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Episode 16

Health Care Asset Management And Preventive Maintenance Strategies

with Scott Mason, CHOP, FRSPH(UK), HCC of Facility Health, Inc.

Scott Mason, CHOP, FRSPH(UK), HCC is Director of Business Development at Facility Health, Inc. where he helps organizations with CapX & OPX Planning, Enterprise Asset Management, Risk Management, and Life Safety challenges. Mike Petrusky asks Scott about his vast experience in the facilities maintenance and asset management disciplines and they discuss some of the specific challenges related to regulated industries like healthcare and food and beverage services. Mike and Scott explore ways of making the business case for preventive maintenance using risk rankings and engineering scores along with other asset management strategies. Before taking a deep dive into this subject, Mike and Scott share some inspiration and have fun with a podcast karaoke tribute to The Eagles!

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Connect with Scott on LinkedIn: https://www.linkedin.com/in/scott-mason-chop-frsph-uk-hcc-a4547b21/

Learn more about Facility Health, Inc.: http://www.facilityhealthinc.com/

Connect with Mike on LinkedIn: https://www.linkedin.com/in/mikepetrusky/

Learn more about the iOFFICE Asset Division and explore more interviews at: https://www.assetchampion.com/

Share your thoughts with Mike via email: podcast@iOFFICECORP.com

Read the full transcript:

Scott Mason (00:00):

The traditional model today seems to be run to fail, whether that's in commercial real estate or food and beverage or healthcare. You would think that especially in the latter two, with the higher regulation, that there would be a much bigger emphasis placed on preventive maintenance.

Mike P (00:21):

This is the Asset Champion Podcast where we talk with facilities maintenance and asset management leaders about the industry trends and technologies impacting your organization. This show is powered by the iOFFICE Asset Division, delivering easy-to-use maintenance management software tools to help you drive powerful asset performance.

            Hey, everybody. It's me, Mike P, welcoming you to Episode 16 of the Asset Champion Podcast. Thanks for tuning in. I'm glad you're here, because this week on the show I have for you another interesting conversation with someone bringing years of experience in the facility and asset management world, but not just that, hey, I'm not afraid to admit it, he's got a great voice for podcasting and it's not just because he's got a great microphone. I'm not jealous. Scott Mason of Facility Health, Inc. helps organizations with both capital and operational expenditure planning, enterprise asset management, risk management and life safety. We talk about some of the specific challenges related to regulated sectors, like the healthcare and food and beverage industries. Plus, I asked Scott to share some great inspirational resources for us, and he joins me in a little podcast karaoke, which is always fun, right? Oh yeah. Enjoy.

            We're back on the Asset Champion Podcast. I'm excited to welcome Scott Mason to the show. Hi, Scott.

Scott Mason (01:52):

Hey, Mike. How are you today?

Mike P (01:54):

I'm doing great. Thanks for being here.

Scott Mason (01:56):

Absolutely, looking forward to it.

Mike P (01:58):

Scott is the Director of Business Development for Facility Health, Inc up in Michigan. How's life in the Wolverine State?

Scott Mason (02:11):

In the Mitten.

Mike P (02:12):

The Mitten.

Scott Mason (02:13):

That covers all the Spartan fans and the Wolverine fans, and so that there's no-

Mike P (02:18):

Okay. The Great Lakes are nearby too, right?

Scott Mason (02:20):

Yeah. We're about 35 miles from Lake Michigan, here in Kalamazoo, and in the southern part of the state. Just love the summers especially here.

Mike P (02:30):

Good weather before the snowfall begins.

Scott Mason (02:33):

Absolutely.

Mike P (02:34):

Tell us a little bit more about what you do for Facility Health.

Scott Mason (02:37):

Sure. We work predominantly in the healthcare vertical. We are also in higher ed and food and beverage, but our predominant base of business is in healthcare and hospitals on asset management. That's a pretty broad term. When we talk about asset management, everything from inventories to proper preventative maintenance tasks and scheduling, CMMS optimizations, creating standardizations, obviously CapEx, OPEX, and master planning, budgets as well, can migrate pretty agilely between construction and maintenance forums. It's a pretty broad stroke is what we do, but we provide the tools for facility managers in the C-suite to make long-term capital and operational decisions.

