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Doing More With Less: The Healthcare FM Challenge

Doing More With Less: The Healthcare FM Challenge

Reduced Medicare reimbursements combined with an aging population moving into Medicare is a recipe for red ink on hospital balance sheets. As hospitals look for ways to cut costs without cutting services, facilities managers find themselves on the front line of the cost-efficiencies battle. reports that currently 10,000 people per day become eligible for Medicare. Despite the size of the Medicare market, the constantly shifting regulations make it a difficult environment for healthcare providers. Each time regulations are re-written, hospital facilities managers are directly affected as various healthcare services are relocated to ensure Medicare reimbursement.

In 2015, new regulations instituted a “site-neutral” policy, cutting hospitals’ reimbursements for outpatient services at a hospital’s satellite facility, to match the lower amount paid for the same services performed in a doctor’s office. As reported by Sheila Cahnman in Healthcare Design, hospitals began removing outpatient services from off-campus satellite facilities and reincorporating them back into the hospital complex where the reimbursement rates remained high.

Now another change is contemplated by the Medicare Payment Advisory Council (MedPac), one that would reimburse most outpatient healthcare services at the same rate no matter where they are performed. This revision aligns with the way the market is evolving, with patients expecting to receive non-acute treatment in convenient settings close to home. Hospitals may find Medicare profits in off-site facilities that provide pharmacy and laboratory services as well as outpatient services.

Facilities managers are feeling the impact of these regulatory changes. In 2015, the consolidation of services forced facilities managers to find room in hospital complexes for space-hungry equipment, particularly imaging and endoscopy, which had previously been housed in off-site facilities. Now the changing market demands, combined with prospective new regulations, will find FM professionals looking at ways to maximize space in their off-campus outpatient facilities for the equipment they’d relocated just a few years earlier.

Rather than add building expansion to the expense of these back-and-forth relocations, facilities managers can turn to space-efficient storage systems to claw back usable floor space for the outpatient equipment and personnel. A high-density HIPAA-compliant mobile shelving system reduces storage floor space by 50% and increases storage capacity by 100%. A vertical lift for beds or lab equipment recovers an average of 75% of floor space.

As Medicare reimbursements squeeze hospital income, managers demand greater efficiencies to preserve profitability. Space-efficient storage systems are a cost-effective way of doing more with less.


Photo © Tyler Olson/