Deferred Maintenance and Master Planning – Leveraging Operational Data to Inform Strategic Infrastructure Investment

Hello, and welcome today's webinar, deferred maintenance and master planning, leveraging operational data to inform strategic investment. Our speaker today is Mark Mockel, strategic account executive at Brightly, a Siemens company. A little bit about our speaker. Before joining Brightly, Mark was a cofounder and senior vice president at Facility Health Inc, where he was instrumental in introducing new infrastructure investment solutions and benchmarking capabilities to the healthcare industry. Mark has a bachelor's degree in mechanical engineering from Purdue University, an MBA from the University of Michigan, and has held executive leadership roles in multiple industries, providing a unique perspective on the challenges facing health care facility management today. Mark is a certified health care facility manager and was recently granted senior status by the American Society for Health Care Engineers. As an advocate for increased infrastructure investment in our industry and a member of the ASHI National Advisory Board, Mark is passionate about sharing his experience with all who serve and are served through the environment of care. Before we begin, I'd like to remind the audience to please submit questions throughout the webinar using the question answer feature at the bottom. Our speaker will leave time to address questions at the end. Also, information on how to view today's recording will be sent in a follow-up email. I would now like to thank you for your time, and we'll turn it over to today's presenter, Mark. Please go ahead. Alright. Thank you so much, Regina. Can everybody hear me okay Real quick? K. Perfect. So, appreciate everybody joining today. We had over a hundred people register for the webinar today, which is, very impressive, and I wanna say thank you for taking a few minutes out of your day to to join us. You know, this topic of of deferred maintenance and capital planning, is getting a lot more time and attention these days, I think. And so my hope today when we talk about deferred maintenance and master planning is to provide some additional context, maybe a different ways to to look at the the deferred maintenance and aging infrastructure, issue. So jumping in, my contact information is here. And, Regina, thank you for sharing my my background. I am proud to serve on the national advisory board, for the American Society of Healthcare Engineers. And having said that, I also need to share then this disclaimer. I am presenting today to you, based on my own experience and also representing Brightly. So, anything I share with you today is my personal opinion based on, experiences. I'm not speaking on behalf of ASHI, in this presentation. So in terms of learning objectives, I'm not gonna read through all of this, but the goal here is we really wanna talk about, what is master planning? I'm actually gonna spend a few minutes, define master planning, talk about some of my observations and experience in working with health care, leaders on master plans, and then talk about deferred maintenance, infrastructure metrics, and some of the opportunities that I think we that we have to better align facility condition assessment data, deferred maintenance information, infrastructure investment, and ultimately tie it to larger business outcomes. And master planning is a perfect vehicle to do that. A lot of the content that I'm gonna review today in the webinar is actually available in this article. This is was something that I published back in May of this year. It's in the ASHI Healthcare Facility Management magazine. There's a link to the article. You can also go to that site, as an ASHI member, and you get, access to all of that information. So kinda repurposing that content here and hope that, this is useful inner information. I think the key thing we wanna talk about today is aligning infrastructure needs with clinical and financial goals for the organization. For those of you that attended the HFIC conference in Columbus back in late July, there was a fantastic panel discussion on this very topic. Joe Powell, Andy Umovoya, Damien Skelton, Matt Snow, we had a good good group of folks. And if you were able to see that panel discussion or hear that discussion, a lot of the themes that we're talking about today were central to that discussion as well. So I do, commend Ashley for bringing this subject forward and and for you know, I'm seeing more and more of these discussions, and I think it's a great opportunity for us to learn. We also had a panel discussion just yesterday, called ASHI conversation circles, where we did much the same thing. I was, proud to serve on that panel as well. So let's get into the to the next steps of the content then. So I always like to start these presentations with stories. Let's let's talk about some things that we're seeing in the industry. And I'm gonna read this quote to you. We don't need to include a facility condition assessment in the master planning scope. We'll worry about that later. This actually happened. I was in a meeting back in twenty nineteen. My firm at the time had partnered with an architectural firm, and we were presenting a master plan concept to the c suite, to a CEO and the rest of the officers for a particular health system. And when we got to the subject of the master plan, and this was a multimillion dollar effort just to assemble the master plan for this health system, and we had included the performance of a baseline condition assessment in the master planning proposal to do just what we're talking about today, to make sure that the current infrastructure was, it it was included in in the master planning details. And in this case, I have to say it was a little bit uncomfortable, but we were basically told, we don't need an FCA. We don't need to include that. We're gonna focus on the future, not the past. So what that tells me is there's a there's a fundamental, maybe, disconnect, right, between the strategic planning for the future and and maybe looking at the facility and the infrastructure as something. Yeah. We'll just we'll address that separately or or later, and I hope we change that. So another example, this is more recent. This is a group that I have been working with over the last many months, and it was kind of the opposite problem or maybe the impact of similar types of decisions. So in this case, the PDC team for this health system has been working on renovation projects, repurposing projects, moving service lines to different buildings. And the the problem that they were facing is every one of these projects was going was coming in over budget and over schedule because once they got in and did some demolition, found infrastructure issues that were either unknown or unplanned, and so that was impacting the ability to deliver