Mike P (03:31):

Wow, quite a lot of experience and great expertise, which is something I'm hoping to tap into today because I need to learn more, Scott, about this world of asset management. As you said, it is a broad and deep one, and I'm just beginning to scratch the surface. We're going to get there, but before we do, I like to learn a little bit more about the personal side of my guests. How'd you end up where you are today?

Scott Mason (03:53):

I swerved left when I probably should have gone right. No, I grew up as a son of an industrial plumber in the northeast. My dad traveled all over New England.

Mike P (04:04):

Wow.

Scott Mason (04:05):

For me, if I wanted to spend time with him, it was going to be commuting in a truck and on the job site. That was a time when you could actually go to job sites. So I grew up in the trades, reading blueprints, digging ditches, and I learned a weld early on, lots of trade things. I went in the Navy as an electronics technician and got out and got into the fire alarm industry, which led me deeper into life safety management. But I started working with FHI probably about two and a half years ago on kind of a visionary project that the two of us had for a major customer here in Michigan. It led to a great working relationship and a lot of synergies. They have a stable of recovering facility managers and engineers that provide a lot of the expertise that we need to do what we do.

Mike P (04:58):

That's great. You and I have crossed paths several times at industry events, so I'm excited to have a chance to dive a little deeper into your experiences and what we can learn from them. But you know, Scott, I've got to ask you about music first. I'm a big fan of music, anybody who's heard this show knows that. What motivates you? What kind of music are you listening to?

Scott Mason (05:18):

You know, it's funny because my all-time favorite band was and still is anything by the Eagles.

Mike P (05:26):

Classic, yeah. Don Henley.

Scott Mason (05:28):

Sure.

Mike P (05:28):

What's your favorite Eagles song?

Scott Mason (05:29):

I love Hotel California. Not big on the message in it now that I'm an adult, but I just love the music in it.

Mike P (05:38):

That's a staple in the classic rock library for sure.

Scott Mason (05:41):

It is, but I was in the Navy when Don Henley started doing some of his solo stuff. I remember, I was stationed in Pensacola and listening to Boys of Summer. Yeah, we were the boys of summer at that point.

Mike P (05:54):

I bet. Dirty Laundry? I hope you didn't have any dirty laundry on the ship.

Scott Mason (05:57):

Yeah, Dirty Laundry. I was on shore duty most of my time, so I was pretty spoiled.

Mike P (06:02):

I got you. Hotel California has got to be number one. What's next? Life in the Fast Lane maybe? Life in the Fast Lane?

Scott Mason (06:08):

Yeah.

Mike P (06:08):

(singing).

Scott Mason (06:10):

(singing).

Mike P (06:19):

I love it, a little podcast karaoke from Scott.

Scott Mason (06:22):

Take it to the Limit, that's another great song.

Mike P (06:29):

Oh, there you go. (singing). Good stuff. Well, I appreciate you playing along with the podcast karaoke and lending your voice. It's great sound, and great microphone, by the way. You are hitting it on all cylinders today.

Scott Mason (06:39):

Well, thanks.

Mike P (06:39):

Maybe it's just your voice. It's that voice. You need to be a DJ in your next career.

Scott Mason (06:44):

I've got a face for radio, there we go.

Mike P (06:47):

You and me be both, my friend. That's awesome. Well, this show is all about asset management for sure, but it's also a place to help inspire people. Do you have a favorite book or a leader that's influenced you?

Scott Mason (06:58):

You know, I always go back to a baseline book that I have, outside of the Bible, which I think is a great business tool if you study it.

Mike P (06:58):

Absolutely.

Scott Mason (07:08):

But I love John Maxwell for leadership issues, but Stephen Covey's Seven Habits, and I think that everybody talks about it, but it's a book that if you really study it and apply it, it's so rich. One of the key things that I use in conversations with whether it's the C-suite or facilities directors are the story in there about the goose that laid the golden egg. It talks about the operations manager that comes in and he wants to make a name for himself. He runs the equipment hard, he doesn't PM it, he's not spending the money, he's got great low cost of operations to the facility and he's able to run throughput a max capacity. That's great for his four to five-year tenure that he's there, and then the poor guy comes in after him and he's got to rebuild all the equipment and replace what has been run to fail. I think that's a great analogy of what's going on industry-wide in facility management and asset management, quite frankly.

