Asset Management Framework for Hospitals A, B, and C

This case study discusses the asset management framework for Hospitals A, B, and C, covering topics such as environmental factors, financial management techniques, procurement strategies, project appraisal, stakeholders, and provision of medical services.

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Table of Contents
Framework of asset management................................................................................................................3
Environmental factors and sustainability.................................................................................................3
Hospital B............................................................................................................................................3
Hospitals A, B, and C..........................................................................................................................3
Building fabric condition.........................................................................................................................4
Hospital A, Hospital B.........................................................................................................................4
Hospital C............................................................................................................................................4
Financial management techniques...........................................................................................................5
Hospital B and Hospital C...................................................................................................................5
Hospital A...........................................................................................................................................5
Proper Procurement strategies.................................................................................................................5
Hospitals A and B................................................................................................................................6
Hospital C............................................................................................................................................6
Hospital A, B, and C............................................................................................................................6
Hospital B and C.................................................................................................................................7
Extensive Project appraisal......................................................................................................................7
Hospitals A, B, and C..........................................................................................................................7
The stakeholders......................................................................................................................................7
Hospitals A, B, and C..........................................................................................................................7
Provision of medical services..................................................................................................................8
Hospitals A, B, and C..........................................................................................................................8
Development control plans......................................................................................................................8
Hospital A...........................................................................................................................................9
Hospitals B and C................................................................................................................................9
Responsive nature of the asset management framework..............................................................................9
References.................................................................................................................................................11

Framework of asset management
Environmental factors and sustainability
Hospital B
There is an increased emphasis on the goals of sustainable development, especially in the
construction sector. The increased emissions and waste production of the construction sector is
something that has been brought to the forefront in many building conventions (Matthew, Ma, &
Tan, 2012). As in this case study, the waste reduction should be highly emphasized in hospital B.
Hospital B deals with the demolition of the training building but the disposal techniques are yet
to be defined. Therefore, prior to the actual demolition, waste disposal techniques should be
identified and a proper framework for their disposal identified. Some of the techniques that may
be used in the minimization of waste include recycling and reuse. The construction materials to
be disposed of may be used in the refurbishment in the other sectors and as such, will minimize
the impact of the development on the environment.
Funding
Hospitals A, B, and C
The internal stakeholders may be considered as the decision makers while the external ones may
be considered as the consultants (lowe & Leiringer, 2008). Involving other independent external
stakeholders, through communication and company reports, such as the World Bank may
furthermore result in very desirable outcomes. External stakeholder such as the World Bank
usually lends money that may be used for development purposes. This may be useful in the
development of hospital B as it is capital intensive, having recorded the highest NPC per point
score.

However, considering that the project is highly beneficial to the community, the major funding
will come from government, the stakeholders and investors. In looking for funds from all these
sources, the financial structure of the company should be well pronounced with the long-term as
well as the long-term benefits identified (Liu & Wang, 2008).
Building fabric condition
Hospital A, Hospital B
The refurbishment and/or reconstruction of the three hospitals needs to consider the project
initiation as well as the current state (Olander, 2007).It will specifically apply to hospitals A and
B which require extensive refurbishment. Therefore, the University trust should consider all the
stages of the project initiation and ensure that there is a proper framework that mitigates all the
risks possible. Hospital A has significant refurbishment challenges due to constrain in the
departmental footprint while hospital B requires the refurbishment of the single floor that is
bridging the entrance, emergency assess and maternity. The state of the building will, therefore,
be used to measure the types of works required.
Hospital C
To begin with, the government and the councils should provide standards for the plans
(Aaltonen, 2011). However, the standards should meet the University’s trust approval and
requirements for the hospital. Other groups involved in the analysis of the state of the building
include the project manager, the contractors, and other stakeholders. Some of the risks to be
considered include lack of proper refurbishment measures, wrong measure, and risks that
pertains the cost of the new building.