these projects on time. So in this case, you know, we keep finding infrastructure issues that we must address before we can finish our projects. That is exactly the type of issue I suppose many of you have seen, in the industry. We don't like surprises. So the goal here again is to to look for different ways to bring these things together. So lastly, I'm gonna use a quote from Stephen Cove Covey. I think this is kind of, important here. We simply assume that the way we see things is the way they really are or the way they should be, and our attitudes and behaviors grow out of these assumptions. And I think the previous two slides actually kind of articulate that. There's it's all about perspective. The CEO has a much different perspective than we do from a PDC or facility management perspective. Neither is right or wrong. They're just different. And so my goal today is to is to maybe provide some examples where we can bring these two perspectives together because at the end of the day, we're all on the same team. Right? We all want to advance the facility, the infrastructure, and the service lines, and the revenue for the health system to be successful financially so that we can provide better patient care for the communities that we serve. So the current landscape, I don't think I need to tell anybody what's going on right now. We we know we have aging infrastructure. This is a national issue. It is not unique to any one sector. I would say that the rural health care providers are probably in in in tougher shape than some of the others, but even well financed, well funded organizations, large enterprise organizations are struggling as well. We didn't get here overnight. It took us years, decades to get here, and our job now is to figure out how do we reverse this trend and and start on an upward tick. We're not gonna solve this problem in one year or two years. It could be another decade before we work our way out of this, but it is going to require us to to, again, change our perspective. Deferred maintenance, we all understand those issues, funding gaps, and then the need for strategic planning. I think the biggest macroeconomic, factor that we're all looking at today is the what will be the ultimate impact of the big beautiful bill? I don't like the name of that, by the way. I'm just stating it for what it is. But the potential or real cuts to reimbursement through Medicaid, etcetera, I'm seeing more and more organizations are pulling back in anticipation of those reimbursement changes. So right now, we're in a very conservative cycle. Even approved budgets, I'm seeing some of them pulled back. I have to assume that many of you were experiencing this in your individual roles in hospitals and and health systems. So much like at the front end of COVID, we predicted that it would be harder to get capital in the years coming out of COVID. Supply chain caused issues. Inflation caused a lot of issues. Things have started to settle down a little bit, but I'm again seeing the the industry starting to do a pullback in anticipation of more uncertainty, on the financial front. So we have to just be aware of that. What it ultimately means is it's gonna be harder for us to secure the capital that we need, which means we really need to rethink how we, ask for those dollars and how we, can align our needs with those of the larger organization. So let's take a minute and talk about master planning. I I presume many of you or most of you are aware of master planning. Maybe you have participated in that in your organization. But I think it's it's good to just start fresh and say, what is master planning? Right? Well, master planning, if you think about it, is is, you know, we see it in cities. We see it airports. We see it certainly in health systems. It's it's trying to look into the future, not just next year, but five, ten, or even fifteen years down the road. You know, what will our census be? What are the demographics of our community? What service lines do we need to consider? And, ultimately, the goal of a master plan is to lay out a comprehensive strategy that will guide the organization for the next many years. Now a ten or a fifteen year master plan, is is tough. I did hear on a call yesterday that even five year planning five year strategic plans are becoming more difficult because the world is changing so fast. So even within a master plan, we can think about three, five year horizons and then have that maybe that ten year horizon to really, try to look down the road. The goal ultimately of master planning is to talk about resource allocation. Now resources can be facilities. Resources can be nursing staff. Resources can be physicians and administrators. Resources can also include financing. So a big part of master planning is also understanding what capital needs are we going to see, what investments should the organization be making comprehensively so that ultimately we get the the best return on that investment? Certainly, regulatory compliance and sustainability can and should be part of a master plan. Decarbonization and for some organizations, decarbonization and sustainability is a, a very key metric. What a great opportunity to insert, infrastructure language into the master plan. Maybe an organization is focused as a if it's an academic medical center, maybe it's more focused on developing facilities and capabilities to support the research in partnership with the university. So every organization has a different mission. They have addition a a different vision for where they wanna be, and, ultimately, the master plan would be the vehicle to help deliver that. We talk about here deferred maintenance integration. Based on the story I told you, some master plans do include infrastructure deferred maintenance and some don't. I'm hoping that we can correct that, as an industry and make sure that that deferred maintenance information is front and center. Now one unique perspective, and you got I've got the cartoon up here. Most people think of master plans as what are we gonna build next. Certainly, the CEO that I mentioned in the earlier slide was very focused on construction. We need a new bed tower. We need a a a a a new you know, we need new ASCs. We need new MOBs. Whatever it might be, it was very focused on construction. And I think the traditional view of master planning is really focused on, you know, these the cartoons. What do we want the campus to look like five or ten years down the road? I think in health care, it's much more or as important to think about master planning inside the existing infrastructure. We all know that service lines change. So we have a building that was built in nineteen seventy five that was intended to serve, a certain population, certain service lines, etcetera. Technology changes, service lines change. You know, I always hear stories. Well, the endoscopy lab is on the second floor