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PurposeThe purpose of this paper is to describe research which investigated the interdependencies between facility management performance and costs, and primary processes in hospitals. Through the implementation of the German diagnosis related grouping (DRG) system and the resulting cost pressure, the need for optimized use and operation of the spatial resources in hospitals is growing. In the DRG system, the provision of ready to use infrastructure is treated as a fixed cost and is allocated to patient cases by a single cost driver. In reality, very different services are needed to provide ready to use functional space.Design/methodology/approachA primary activity based cost model for facility management (FM) services in relation to functional space units in the hospital is developed. Using process and cost data of an empiric research study from four German hospitals, a model is developed for a key functional space unit in the hospital, the operation unit. The relevant FM services structured by a product‐oriented approach are determined by real data. For these services, process figures are derived and implemented in a basic cost estimation model. The cost estimation model is compared to the cost approach of the DRG system.FindingsIn an explorative study, the model provides an approach for a patient focused cost allocation of FM services for the operation unit. Depending on the time spectrum of operations great differences between this approach and the legal cost allocation approached in Germany can be determined. One way for hospitals to face the consequences may be the determination and optimization of relevant FM services according to a primary process portfolio.Research limitations/implicationsThe activity based cost model should be developed for further space units in the hospital. Thus, a holistic approach to FM and strategic planning of space and FM services could be achieved. Further, the explorative study should be enlarged to a greater database for the development of general key figures for FM in relation to the primary processes.Practical implicationsThe model can be used by hospitals for strategic planning of the FM costs and services in relation to the capacity and utilization of the operation unit. The impact of changes of the primary performance portfolio on the utilization of corresponding infrastructure can be simulated. Thus, cost data can be made available to support strategic decisions.Originality/valueThere is no existing cost model for the hospital considering FM in a holistic way in relation to the primary processes.

PurposeThe increasing percentage of aging population (longer life expectancy) and the changing financial policies in the healthcare systems put governments under pressure to optimize its healthcare expenditures without compromising quality. One way to cut down the costs is through improving and optimizing the facility management processes. This paper aims to focus on the issues surrounding this.Design/methodology/approachTo demonstrate the application of the research, service management (SM) process which deals with the building services related requests from the customer, one of the facility management (FM) processes, is taken as the focus of this paper. The study applies the lean principles to the SM process to identify the value added and non‐value added activities in the process. Process logistics flow is modified to comply with the lean theory. The collected data from six participating hospitals in Germany for the two months of the year 2002 are also used as inputs for the simulation model.FindingsSimulation is used to quantify the impact of the lean principles proposed changes on the system performance. The simulation analysis has proved to be an effective tool in the selection of optimum resources for the SM process in hospitals. The implementation of lean and simulation will assist the facility manager in the selection of the optimum crew size in various sub processes, thus eliminating the trial and error approach.Research limitations/implicationsTo develop a generic model for all categories of hospitals, substantial data are needed for the simulation model. In this paper, the SM process results from one category of hospitals are presented.Practical implicationsThe methodology can be extended to the other FM processes in different hospitals, with proper modification.Originality/valueThe simulated process model was useful to analyze “what if” scenarios for the decision‐making regarding optimum resource allocation.

PurposeHealthcare systems are very costly and the inpatient treatment in hospitals is a major part of these costs. The question is, how can greater efficiency be effected without influencing the core business of a hospital – the cure of patients. Through improving the process flow of facility management (FM) processes, savings within these processes and less disturbance of primary processes should be accomplishable.Design/methodology/approachIn order to help introducing professional FM methods in hospitals the OPIK research project has designed standard processes for typical FM services. Processes have been field tested and evaluated in terms of interference with the core process as well as cost and quality factors have been determined.FindingsThe research has shown that standard processes can be defined and the performance can be improved through restructuring the process flow by having detailed knowledge of the process characteristics. The analysis of data through linear regression shows a significant correlation between product costs and possible clearing units. These results encourage to look for reasonable methods of cost allocation.Research limitations/implicationsIn terms of statistical significance the good results can be up valued through increasing the amount of data by applying the method in other hospitals. Future activities should concentrate on this room for improvement.Originality/valueFor the first time a reasonable basis for comparing FM processes in hospitals has been defined.

The German health care system is in dire straits financially. The costs of stationary patient care in hospitals are prohibitive. Currently, 30 per cent of hospital costs are a result of facility related processes, a percentage representing the equivalent of more than €14bn annually. Optimising facility‐related processes in hospitals has the potential to incur major savings and improve medical processes at the same time ‐ meeting the strategic need to reduce health care costs without having a negative impact on the quality of the core competencies and processes of hospitals. This paper presents the findings of the OPIK research project, which analysed the interaction between primary (medical) and secondary (facility management) business processes in six hospitals, with a view to identifying a holistic approach and comprehensive framework for evaluating business processes to ensure their optimisation.