🏥 Healthcare infrastructure and asset compliance in Australia have undergone significant changes over the past few years. Federal and state governments are increasingly responding to heightened consumer expectations and budget pressures by introducing mandatory requirements for physical assets, such as hospital buildings, machinery and equipment to be managed in a safe and financially responsible manner that also minimises the cost pressures faced by the sector.
For healthcare operators facing rising cost pressures, maximising the value of assets while reducing risk is critical. To achieve this, a lifecycle management approach is needed.
Spending on maintenance to "keep the lights on" is typically viewed as an inevitable cost to ensure things keep running. But securing funding to replace non-clinical assets can be challenging. An older asset may appear to be operating effectively, or stakeholders simply get used to something not working as well as it should.
Without total asset failure, it can be hard to make a case for replacement. But not doing so, and waiting for the asset to eventually fail, can be catastrophic. Even before total failure, customers can be impacted, and repair frequency and costs rise through more unplanned service interruptions. Eventually a "sunk cost fallacy" is reached where the repair of the asset will cost more than replacing it.
For health asset managers, the dilemma is knowing when an asset has reached end-of-life, and making a business case for its replacement. To secure funding, they need to communicate:
How important the asset is to the business
The evidence that the asset is reaching the end of its life
How long it will take to replace it
The full cost of replacement
That’s why having asset data is so important. This includes having a full, up-to-date register of assets as well as regularly updated condition assessments. Many organisations struggle with data: it’s often incomplete, outdated, inaccurate and siloed, but it’s the lifeblood of effective lifecycle asset management.
Having high-quality data involves bringing together data and intelligence from all stages of an asset’s life, ensuring that it is accessible to all stakeholders (who may change throughout that asset’s life) and can be used to generate valuable and accurate insights into projected costs, maintenance and eventual replacement. Taking a lifecycle approach can also extend the life of assets through proactive maintenance, as well as improve their cost efficiency. In one example, a chiller, which would normally be expected to perform worse as it aged, became 20% more efficient.
It’s also important to communicate the analysis in a way that makes it relevant to executive management and easy to process. This means linking it to key organisational goals such as risk, compliance, and sustainability.
Using a centralised platform like AssetFuture can help bridge silos and enable data that flows on from each stage of an asset’s life, enabling vital insights into asset degradation and cost projections. This level of transparency is also becoming increasingly important from a regulatory perspective, as government regulations and compliance requirements continue to rise.
State-by-state policy
Australia’s state and territory governments are at different stages of legislation and compliance for asset management in health and other sectors, but all have clear policy visions for more sustainable infrastructure with a lifecycle management approach.
New South Wales:
Health Infrastructure NSW, established in 2016, has a vision to deliver "future focused, innovative and sustainable infrastructure and support solutions that enable value-based healthcare".
Queensland:
The QLD Department of Health Asset management and maintenance states that "all infrastructure and assets shall be consistently managed in a structured program using asset lifecycle management principles".
Victoria:
The Statewide design, service and infrastructure plan for Victoria’s health system 2017-2037 sets out the state’s vision for investment in current and future health facilities. The Infrastructure Capability Assessment Health & Human Services addresses the need for better asset utilisation and asset optimisation to meet the escalating cost of health services.
South Australia:
The Infrastructure and Asset Management Domain encompasses the areas of capital works, asset management, property, accommodation, and facilities management. Its key principles include optimising the performance of assets to support service delivery.
Western Australia:
The Infrastructure (Asset Management) Policy Framework specifies the infrastructure asset planning, procurement, operation and maintenance, and disposal requirements that all health service providers must comply with. This includes "consideration of lifecycle costings to ensure long term sustainability of each asset".
Tasmania: the 30-year Infrastructure Strategy sets out that future health infrastructure "must be flexible, scalable and adaptable to respond to changing clinical delivery".
Lifecycle asset management is vital in healthcare because of the nature of medical facilities and equipment and the services they enable. Failure to properly manage, maintain and replace assets results in safety risks, downtime, and financial losses. Whereas effective lifecycle asset management in healthcare results in reduced downtime, improved patient services, better financial performance and regulatory requirements.
If you’d like to achieve better results in your healthcare organisation, please contact AssetFuture to discover how our lifecycle asset management solutions can improve your operations and reduce downtime.