of this building. We wanna move it to the first floor of another building. Well, that's a very, very invasive process. So I think with master planning in health care in particular, we also have to pay attention to the fact that we may be repurposing and altering the buildings themselves, and deviating from from original design criteria. So there's a lot to consider when we look at master planning. Now on the next slide, I wanna talk about what drives master planning. And and this is Mark Mockel's opinion. What what do the CEO and CFO, what does the c suite, what does the governing board, what are they worried about? Well, they're worried about alignment with the business objectives, which is almost certainly growth. You know, I haven't seen any health care organization that's interested in in getting smaller. Right? It's it's it's typically growth oriented, Certainly responding to patient and community needs. So if you look in Texas, if you look down in the Carolinas, you look in Florida, we almost can't build enough health care infrastructure because of the demographics, the population shift, which is changing the census data significantly. So we have to pay attention to that. We have to have enough beds to serve the community. Where I'm from up in Michigan, we're not seeing that same type of growth. We still have construction and health care, but in some cases, we have population decline in certain parts of the state. So paying attention to those those macroeconomic or social, impacts of of community shift is very important. Financial stewardship and capital efficiency. Transition from outpatient to ambulatory care. These are all factors that we've been talking about. Right? What does telehealth have to do with master planning? Well, everything and nothing. But if we do see a shift towards telehealth, it's gonna change again the way we think about our facilities and the way we use them. And then certainly technology and innovation. Right? We have new clinical new radiology equipment. We have different techniques, different technologies that are coming forward that were never even anticipated twenty, thirty years ago when some of these buildings were constructed. So I list those key inputs. That's what I think, are the driving factors for, for master planning. And then I'm balancing that against some of the comments I made earlier. The cost of care. Right? How can we reduce the cost of care? How can we make that more efficient? How do we talk about growth and financial stewardship and serving the community at the same time that reimbursement may be changing, funding mechanisms are changing? So these are the problems that the c suite is looking for. They're paying attention to these things. These are problems that ultimately they, along with the governing board, are gonna be responsible to figure out. So the goal here is how can we represent our part of, of the organization? How can we bring facility data forward and help to help our leadership achieve the success that they desire? Now I focus here again on the financial outcomes and growth. I think these are the two areas where we have the best opportunity to bring our data forward and hopefully get a seat at the big table where we can make sure that facility needs, are also represented, you know, in those discussions. Ultimately, what I wanna focus on here is value, value definition, value creation, and value communication. Every master plan, every projected long term plan has an ROI because the assumption is if we're going to build a new bed tower, we're not gonna build a bed tower that's that has a negative, ROI. So we have to actually look at the fact that every one of these master plans has some return on investment at the macro level. None of those or very few of those are going to anticipate, infrastructure failure. Right? The other thing I didn't mention on master planning is hardening of the facilities. Right? We go we we've got hurricanes are are increasing in intensity. We're seeing, more need to harden the infrastructure. Well, to me, hardening of the infrastructure and securing the viability and the performance of all of the buildings in the campus, that has to be considered in a master plan because we're not gonna we can't build a new tower and not take into the, account the fact that it may fail because of of some unforeseen circumstance. So, again, we're looking for different ways to stitch these things together. The negative impacts of aging infrastructure on master planning, there's a long list here. I'm not gonna read all of these. I think we all know what these are. Some of these are easier to quantify than others, but the biggest one ultimately is, you know, loss of revenue. Right? We've all heard the stories or told the stories or seen the stories of, you know, we lose emergency power or I'm sorry. We lose power. We don't have, full capacity in our generators, so we can't run our chillers. So we can't maintain temperature and humidity control. So we can't perform procedures. Right? There's a lost revenue equation that can be articulated because of infrastructure issues, but oftentimes, we can't articulate it until after the failure happens. And so the goal here is we wanna continue to communicate every asset, every system was put in the building for a reason. What is that reason? Why is that pump there? Why is that air handler there? And our job as facility leaders is to try to communicate transparently what's going on in the facility, what does deferred maintenance look like, and why should they care? Why should the CFO care? Well, ultimately, because the infrastructure provides the foundation for all of the other desired outcomes. Right? The patient experience, capacity, the the the revenue. We don't wanna lose revenue. We wanna we wanna record revenue. Compliance. There's all kinds of of primary or even secondary impacts, negative or positive, that can all be tied back to the infrastructure itself. So when we look at deferred maintenance itself, and I'm gonna get into some some data here in a minute, I've always articulated that increasing levels of deferred maintenance is essentially it's analogous to the accumulation of debt. Right? Every time a CFO chooses to fund, let's say, an MRI replacement project instead of an air handler replacement project, they're essentially borrowing money, if you will, from the life of the facility to fund another project. And that's okay. It's not our job as facility people to to tell the CFO that they're making the right or the wrong decision. That's their job is to make that decision. But I will argue that our job is to provide them with the data, the objective data, and the information that they need to make a more informed decision. So what's important here is to look for key metrics. What is important to your leadership? There's tons of ways to measure this. You can look at a facility condition index, an