Mike P (08:16):

Yeah, so let's get into the nitty-gritty here, Scott. The discipline of asset management is a vast one, as we mentioned, and you have experience across a lot of different areas in this space. From your perspective, how do you define asset management and where can we help most?

Scott Mason (08:34):

Asset management in its simplest form is managing the life cycle of the asset. The best possible outcome is for a facility manager or an operations manager to get the most out of their equipment for the longest amount of time at the amount of cost.

Mike P (08:56):

Sure.

Scott Mason (08:57):

There's various ways to approach that. The traditional model today seems to be run to fail, whether that's in commercial real estate or food and beverage or healthcare. You would think that, especially in the latter two with the higher regulation, that there would be a much bigger emphasis placed on preventive maintenance, but it's very prevalent in the discipline today to just run your equipment to fail. That's a great facility management model, and it actually is a model that facility managers are taught, but you have to build in that redundancy and that's the part that how are you going to have a $4 million chiller sitting on the sideline waiting to fail.

Mike P (09:45):

Yeah, wow.

Scott Mason (09:46):

There's a lot of thought that needs to be put into it.

Mike P (09:48):

Yeah, so with that in mind, is your role then to make the case for preventative maintenance?

Scott Mason (09:55):

What I think makes us different is we look at each asset individually and we assign a risk ranking that takes into consideration lots of different elements. There's NFPA 99 as a risk ranking for health care, there is what is the space that's served, there's the what is the risk to the operational side of the business. We look at a lot of different variables and we create our own little algorithm that assigns it a score, so we're able to adjust each asset by risk. The way we get it, we were talking earlier about how the sausage is made, the way we go about that is we get a baseline of the equipment. That's accomplished usually through a facility condition assessment and looking at their preventive maintenance and break/fix logs. We're able to assign each asset then an engineering score as well.

Mike P (10:52):

Okay.

Scott Mason (10:53):

When we start to look at those things, then you've got the condition of the asset and you've got a risk score, so when you start to roll up budgetary costs, the average facility we find, per 500,000 square feet, has about $30 million in deferred maintenance.

Mike P (11:13):

Wow.

Scott Mason (11:14):

So you've got a 1.3 million square foot hospital, they're looking at about 75 million in deferred assets, which means that either the assets are beyond their useful life, it doesn't mean they're bad but it means that they're beyond their useful life and there should be some strategic plan, or the preventative maintenance, the can's been kicked down the road.

Mike P (11:36):

Sure, yeah.

Scott Mason (11:38):

We're able to model that in a lot of different ways and show if you increase preventative maintenance you can extend the life. If you haven't been running it too long without preventive maintenance, it's kind of like a car. I mean, how long can you run it without changing the oil, and how are you going to extend the life if you've had the car for three years and you haven't changed the oil? How long you really going to extend the life? That's the how behind the what.

Mike P (12:01):

But it's surprising to me that in these regulated industries that people would not already have a strategy in mind. Is it still a big gap out there, as far as if these organizations don't currently have a strategic asset management plan in place, how are they meeting the expectations of the regulations?

Scott Mason (12:19):

Yeah, great question, because CMS, which is the governing body over healthcare, that's how they get paid, their Medicaid and Medicare reimbursement is through CMS, and they pass that accreditation onto various accrediting organizations, whether it's DNVGL or a joint commission or HFAP, and they look at what are they doing for preventative maintenance. Part of their requirements is actually to do a hundred percent of the required preventative maintenance or create a program, they call it an AEM program, which is an alternative equipment maintenance program, but you have to have justification and you have to have a lot of tools, which we built our software to do that. We're able to make that justification through running it through our Origin software.

            It's interesting, you and I met and you were doing the FM Innovator Podcast, and then you had just transitioned to iOFFICE. We spent some time with them at IFMA Fusion in Chicago and really liked their space management. But one of the big things we see is CMMS systems. Every single CMMS system does about 80% of what a facilities manager needs, it's just which 80% do you want? Oftentimes we get asked, "Hey, which CMMS would you recommend?" and my answer flatly is the one you'll use.

Mike P (13:56):

The one you'll use, yeah.