Financial management techniques
Hospital B and Hospital C
There are two methods of recording the money flow within the hospital trust and this includes
the accrual and cash based (Project management Institute, 2013). However, the technology to be
used in the two hospital options is cash based. The decisions are centered on expenditure on new
assets with little consideration of the assets available (Carroll & Buchholtz, 2014). The decision
should be revised prior to the actual purchase of construction material.
Hospital A
The other system, accrual-based, is focused on the upgrade of the existing assets rather than the
purchase of new ones (Hartney, 2016). The system may be observed in hospital A where there is
an upgrade of the existing services.
Cost estimation is a risk that is encountered in refurbishment because the actual works may be
more than those estimated. This will apply to the three hospital cases because each has a section
that requires refurbishment. However, it will be very detailed in hospital A than in hospital B and
C. Furthermore, considering the financial situation of the hospital trust, there is the need for
extensive financial consultation and management throughout the whole process.
Proper Procurement strategies
Procurement is brought about by proper financial management. For the three hospitals, the
systems used for the purchase of the commodities are accrual for hospital A while cash based for
hospital B and C. However, this is as per the accounting whereby one system focuses on the
purchase of new assets while the other system focuses on the refurbishment of the assets present.

Hospitals A and B
In the case of hospital A and B, the procurement officer should establish the status of the assets
available prior to the purchase of the refurbishment material. This should be followed by the
creation of a system that can continually monitor the state of these assets (Abdulla, Rahman, &
Azis, 2010). Continuous monitoring ensures that the materials can be purchased when the need
arises.
Hospital C
The accrual-based financial system has its major application in the procurement of the hospital’s
assets. The option involves the construction of a new emergency department and the
refurbishment of the current one. The refurbishment part may involve the cash-based system and
there will be the purchase of new assets. Therefore, the procurement process will require an asset
register which will enable effective asset management.
New build, reconfiguration, and refurbishment techniques
Hospital A, B, and C
The three hospitals are to be refurbished with t each method different from the other. In hospital
A, the refurbishment will mainly cater for the existing blueprints while in hospital B and C there
will be the refurbishment of single assessment and the emergency department respectively. In
line with all the three building refurbishment requirements, the contractor should be well
conversant with the existing blueprints to prevent any unwanted damage. Furthermore, the
financial manager should ensure that a proper refurbishment schedule is set up, maintaining the
timeline to a minimal. This will require the project manager to ensure that the project scheduling
and the critical path methodology is applied prior to the actual works.

Hospital B and C
Hospitals B and C involve new buildings and this will require proper scheduling, costing as well
as management. The critical path methodology has extensively been used to determine the time
required for project completion (Turner, 2008) and it may be of significant importance to the two
projects.
Extensive Project appraisal
Hospitals A, B, and C
There are a number of appraisal techniques that may be used in selecting the best option from the
three hospitals. Some of the techniques that may be used in assessing the economic feasibility as
well as the payback period, accounting rate of return, the internal rate of return and the gross
ratio among others (Beaume, Maniak, & Midler, 2009). The appraisal techniques that have been
in the selection process are the net present cost, the net present cost per point score, the ranks, the
weighted scores and the raw sources. These methods may give significant insight on the way
forward but a thorough analysis is required prior to the actual selection. The three hospitals: A,
B, and C have varying strengths and weaknesses and it may be wise to use a number of project
appraisal techniques.
The stakeholders
Hospitals A, B, and C
Stakeholders have varying requirements on the methodology to be used for the development, the
returns to be obtained, the funding among others. The project has a number of stakeholders who
include staff, the Patients and visitors, volunteers, GPs, CCGs Service providers and other
external stakeholders. Regardless, it is important for the project manager to pay attention to the