extended facility condition index. Age of plant is a very popular financial term. You'll see that in even on the balance sheet, right, of an organization or in the, you know, an annual report. Expected useful life, deferred maintenance, risk, criticality, even talk about operational budgets and how the performance of preventive maintenance can extend the life of the equipment and thus reduce, capital needs. Right? Find out what's important to your leadership. Figure out what metrics, resonate with them the most. And and there's no right or wrong answer here. The goal, though, is to have the data and to communicate. And then, as my friend Don Page reminded me yesterday, it's it's all about the data. But once we have the data, then we have to focus on telling the story. This article just came out. I I just threw this into the slide set. Doctor Walker just published an article in the health care business review. I picked it up on LinkedIn. I'm gonna be meeting with him next week because I'm very excited to to to to learn more about his approach. But he published a very cool article. And and and a lot of the things that I'm talking about, he put in this article, so I wanted to share it with you. And what he says here, aging infrastructure and health care facilities is a problem that requires collaboration among facility leaders and finance managers to develop and implement sustainable solutions. And what I really love about this is he's he's looking at this in the broader perspective. This is about partnership collaboration, versus as opposed to us versus them. And if we can achieve that in the industry where we can really approach this from a partnership perspective, I think we will we we can make some real positive strides. So shout out to doctor Walker. Please check this article out if you get a chance. Now a worst case scenario. This this is public information, so I'm not sharing anything that isn't already out there. But this was a a a very dramatic, problem in in the Chicago area, and I and I share this with you not to to, you know, we're not saying the sky is falling. We're not trying to predict all of these horrible outcomes, but this is a real situation. This hospital is a safety net hospital in downtown Chicago, and and they literally had, HVAC failure in June, that forced them to shut down the hospital. And, publicly, they stated that it was deferred maintenance. It was, unfortunately, the loss I believe it was cooling tower issues. I'm not even really sure. But at at the end of the day, they were forced to evacuate the hospital. And, you know, just doing some quick math, the the annual revenue for this hospital, I I kinda estimated it around six hundred to seven hundred million dollars in revenue. So even a two week loss of revenue could could account for up to twenty five, thirty million dollars. So big, big money. And and what's worse, it's a huge negative impact on the community itself. To make matters worse, due to the situation, over time, ultimately, they lost their accreditation, late in late July. I I don't pull this up to scare anybody, and I certainly don't want to overly be overly dramatic in the presentation of this information. But there's an assumption by our industry that, oh, that won't happen here. Right? We can we'll keep it going. We'll find a way to to keep the to keep the engine running, so to speak. And and, you know, god forbid this happens to anybody. Again, it's a bad situation. But I do think it actually highlights, again, the impact that the accumulating debt and the accumulating risk of allowing deferred maintenance to get too far can ultimately have a direct impact, again, on patient care revenue. And in this case, again, a very difficult situation for the residents, in that particular community. So let's pivot now. Let's talk about deferred maintenance because when we talk about deferred maintenance, we can't be subjective. We can't be overly emotional or dramatic. Even though I tend to get pretty excited about this stuff, I wanna focus on being objective in how we present and share information. So what's important for me is to define deferred maintenance. In in my definition, these are assets or systems that have exceeded industry expected useful life based on either age or, hopefully, age and condition. Right? They're not what we're not saying in deferred maintenance that that all of these assets and systems are in imminent failure mode. I think it's important to to frame that in context. But if we see a high accumulation of deferred maintenance, which means we have a high percentage of assets in a facility that have exceeded industry expected useful life, and they should be considered for replacement, what we're ultimately saying is we're we're we're going to start seeing an increased probability of unplanned failure. Now, certainly, if we have assets or systems that are known to be deficient, we have to highlight those in our deferred maintenance bucket and really hone in on those key life safety assets or key critical or, key potential failure nodes so that we can draw attention to them. But I think the key takeaway here is the consistency of communication. Communicating objectively the reality of deferred maintenance is our best opportunity to establish that trust and that credibility with the leadership. This is how much deferred maintenance we have, mister or missus CFO. This is what we need to address immediately. These things, I think, or we think we can address them over a period of time. That's a very different conversation than, hey. I need twenty million dollars. Right? We we we wanna really put the context. So don't be afraid to communicate deferred maintenance, but I would encourage you when you do so, communicate it again objectively. Tell the story. Be transparent. Be transparent about what you need, and also be transparent about what you don't need and why. And I think that will go a long way towards establishing that trust. So three questions that I like to ask and answer when from a Brightly perspective when we're working with our clients on strategic asset management, deferred maintenance, etcetera, it's pretty straightforward. How much money should be invested in the facility to properly maintain the viability of that of that operation? Where should those investments be made to mitigate risk? And then how do we track those investments over time to make sure we're spending money in the right place and we're, prioritizing things correctly? So what I'm gonna share with you here is a a a bunch of data. Right? This is data that we have collected over the last ten years. It's a subject that I I I include this data in a lot of articles. I've presented a lot of this data at different conferences. But I wanna tell the story here and then offer up for those of you that download the slides or or or maybe take a look at this, the recording of this presentation. All of the