan in the event of an outage.
On top of these operational benefits, a facility actively taking steps to align with greener practices can be beneficial in terms of reputation and community sentiment. Tapping into the idea of a widespread increase in ROI plus the ongoing long-term impact of shifting toward more energy-efficient operations is a strong case to make in favor of allocating sufficient budget.
Patient Experience
Patient care is at the core of all work that healthcare professionals do, regardless of department. For Facilities and HTM, there is a direct correlation between having sufficient resources and the care that patients will experience. Providing maintenance departments with the budget to operate at levels required to keep up with the labor and equipment needs of the environment of care is essential to delivering high-quality patient care. A well-maintained environment and organized, reliable equipment contribute to a more positive patient experience during what are potentially stressful and frightening moments.
Hard Data and Industry Benchmarking
Backing up your departmental budget needs with concrete numbers is always a good practice. Having data to reference as evidence of why certain resources are needed is not only a useful tool to make budget planning easier, but is also an integral part of demonstrating to those who may not be attuned to the needs of Facilities and HTM departments exactly where resources are going and what the outcomes for the organization as a whole are. Consider data points for assets like unplanned downtime to illustrate disruptions in operations (and revenue!) or labor hours spent supporting specific pieces of equipment.
When asked to reduce budget, many CFOs are looking to verify the cost of operations is in alignment with other hospital systems of like size and kind. Using industry benchmarks can display how effective your operations are when compared to peers. The challenge lies in confirming your financial and operational models mirror like-sized hospital systems. Typical benchmarking organizations such as IFMA measure your FTE need vs current headcount, vendor spend, materials purchased and contracted work. Setting goals to exceed such metrics will put your hospital system above the rest.
Combining data with industry benchmarks and best practices arms you with persuasive evidence when presenting a capital plan. For example, stacking up your asset installation dates against industry standards for asset usable life can demonstrate successful ROI on previous resources allocated toward preventive maintenance. Tools like your CMMS and FSI's Capital Planning are an important source of information in nailing down these numbers and compiling budgets based on real data.
Though advocating for department needs during budgeting season can be a stressful process, there are several ways to alleviate frustrations and ensure that your reasoning resonates with decision makers regardless of their depth of knowledge in the Facilities and HTM spaces. Coming prepared with facts informed by real, actionable data, tying budget needs to bigger core concerns in the healthcare space, and aligning your plans with overarching hospital goals are great strategies to employ in making the strongest case possible.
Is your CMMS not cutting it when it comes to up-to-date data and planning tools? Contact our team to talk about how FSI's CMS and Capital Planning tool can be your number one resource during budgeting season.