How Healthcare organisations can upgrade equipment, even when they lack capital

Australia’s hospitals tend to have outdated equipment and facilities, and lack the necessary capital for the updates they desperately need.

How can they modernise, boost productivity, and address their maintenance deficits, if they lack funds?

Australia’s hospitals made 10.6 million patient admissions in 2015-2016. In fact, due in part to an ageing population, Australians are more likely to be hospitalised now than a decade ago — and more frequently. Healthcare is one of most critical national services, but changing demographics are placing increasing demands on our hospitals. Yet many states have heavy budget deficits that could worsen as the heavy cuts made by the 2014 Commonwealth budget came into effect from July of 2016.

The state sector, in particular, suffers from a lack of funding, with much of its core infrastructure dating back as far as the 1960s. But it is clear that in order to provide the best service and remain competitive, health and aged care facilities cannot afford to be left behind the treatment curve — or the rapidly advancing march of technology.

It’s not just about what new technology can offer, either. The benefits of having up-to-date MRI machines or CT scanners is obvious, but other equipment can be equally in need of updating such as bedding or other critical infrastructure. The importance of good lighting for observation areas, or of well-run HVAC systems in preventing the spread of diseases such as Legionnaires, should not be underestimated.


Stumbling blocks

Clearly in such a risk-sensitive business, having a high-functioning, cutting-edge and well-maintained operational set-up is all important. But how can health care facilities achieve such a standard without the capital?

The obstacles to keeping equipment and facilities up-to-date go beyond finding the requisite capital. There are the internal and administrative challenges of building a business case for stakeholders, and competing demands for spending, such as staffing and recruitment. As well as balance sheet considerations, there is the nature of the technology itself. In a fast-moving sea of tech, how and when do you commit to a certain model? And when you do, there may be a domino effect of compatibility issues if you have to update one legacy system to support another new piece of equipment.


“The first thing to do is to identify the project — the problem area, its nature and scope.”


Finding a way

To circumvent these issues, healthcare facility owners are turning to a new way of doing things. They are following the movement in other industries to ‘as-a-service’ solutions, looking at this model to plug their budget gap. Just like with Uber or Airbnb, people and businesses are increasingly looking to purchase an outcome rather than a product.

Hospitals that move to this model will be able to focus on their core competencies and purpose — shifting their attention entirely to healing, without the peripheral demands of asset management or maintenance. In a service economy, such a move makes sense for many industries. But for healthcare in particular, it can address the biggest hurdle to updating equipment — the initial capital requirements and funding issues. It’s also a more sustainable model of staying well-equipped over time.


Delivering better healthcare month to month

Making improvements ‘as-a-service’ can be a way of cutting overheads too. For example, hospitals can switch to more energy-efficient- or even energy-generating- technology. Others are well-placed to consider installing integrated systems, such as trigeneration plants that can provide power, heat, cooling, hot water and steam at once. In addition to financial benefits, these systems have the advantage of social and environmental benefits, such as making buildings more sustainable.

So how can you go about such a shift? The first thing to do is to identify the project — the problem area, its nature and scope. Then consider the lifecycle of the assets and the likely cycle of modernisation. By bringing in a partner that specialises in providing infrastructure as-a-service, you can apply a structured, ongoing solution. Hospitals know best what medical equipment they want and need, and Infrastructure Managed Service partners can take care of the rest.

Hospitals don’t have to fall behind due to a lack of capital for upgrades. Through as-a-service solutions, they can make the necessary improvements to medical equipment, electrical, mechanical, hydraulic and other critical infrastructure. By leveraging these as-a-service, hospitals can address their maintenance gaps via operational expenditure rather than capital expenditure. As such, this will become an increasingly attractive solution for the healthcare industry.


Rad Krvavac, Managing Director, Infrastructure and Energy