data that I'm sharing here has been scrubbed for confidentiality. I'm just looking at macro trends, and I wanna share some key insights with that. If any of this helps you create a foundational discussion with your leadership, please please feel free to do so. So first thing, let's let's kinda put some definition around this. So what you're looking at here, this is this is our dashboard that shows, the data that we're tracking across the country. And this is a subset of our of our national data just focusing on health care. And we're tracking a little over ninety thousand, what we call, tier one assets. So mechanical, electrical, plumbing assets, these would be capital assets, roofing, glazing, and facade. So we're not looking at structural elements. We're not looking at civil engineering type, projects. We're looking at assets that are connected to the building. Right? Hundred and sixteen million square feet worth of assets, and the total replacement cost of those assets, if you had to go and buy all of them today, is approaching about fifteen and a half billion dollars. Now the number that I'm most interested in, what I wanna focus on is this deferred number. So in our database, in the groups that we're tracking, we're seeing, on average, fifty six percent of the assets in our database have exceeded expected useful life and should be considered for replacement. We'll talk about risk and criticality here in a second. That number at the front end of COVID was about forty two percent in our database. So we have seen a pretty significant increase over the last five, six years in the deferred maintenance data. Others are tracking this data as well. I'm hearing the same thing from from my peers in the industry. We're definitely still going in the wrong direction. I can't state whether it's statistically or not, but I do believe that the capital the financial impacts of COVID, the reduction in capital, the pullback even in some of our operational budgets, I do think that there's at least an indirect correlation between some of the tough financial decisions that health care's owners had to make through the COVID years. I do believe that that is is is showing itself now in the data. The basis of this deferred maintenance, if you look at this bar graph on the right hand side, what you're seeing is I basically have the ten year capital plan for hundreds and hundreds of buildings. It's all rolled up into one big plan. And what you can see here is just visually that deferred that bow wave of, of of assets and systems that's sitting there. These are assets that probably could have or should have been replaced in previous years. We gotta dig into the data to to really understand that, but but this is our reality. It it's I've been through hundreds of facilities over the last decade. It's very repeatable. It's very predictable. And and by standardizing the data, we can see it here. It manifests itself. We also can provide the FCI numbers, the EFCI numbers. Personally, I'm not a big fan of of the facility condition index. For those of you that that do use it, it's it's a it's a fine metric. I have no issues with that. But the reason I sometimes don't focus on that is because the calculation of an FCI is the dollar value of your your deferred maintenance is the numerator divided by the total replacement cost of the building itself. Well, the challenge is construction costs are are are going crazy right now. Getting agreement even within one organization. What's the right construction cost number to use? So I tend not to focus on FCI. I tend to focus on the real number that that we can use, which is that deferred maintenance number. What's the dollar value of the deferred maintenance? And then more importantly, what's included in that number? What you see down at the bottom then, these are projections of capital investment. And right now, what we're seeing is that, somewhere around four dollars per square foot as an average is kind of the minimum repair and replacement capital that that I would like to see. Now not every organization can do that. Most organizations are probably closer to a dollar, maybe two dollars a square foot over time. But what I'm trying to communicate here is that even at four dollars a square foot per year over the next decade, we're not making significant improvements in the deferred maintenance. We're just basically replacing stuff as it continues to age out. So at least based on this data, even at four dollars a square foot, in ten years, all of the things equal, we would still be sitting on about fifty six percent, deferred maintenance. The goal with these types of metrics is to sit down with the CFO and have a very different conversation and say, what is the right level of deferred maintenance for our organization? If fifty six percent is an acceptable level of risk, then we can align our renewal capital renewal budgets around that target. But, again, we're having a very different discussion. If we wanna reduce our deferred maintenance down to forty percent, thirty percent, or whatever, we're gonna have to make significantly more investment. But the key takeaway here, folks, is that capital investment in infrastructure has to be something that's considered over time. It's not just about one budget year or even three budget years. The goal with this type of information is to really have that discussion about long term capital planning, and that's, again, where this can align directly with with master planning information. Now let's dig in one step deeper. You see, the the the labels didn't show up on this screen grab, but we've got our assets broken down by types. So I wanna show you some very interesting information here. Oh, forgot I had that window to pop up there. So if we and by the way, for those of you that have access to the slides, this is a verbal description of of everything I just talked about. I'm not gonna read all of this, but it is there, for reference if you wanna come back and look at that information. Now I've hidden all of the locations in this case, because now we're getting into some some details. Right? What I've done here is I've taken that same dashboard, and I've isolated just life safety assets. So fire alarm, fire suppression, emergency power, automatic transfer switches, right, the stuff that that is core to life safety as defined by CMS, and managed through all of our accreditation protocols. And and the key takeaway for me here is if you look at the deferred maintenance percentage for this specific asset type or these specific asset types, it's very similar to the national average for all asset types. Now why am I focusing on this? What this tells me is that as an industry, we're not fully leveraging risk and criticality in our discussions with our leadership. I have seen time and time again facility leaders that have fire alarms that are that are not only are they past their