requirements of each without comprising on the mission and vision statement of the organization
(Eskerod & Huemann, 2013).
Decisions by the project manager are influenced by the stakeholders as well as other investors. In
trying to ensure that there is efficiency in the methods used for management, he/she has to
consider all the opinions and weigh them against all construction standards and requirements.
Furthermore, the project manager should be in a position to source for funds from the investors
as well as other stakeholders.balance sheets as well as company reports will ensure that there is
adequate funding.
Provision of medical services
Hospitals A, B, and C
There are a number of issues that have led to the need for change in the three hospitals. These
factors include patient flows, capacity, adjacencies, mortality and inefficiency of the staff.
Refurbishment and reconstruction are just part of the plans for change. However, the number, as
well as the skill of the staff, will determine the level of service to be provided to the patients.
The various rooms, as well as the adjacencies, should cater for the needs of the patients. A bigger
resuscitation area with more beds, bigger spaces, an increase in the number of cubicles should be
considered in the plans. However, all this will require a complete reshuffle of the current staff
and the employment of the sufficient number of staff to cater for all the patients’ needs. All this
is a requirement in the three hospitals.
Development control plans
The plans to be used for the development of each hospital will be different. The plan to be used
in each case has to consider the condition of the building and the modifications required.

Hospital A
The hospital’s development plans are centered on refurbishment. Therefore, prior to project
initiation, the project manager should consider various milestones that should be attained within
each given period. Some of the milestones may be center on walling unit, ceilings, floor among
others. By doing so and keeping the project works under check, he/she will be able to provide an
alternative route whenever an unforeseen circumstance occurs.
Hospitals B and C
Hospital B involves the demolition of the training department and the construction of a new
emergency department. On the other hand, hospital C is centered on a new emergency building
and refurbishment of the current one. The works involved in the two hospitals are numerous as
compared to A and as such, the project manager will have to develop proper control options.
Most are centered on new building standards and some will be centered on the hospital
standards.

Responsive nature of the asset management framework
There is the need for the asset management framework employed in the above scenario to be
very responsive to the nature and demands of the stakeholders. The asset lifecycle is the major
issue because it is influenced by numerous internal as well as external factors. In this, the asset
lifecycle is to be profiled from the financial as well as the non-financial orientations with the
need for an impromptu modification looked (Maheshwari, 2006).
The asset management lifecycle is very much prone to design and redesign concepts which
generally affect the asset management framework (Ponnappa, 2014). Therefore, the management
has to consider various long-term factors which may involve increased costs among other
modifications. The various stakeholders may be faced with numerous challenges in the future
which may drastically reduce the input to the decision-making process and as such, the
framework should be flexible. In the hospital design and refurbishment, the asset refurbishment
and construction has a maintenance routine of 4 years but this is subject to the decisions of the
stakeholder and the funds available. Therefore a change in the stakeholder decisions has to be
considered in implementing the framework.
The need for reinvestment is another factor that the framework should consider. This plays a
major role in information disbursement within the organization .and is usually brought about by
the changes that usually occur in the environment, the business and the operation of the asset
(Eskerod & Jepsen, 2013.The investors and stakeholders present are influenced by all those
factors and as such, there might be a change in their investment. This has to be considered in the
framework.
The responsive nature of the framework determines the ability of the organization to adapt to the
various stakeholder changes. Though the framework might be designed in such a way that it

satisfies all these changes, the project manager may be the one in the most of unsuitable
situations. This is because he has to manage the various changes without damaging the
framework already in place while at the same time meeting the expectation of each stakeholder.
The initial design and implementations are usually overlooked by the project manager and in
case of any change within the asset, he/she is responsible for the transition. Therefore, this might
be a problem when the changes are big and cannot be easily implemented yet need to be met.
Furthermore, the project manager is mandated with the responsibility of keeping the benefit-cost
ratio at a desirable level and therefore, changes in the stakeholders’ expectations and investments
might lead to a lower benefit-cost ratio which might put him/her in a precarious situation (Boxall
& Purcell, 2011). Therefore, the decisions that are made by the stakeholders create uncertainty
for the project manager especially when the decisions affect the overall structure of the project.

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