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Shirley Ryan AbilityLab in Chicago offers rehabilitation services through eight off-site facilities, six of which are leased. LaMar Davis, CHFM, CHC, the organization’s director of facilities, engineering and support services, knows the challenges of managing off-site facilities intimately.

“Some of our off-site locations are storefront retail spaces, some are on hospital campuses and one is in a hospital itself,” Davis says. “We like the ones on the hospital campus and in the hospital, because we are dealing with folks who know our business [and] who are familiar with Joint Commission requirements. They are partners in our success. The challenge is in those that are in office buildings or retail spaces. When you talk to them about the Joint Commission, they go, ‘Huh?’ They have no idea.”

Having a landlord who is unfamiliar with accreditation and regulatory requirements is a key challenge in managing off-site facilities, but it’s only one. Other challenges range from allocating facilities staff time to off-site locations to managing construction in a leased space.

Many of these issues were discussed in a panel discussion titled “A Different Animal in the Zoo: Managing Outpatient Facilities and Medical Office Buildings” at the American Society for Healthcare Engineering’s (ASHE’s) Annual Conference & Technical Exhibition last August, which is quoted in this article along with new material from subsequent interviews.

“The number and the types of outpatient facilities continue to grow and probably will continue to grow with the type of health care model that we are moving toward,” says Tim Adams, FASHE, CHFM, CHC, ASHE’s director of leadership development, who moderated the panel. “It can be just a little bit of a different animal to manage.”

Regulatory requirements

Perhaps the biggest challenge in managing an off-site facility, at least when that facility is not owned by the hospital, is meeting accreditation requirements when the landlord is unfamiliar with them.

For example, the requirements regarding fire drills and inspections of life-safety equipment that a health care facility needs to meet are vastly different from what a nonhealth care building would normally perform. And if that nonhealth care building does perform these inspections, it is likely that management won’t document it the way an accreditation organization requires.

“We were involved in a case where the landlord owned a portion of the emergency power system, and the health care organization leasing the building owned the other portion,” says Steve Spaanbroek, FASHE, CHFM, CHC, CEO of MSL Healthcare Partners Inc., a national environment of care consulting firm in Barrington, Ill. “We had a great deal of difficulty getting them to test that equipment according to how we needed it. Basically, we took a lump for it from the Joint Commission because we were lacking proper documentation.”

Some regulatory requirements affect other tenants of a building — such as fire drills and sprinkler testing — so they are particularly onerous in a leased building that includes nonhealth care tenants. Nevertheless, they are necessary for the health care tenant and, in the long run, probably good for all tenants.

“Here’s my argument back to the landlord: ‘You don’t want your building to burn down,’” Davis says. “These are not things the Joint Commission just makes up. They are [National Fire Protection Association (NFPA)] standards that have been there forever. So, your insurance company should also be looking for these things. My perspective is, ‘Hey, we’re helping each other out.’”

Helping the landlord to understand regulatory and accreditation requirements and, when appropriate, codifying those requirements in the lease or related documents, are keys to overcoming this problem and many other off-site facilities problems, Davis notes.

“In some cases, I have printed out the Joint Commission standards for the landlords and walked them through them,” he says. “And sometimes we cut and paste the standards and put them right in the lease.”

Getting things done

Off-site facilities need the same services as the main facility, of course, but it’s uncommon for a health care organization to permanently locate facilities staff at a remote location. That means services like cleaning, maintenance and inspections need to be handled differently.

Davis says that because his off-site facilities are spread across a great geographic distance, he relies on his own maintenance crew in some cases, third-party contractors in others and the landlord in the rest.

If the work is done by the latter two — third-party contractors or landlords — it’s essential that they know the level of service required by a health care organization.

For example, the cleaning requirements of an ambulatory care center are far greater than those of an attorney’s office. Surfaces need to be thoroughly disinfected, sharps containers need to be properly emptied and cleaning frequently has to happen midday at a moment’s notice, not just after hours.

“We just moved into a property near our hospital and the landlord wants to be responsible for cleaning, despite [our] begging him to allow us to bring in our own cleaning crew,” Davis says. “We’re having issues already. It’s not really anybody’s fault — they just didn’t understand that we require a higher level of cleaning.”

Davis says he has a cleaning crew ready to move into the building as soon as the landlord agrees to that change in procedure. Of course, regardless of who does the cleaning, the health care organization is on the hook if there’s a problem.

“Remember, you still have liability regardless of whether you’re contracting out that service or having the landlord take care of it,” says Roger Bradley, CHFM, CHC, regional director of facilities for BayCare Integrated Service Center in Tampa, Fla. “You’re the person providing the service, so you still have liability. And quite frankly, when people sue, they sue the biggest money.”

Other maintenance, such as replacing light bulbs or making minor repairs, may be more conveniently handled by the landlord’s maintenance department. Even then, it’s important that the landlord understand that the medical facility needs to be handled with care.

Spaanbroek remembers a time when a building owner hired a new facility manager who was unsatisfied with the directories on the circuit breakers and started flipping breakers to see what parts of the building turned off.

“There were patients on the table at that time,” Spaanbroek says. “Fortunately, they were asleep, but their loved ones were in the waiting room when everything went dark. Needless to say, there was a quick meeting [with the landlord] over that one.”

An important way to manage the facilities work needed in remote locations is to include those locations in the computerized maintenance management system, Davis notes. “That way, when your folks in the off-site [facilities] need a bulb changed, they should put in a work order so it can be tracked, even if the landlord is going to do it,” he says.

Good neighbors

Another issue that often affects off-site facilities is that many have nonhealth care neighbors. These other occupants may not appreciate the special needs of health care organizations, so it’s important that the organization or the building owner make sure that the tenants are compatible.