useful life, they're no longer supported by the manufacturer. And yet we're still struggling to get financing to replace those fire alarms or to add an additional generator or to repair or replace, automatic transfer switches. Now we have to own part of that from a facility perspective. It it it may not be enough to go to the CFO and say, you know, we need x hundred thousand dollars or million dollars. We need to replace our fire alarm. Because they're gonna ask a question, well, what's wrong with it? It's working fine. Right? Etcetera etcetera. We have to actually lean into that and say, the fire alarm I mean, we all understand what a fire alarm is, but but communicate one step further. Yes. It's working today. But as an as an organization, do we want to accept the risk and the liability if it were to fail? Right? And so, again, we have to change the the dialogue a little bit. The, the the other key element here is and I wanna talk about this for a moment because I mentioned this on a call yesterday. Leverage the risk ranking that you already have in place. So basic space risk management or or risk ranking and asset risk ranking go right back to NFPA ninety nine, two thousand twelve edition. That's what all of our accreditation is based on. That's what all of our compliance, inspection testing and maintenance reguance, regulations are based on. If you're doing risk ranking just for compliance, I would urge you go back and look at that. Use that risk ranking not just to get through your next survey and not just because you have to due to compliance reporting. That's a great source of information to leverage when you're speaking with your nonfacility leadership. Fire alarms aren't risk ranked as life safety just because it's it it's because of the bigger story. Right? So let's take it one step further then. If we look at just generators, right, forty nine percent of generators in our database have exceeded that expected useful life. Now what that means because you look at generators, they typically have a twenty, twenty five, thirty year useful life. That means we're we've got a lot of generators out there that were installed in the sixties and seventies. Right? I actually made that comment to a CFO one time. I said, you do realize that your fire pump was installed when John Kennedy was president. Right? Look for different ways to tell the story. Now let's move into, another, asset type. So let's look at HVAC. So interestingly, when we look at air handlers and and all the elements that are associated with HVAC, we see a higher percentage of deferred maintenance versus the average. In this case, for for our group, it's about sixty one percent. Now that makes sense to me. Now here's why. We all know that ripping and replacing an air handler in an operational space, in an occupied space, is very, very intensive. So oftentimes with HVAC, we tend to push it down the road as long as we can because we don't wanna shut down revenue generating spaces in order to, facilitate that renovation. Again, our goal here is is not to question that decision, but to talk about the fact, okay, if we're not going to replace air handler twelve, which serves critical occupancy x, y, or z, what is our contingency plan if it fails? So it you know, that that's a conversation to have with the CFO or even with your EOC committee. You know, this asset, this system is is potentially deficient. We're doing everything we can to keep it running. Of course, what will be our contingency plan if it fails? How will we react if it fails so that we have so that we can minimize the disruption? That conversation by itself should get people leaning forward and saying, holy cow. You know? I thought I was just, you know, two million to replace an air handler. Yes or no. Okay. Well, I'm not gonna give you the two million to replace the air handler, but now we're going to have to build out an emergency response plan and make sure that we are prepared in the off chance that that unit goes down. Now it's becoming real. Right? We're talking about business continuity. We're talking about patient care. We're talking about revenue loss, but we're not doing it in a threatening manner. We're doing it in an objective manner and saying, let's plan. Plan for the worst, not for the best. From an architectural perspective, I'm gonna start kinda moving through these a little bit as we move towards the top of the hour. Fifty nine percent. Now glazing and facade, I'm not as worried about that, but I do get very concerned about roofing. So if it's not the it's not the roof, it's what's under the roof. So if you've got a roof over a critical occupancy type and it's known to be deficient, then, again, apply the risk ranking. I often encourage folks to to risk rank roof sections that are over critical occupancy. Let's risk rank that as an infection control issue. Right? Not to not to game the system, but, again, start communicating risk because nobody cares about a roof, we all know this, until it starts leaking. And then all of a sudden, you know, everybody's running around trying to figure out what to do. Well, perhaps, if we change that dialogue just a little bit, talk about what's under the roof. You know? We've got patient beds under that roof, and we cannot afford, especially if it's if it's ICU or an isolation space or something highly critical. We cannot afford to get water, in the building, in some of those most critical spaces. So, again, look for different ways to tell the story. And then other core, we're getting into basically just switch gear, plumbing, and all those things. We we see a little bit lower percentage here. Again, you have to dig even further into the data to look at the specifics of what you wanna what what you wanna share. But I think the key element here, hopefully, that's coming across, is let's put the data out there, but let's also be prepared to tell the story behind the data. This is a risk ranking, framework that is available to you. You can use this. This is one that we have used at Brightly for, gosh, close to close to a decade now, and it is definitely tied into the NFPA ninety nine. We put some additional, features and or, sorry, different inputs, variables into the risk ranking. The way we approach it at a basic level, if you think about air handlers, right, you might have forty to fifty air handlers on a, say, a million square foot campus. All of those air handlers may initially be classified as an environmental support asset. Disruption of comfort would be the typical, impact if that asset were to fail. Maybe average maintenance and average redundancy. That may be fine for for seventy five or eighty percent of the air handlers that serve business occupancy, the the the the front entrance, or maybe they serve less, critical spaces. But for those five or ten air handlers that serve ICU, NICU, PICU, ORs, isolation spaces, but maybe they serve labs or