A quantitative rationale for investing in healthcare facilities

When considering investing in its facilities, a healthcare organization should determine its competitive position by quantifying factors such as average age of plant, inpatient days, occupancy rates, and inpatient versus outpatient revenue. Average age of plant in years (AAP) can be compared with inpatient days per 1,000 population to determine an organization's AAP relative to the market and thus whether investment is warranted. Occupancy rates per facility can be compared to the total of all unoccupied beds in an organization to determine if some facilities should be consolidated or closed. Understanding the relationship between revenue trends and the number of projects undertaken to address shifts in inpatient and outpatient volumes can help providers create the optimal environment for patient care delivery.