There is a long list of things that health care organizations frequently need that may disrupt the lives of other tenants. Regular fire drills are not part of the life of most office dwellers and can be a serious inconvenience. Often the disruptions relate to the building usage. For example, when a health care facility is not located on the first floor, it needs more elevator access, including access for gurneys, than do most other tenants. Many health care facilities also need drop-off and pickup areas that may disrupt the normal flow for other tenants.

Kaiser Permanente, Oakland, Calif., has about 700 outpatient facilities, 260 of which are leased. Brian McElfresh, Kaiser’s executive director of national functions, says that being open with the landlord about his organization’s needs vis-à-vis other tenants is essential.

“Kaiser Permanente has experienced significant membership growth over the past several years, which has led us to expand our physical footprint into new spaces and partner with new landlords,” McElfresh says. “Landlords that have had us for a while understand that even in a standard clinical setting, the population coming in for health care is not a typical office worker. However, with some specialty services, there may be special considerations that you should disclose up front. You have to have communications as open as they can be, and you set parameters that everyone can live by.”

For example, McElfresh notes that other tenants may feel uncomfortable encountering patients in a shared lobby or other common spaces of an office building, so separate access may be appropriate. Health care facilities also have greater parking requirements than normal offices; that issue also needs to be discussed openly so that the landlord and other tenants understand.

The relationship issues with other tenants can even extend to unconventional locations, such as shopping centers. “One area we have struggled with is when we go into a mixed-use project or shopping center,” McElfresh says. “Our model has a pharmacy associated with it, and if you’re in a mixed-use or retail location with a retail pharmacy chain, they generally have negotiated exclusives with those tenants. So, then we need to negotiate a waiver with those tenants.”

Construction issues

Sometimes it’s the other tenants that affect the health care tenant. Spaanbroek remembers a time when a landlord started modifying a space adjacent to his organization’s surgery center to prepare it for a new client.

“So, they’re doing heavy demolition, all types of construction,” Spaanbroek says. “They had never heard of a construction-risk assessment, infection control-risk assessment or certainly any infection control-risk mitigation recommendations.”

Spaanbroek’s organization went in and set up protective measures to isolate their space, but it had to be done in a hurry. “All of that could have been avoided with some effective communication,” he says. “If they had given us a couple of days’ notice, we could have been much more proactive about it.”

Another construction-related challenge with a remote location is managing a build-out. Doing that is difficult enough when it’s done on a hospital’s main campus; remote work, especially on a building not owned by the health care organization, represents another level of challenge.

Bradley remembers a build-out in a leased building that ran into problems because the landlord wanted to use his own contractors for the work. Because those contractors didn’t have health care construction experience, Bradley had to meet regularly with the design team to make sure the plans were up to code, and then closely oversee the construction. Even with that oversight, some errors slipped through.

“I remember that instead of their using the firestop material that is required by NFPA guidelines, the contractor used stuff that is not rated for fire,” Bradley says. “So, they had to rip it all out and replace it.”

Plumbing is another key area that requires knowledge of health care requirements, Bradley adds. A contractor unfamiliar with health care requirements may not comprehend the risks of waterborne pathogens and the attendant prohibitions against dead legs, certain types of valves and other plumbing elements.

Facilitating communication

These issues can be facilitated by solid communication among the involved parties, which may include the landlord, other tenants, outside service providers and, of course, the health care organization itself.

Kim Davis, system director of property management for Catholic Health Initiatives (CHI), believes that good communication is key to the landlord-tenant relationship before, during and after the sale of buildings. Recently, CHI sold 65 medical office buildings to Physicians Realty Trust (PRT) and CHI remained as a tenant in many of those buildings. Davis helped to facilitate the communication among the new landlord’s team and hospital leadership and personnel.

“It involved synchronizing weekly meetings that facilitated positive communication among PRT’s leadership, its third-party management companies, and our regional real estate directors, property managers and facilities maintenance engineers,” Davis says. “It also involves annually accompanying PRT’s leadership and property management teams to the various CHI markets to present the annual stewardship report to hospital CEOs and chief financial officers. The annual meeting helps both parties to understand the hospital’s vision for the future and ensures strategic alignment for future leasing and capital projects, addresses tenant challenges and improves the overall campus operations and experience.”

That type of facilitated communication has paid off, Davis says: “[PRT] is a great partner for us and is receptive to our suggestions, fostering a positive give-and-take relationship.”

Because many off-site building relationships begin with a lease, it’s valuable to have a facilities management leader at the table when those are negotiated so that key facility issues are not overlooked in favor of saving a few dollars.

“What often happens is the person at the health care organization negotiating the lease doesn’t know the requirements,” Adams says. “All they’re looking at is square footage, who is doing the build-out and the cost per square foot. The more ideal situation is that the facility director, or somebody else with knowledge of the codes and requirements, is an integral part of the team negotiating the leases.”

In the best-case scenario, that lease negotiation and subsequent relationship-building leads to a mutually beneficial relationship.

“There are situations where the tenant and the building owner have an excellent relationship,” Adams says. “The owner knows what the health care organization needs and you have a long-term lease that serves everyone well. The health care organization gets what it needs and the owner gets a good return on investment. Everybody wins.”

A growing portfolio

Whether they are owned or leased, off-site facilities can be a challenge on many levels.

But health care organizations that recognize those challenges, plan for them and face them with open communication are more likely to succeed.

“As we focus more on outpatient care and preventive care, the need to have more, smaller facilities is growing,” according to Adams. “Managing that growing portfolio of buildings effectively is important.”

Ed Avis is a freelance writer based in Chicago.