or or or pharmacy, etcetera, etcetera. We wanna make sure that we isolate those. So we may actually label those air handlers as an infection control asset. Now we have to do it again objectively, and we have to, be consistent in how we apply that so it doesn't come across as gaming the system. Use this if you like it. The best advice I can give you on risk ranking is keep it simple. Use the risk ranking that you will use. And what I mean by that is is start with risk ranking, and and and as soon as you start to see momentum and you get people involved in that, the best thing you can do is include your EOC committee, include your infection control people, validate your own risk assessment with them. It's a great collaboration point. It's a great way to get them engaged, in in the infrastructure discussion. And and what we're ultimately trying to do, this is just a graphical image of the same. We definitely wanna isolate those life safety assets. That is a compliance requirement. But I would make sure in a capital planning exercise, I would use this same Pareto. What are the life safety needs? And and I would prioritize those in the same manner. The next level, we wanna look for those high risk assets, those HVAC assets that are you know, we're not gonna they're not designated as life safety assets, but we we wanna manage them the same way we do manage our life safety assets. And we wanna prioritize them in the same way because they serve, again, critical occupancy types, which often are the most revenue generating occupancy types as well. So let's talk about then now that we've kinda gone through some of the data, how do we leverage this stuff? I think it's about education and data. It's not about opinions. The the best thing I can share here is to be objective. Again, be consistent, in in your communication of those needs. So what I'm sharing with you here then as we get close to wrap up, This is a presentation that, I did at the American College of Health Care executives in twenty twenty four. I had the privilege of speaking with, Clayton Smith from Children's Health in Dallas and also doctor Steven Call from from the Washington University or University of Washington. And we had the opportunity to present the concept of deferred maintenance to, administrators, c suite executives, clinicians, very few facility people in the room. And the what we did in the beginning and so I'm I wanted to give a shout out to Clayton again for for, this presentation we were able to do a year ago. What we did in this case is we we put this information out there about children's health, and we talked about the things that you typically, think about. Right? How many beds? How much, how how large is the campus? Right? These are the big things that we tend to use to define a health system. And then we flipped the script and said, this is what we see from a facility perspective. This is how many air handlers we have. We have twenty eight chillers, twenty two boilers, two hundred and seventy three exhaust fans, etcetera, sixty eight ATSs. And this this alone, when we kinda flipped back and forth, it was pretty cool to watch the audience react and say, oh my gosh. You know, we had no idea. Right? It's just a building. But when you start talking about the number of assets and the criticality of those assets, it's it's very important. So, I've heard many of my peers suggest this too. If you get an opportunity to, take your CFO, take your administrators, take them on a tour, show them the parts of the hospital that maybe they've never seen before, Teach them just a little bit. What is it that we're doing in facilities? We're managing all of this stuff. Right? And we have to make sure that all of that stuff does what it's supposed to do so that the rest of the organization can do what they need to do, which is to care for the patient. So what is infrastructure? Again, I'm not gonna read all this because we all know what it is. But in this case, we actually were, educating the room. This is what infrastructure means to us. It's not just structural steel and parking garages. It's all of the mechanical, electrical, and plumbing systems that are installed into the structure that make it work. And also understanding that a fifty year building doesn't mean that you're gonna get a fifty year boiler and a fifty year air handler and a fifty year generator. You might. Many of you may have fifty year old assets. But, again, we wanna communicate that in order to get fifty years out of a building, we may need to have multiple cycles of renewal for those core assets that actually make the facility, operate or allow the facility to operate. So, again, just some different ways to think about it. And then lastly, I wanna show you, what this looks like at a portfolio level, how we tend to work with our clients. And this is a this is a false name and a false location. I'm gonna say that three times. False name, false location. Right? But this is real data. Okay? This is a sample of a four point six million square foot portfolio. In this case, we're looking at about sixty seven percent deferred, which is a big number. And so this is one of those recovery efforts where, I'm working with the leadership to, to understand what does this potentially mean. And what I want you to pay attention to is when that sixty when we start to get into the sixties and seventies and eighty percent deferred maintenance levels, what ends up happening is the money to recover that facility gets so big that even if it was available, we can't replace all of those assets all at the same time. So for those of you that have high levels of deferred maintenance, another communication could be, you know, we can only do so much work every year without disrupting operations. So the stability of that capital investment over time can be just as important as the, the as the dollar value. And, again, tying this back to master planning, we're looking at a ten year horizon, which is which typically aligns with those long term revenue projections and even the ROI estimates that are associated with the master plan itself. Again, we can model those swim lanes, but what I wanted to show you here, this is a great input into master planning. So underneath that four point six million square feet, we've got a bunch of different buildings. Again, false names, false locations. But what we're looking at is the distribution of the deferred maintenance. So it's not enough to just say that the average deferred maintenance for health system x is sixty seven percent. What that's actually made up of is we've got four or five buildings that are obviously relatively new, if not brand new. So we don't have any deferred maintenance or very low deferred maintenance. But we also have some facilities, some buildings on that campus that are significantly aged. The deferred maintenance essentially has gone almost to the top of the