Following an extensive evaluation process involving three competing companies, GHS selected Johnson Controls (Milwaukee) as its performance contracting program partner. Johnson Controls, in conjunction with GHS, completed a comprehensive operational assessment, or audit.
The combined commitments of GHS and Johnson Controls to improve customer service and reduce costs in non-clinical cost centers drove the audit team. “Each improvement identified during the process of the audit was reviewed on its own merit by a team of GHS upper-management department representatives. The bundle of improvements that emerged was arrived at by team consensus. In the end, everyone was comfortable,” according to Craig Tindall, interim vice president of general services.
The performance contract realized a capital investment of $10.9 million into the hospital’s infrastructure and general service operations with the cost paid for by the energy and operation gains generated from the improvements. The project consisted of the initial capital construction and installation, and ongoing support and performance management.
Robert Barbier, the hospital’s senior vice president of finance and chief financial officer, summed it up by saying, “Any creative way to improve the efficiency of the physical plant such as financing [the project] through operational savings is just plain smart.” Spears adds, “Like any public institution, we would have been foolish for not being aggressive with getting our facility costs in hand.”
Working Together
The construction phase was completed on schedule and within budget. Tindall says, “The construction phase went very smoothly. Any high-profile elements that could impact patient care in a 24 [hour], 7 [day] operation were closely coordinated to manage all critical areas.”Each facility improvement has allowed GHS to maximize its investment dollars and strengthen its delivery of high-quality patient care.
Major capital replacement and technology upgrades have enabled the physical plant operations staff to increase their overall service effectiveness by improving response times and reducing the risk of expensive equipment downtime. Efficiencies were realized when three higher-capacity chillers replaced the old chiller equipment, the ventilation system was optimized, and what used to be four separate chilled-water systems were tied together. “Reconfiguring the chilled-water system has given us more control in areas directly impacting patients and staff, so we’re able to positively impact customer services,” says Tindall.
In addition, the lighting systems throughout the facility were completely renovated with more energy efficient technologies, without negatively impacting existing light levels. GHS reduced electrical usage by 38% from 13,765,000kWh to 8,475,000kWh. Lighting was also dramatically improved in the parking garages, where security is critically important, allowing patients, visitors, and staff to feel safe. The lighting project is a major victory from an environmental impact perspective, effectively eliminating the emissions from an equivalent of 730 cars, or planting 1,494 acres of trees.
Maximizing Resources
Johnson Controls personnel are working closely with the functional departments to provide in-service and on-site training. According to Spears, “Developing the staff through training and exposing them to the experts (Johnson Controls) means improved performance that translates across the organization – individual skills improve, internal customers become more confident in each other, and morale increases.” Additional on-site Johnson Controls personnel augment the GHS staff for monitoring and reporting performance results to executive management, and identifying additional cost-reduction opportunities.Delivering quality patient care is increasingly more dependent on keeping expensive biomedical equipment in operation. For the clinical engineering department, repair expenses associated with selected, high-end imaging equipment and ventilators are managed by an on-site Johnson Controls partner. The department was able to reduce maintenance costs while maintaining current quality standards. Terri James, director of clinical engineering, adds, “We’ve been able to free up staff from maintenance on those pieces of clinical equipment, allowing redeployment back into department, vacancies. We’re also seeing streamlining of the associated paperwork processing, especially account payable and purchase order generation.”
A Partnership Focused on Continuous Improvements
As a result, GHS was able to reduce operating costs by $2.2 million annually and continues to maximize staff efficiency with ongoing training and process improvements. The hospital intends to remain proactive about identifying additional opportunities that result in efficiency gains with their partner Johnson Controls. “Retrofitting the physical plant to lengthen the life is a good strategy for GHS and the rest of the industry,” adds Barbier.Tindall agrees, “Johnson Controls and Grady Health System have a 10-year partnership, not a vendor to institution relationship. It’s an attitude of ‘how can we (Johnson Controls) make Grady more efficient long after the contract is over.’”
Spears concludes, “What distinguishes Johnson Controls is the credibility of the people. Their willingness to hear the customer’s perspective is paramount. They know where we are headed and what our needs are.” According to Edward Renford, president and chief executive officer, “This is a good example of a public-private partnership. This project allowed Grady to take advantage of Johnson Control’s expertise and our knowledge of the health system to make real improvements.”