list. So the ability to isolate at the building level or even in the within the building and, again, have that communication. Now one final thought on that. Let's talk about this medical arts building. Right? Maybe there's a discussion in the master plan. Should we keep that building, or should we tear it down? And I've been asked that question by a CFO. Should we keep a building, or should we tear it down? And my honest answer to them is, I don't know. And the reason I don't know, I don't know if that building serves your community needs. Does it serve your service line needs? Does it serve your business needs? If that building serves your business needs, then keep the building, but understand that you're going to have to invest x million dollars over the next decade to keep that building viable. If the building does not meet your business needs, then the deferred maintenance data would suggest don't put more money into it. Let's let's let's let it age gracefully, right, until it's time to replace it with something else. That's where we can bring a lot of, information to the master planning committee, the master planning group. We're not there to say, tear down a building, keep a building, do this, do that. What we're there to say is, here's what the data suggests. And based on what decisions you need to make for business outcomes, these are the potential financial impacts that we need to consider as part of the infrastructure. I think that's a much more collaborative, type of engagement. So little bit about Brightly strategic asset management. All I'm trying to do here, folks, is get out of the analog world. Right? Get away from spreadsheets and and and and paper data. And we wanna move into collect we collect the data digitally. And and this the origin platform that you're looking at here, that is the the the solution that we're using to provide this type of information. So, ultimately, everything you saw on that dashboard is based on asset level detail where we're able to project the expected useful life of each asset based on the condition, based on the preventive maintenance, etcetera. And all of that data rolled up is what is giving us that those macro inputs. So I wanna open it up, Regina. We got a few minutes left here. If we have any questions, I have not been able to see the chat, but, hopefully, this has been informative. Let me know if if if anybody's got a question that I can answer for you. Yes. Actually, we do have a couple. Thank you so much. Mark, we do have a few minutes. One is coming from Russ. This is so capital intensive, and because even keeping staffing on the care unit floor is a priority, we have seen a reduction in intensity of joint commission compliance requirements. Our number one issue revolves around pharmacy costs. How can we best prioritize the hidden cost list? Wow. That's a good question. So I think there's a lot of different elements on that. The one thing I have not hit on here, and I'm gonna talk when you talk about staffing, I'm gonna look at it from a from a facility perspective. One of the biggest ways that we can influence deferred maintenance and or capital needs is to focus on preventive maintenance, whether it's basic time based preventive maintenance or even looking at reliability centered maintenance type techniques, but that requires operational investment. So the relationship between operational budgets and capital budgets, that's another great way great way to engage the leadership. You know, during COVID, the worst thing that we saw was when we had a capital freeze, we actually saw a lot of organizations reduce staffing on the maintenance side, which prohibited, the performance of of preventive maintenance. And if you do if you do away with some of the preventive maintenance, you actually are expediting the aging of the equipment, which increases the capital needs. So I don't know if I hit your question the way you were the way you phrased it, but I would encourage all of you look at your operational budgets as well and the ability to prioritize that preventive maintenance. In balance, its capital and operational budgets together can significantly impact, deferred maintenance. So great question. I hope I answered it. And we have a question, from someone else named Mark, not you, Mark, another Mark, is how you view rated barrier systems as part of the infrastructure, core life safety, etcetera. This too seems to have been deferred. Great question. So I don't we don't isolate that or I didn't isolate it in the data that we presented, but that's a great, great, input, particularly if you're changing occupancy types. Right? You look at your rated barriers, and it seems like the rules kinda change every once in a while about, fire doors and smoke doors and all that. But I would say taking the life safety drawings and having a clear understanding of all of your barriers, smokes and fires, and and providing that input into the master plan because that may that may well dictate what is possible in in reimagining a space, versus not. So, I didn't think about adding that as a data point, but but, Mark, that's a great comment because that could be a huge liability, that could impact, those master planning, details. Great comment. Great question. Alright. We're gonna do one more. And for those that we haven't gotten to, we will have the questions, and we'll definitely have, Mark or the team get back to you to answer those questions. Last one, Mark, for now is how can industry vendor partners be a valuable resource when master planning? So I think the best way to look at that is with your trusted partners, with people that you you have worked with. A lot of times, I I include myself in that. I have the opportunity to see more health systems. So probably the best way you can leverage your your vendor partners is ask them to provide you with data that is not just specific to your site or your campus, but maybe share best practices or share any data that they have that's anonymized. But they may be able to give you anecdotal or real data that supports your position based on what they're seeing with other customers, in other locations. So that's probably the biggest benefit the vendor partners can provide is perspectives. What's going on in the industry, and then how can we leverage that to, to help you in your engagement with your individual leadership? Great question. Alright. Well, thank you so much, Mark. I appreciate you taking the time to answer questions. We've gone to the top of the hour. For those, like I said, who we haven't gotten back to, we will reach out to your answers. Before we conclude, if you can take a moment to answer a survey as you exit the webinar, we'd appreciate it. And look out for a follow-up email with the information on how to view the recording of today's webinar. Thanks again for attending, and have yourself a great day. Yes. Thank you all. I appreciate it.