Scott Mason (13:57):

In the world we're in today, operational costs are ... Capital money is dried up from the COVID pandemic and people are now looking at how can we cut operational costs. The quickest way to do that is to cut head count. Our data, we've got about $6 billion in assets in our system right now, and so we can compare them system against system or asset against asset. One of the things we see is for every dollar that you cut out of your preventative maintenance budget, within the next 10 years it will cost you $40.

Mike P (14:35):

Hmm, wow.

Scott Mason (14:37):

You figure, hey, I'm going to save a million dollars a year, so over 10 years that's $10 million, but in the long run, you've spent $40 million to save 10.

Mike P (14:48):

I see.

Scott Mason (14:48):

So it's a very interesting perspective, especially we look at it and say now's the time to be investing in preventative maintenance.

Mike P (14:57):

Interesting. From your perspective, what technology tools, what software, is it just a CMMS or is it EAM that really will help asset managers get through these challenging times?

Scott Mason (15:08):

I think that there's a baseline. Your CMMS should be your single source of truth. Everything you do as a facility manager should have some type of mechanism that tracks it. If a nurses' station calls and they've got an ice machine that's clogged, that that should be tracked as a break/fix work order. But similarly, when the CEO calls and says, "Hey, I need you guys to put up Christmas trees and Christmas lights," those things should be tracked as well. So you kind of run the spectrum there.

            CMMSs, and that's why I said the one you'll use, are important. We're in a technology transition right now where you've got, they're calling it the silver tidal wave.

Mike P (15:56):

Yeah, silver tsunami.

Scott Mason (15:58):

The silver tsunami, there you go, that is facing facility management, where you're going to lose a lot of not just skill, but you're going to lose a lot of tribal knowledge. You've got some 20, 30, 40-year-old veterans that are getting ready to retire and they're going to take that knowledge with them. If you haven't been maintaining your CMMS with tracking the history, the new guy is going to have to figure all that out on his own, so there's a learning curve. Some of the issues that you face today, obviously, we are CMMS agnostic. As long as we can either get a flat file or an API from the CMMS, we can do our thing. We actually work and enhance the information with had the CMMS.

            Kind of how we work, Mike, is once we do a facility condition assessment, that's like looking at a P&L statement, that's a snapshot in time. If you're not maintaining that data in some form, then you have to continually do that. It's like going to the doctor, right? You're not hooked up to a constant lab and constant blood pressure and all those things, so you have to go every year for a physical. Well, you can't afford to do a FCA every year so maybe you do them every five years or every 10 years. What we do is we do a one-and-done FCA because we're able to talk to the CMMS and it's looking at preventative maintenance work orders, break/fix work orders. Through the algorithms that are built in, we're able to actually adjust the score of each asset. You can actually see the asset, real time, how it's performing, and over time. It's a great tool.

Mike P (17:42):

Wow, great stuff. All right. Well, again, we can only do so much in 20 minutes, Scott, but I think-

Scott Mason (17:46):

Absolutely. Did you learn anything?

Mike P (17:48):

I did, I did. Scott, this has been great. Thanks for being on the show today.

Scott Mason (17:52):

Mike, I very much appreciate it and look forward to your continued success.

Mike P (17:57):

There you go, folks, Scott Mason of Facility Health, Inc., sharing some great insights around making the business case for preventative maintenance in the healthcare industry and beyond, using tech tools and asset management strategies. Indeed, I did learn a lot from this discussion and I do thank you for it, Scott. I hope you enjoy listening also. If you'd like to connect with Scott and hear more about the work he is doing, please check the show notes for this episode where you will find a link to connect with him. Be sure to tell Scott that you heard him here on the show.

            If you're getting any value at all from this show, won't you please take just a few minutes, head over to Apple Podcasts and give us a rating and a review. I really cannot express how much that would mean to me as I continue to do my best each and every week to deliver new interviews designed to encourage and inspire you to be an asset champion. Peace out.

            You've been listening to the Asset Champion Podcast. We hope you found this discussion beneficial as we work together to elevate asset management success by improving efficiency, reducing costs, and building best practices. For more information about how the iOFFICE Asset Division can boost the performance of your physical assets by providing comprehensive enterprise asset management software solutions, please visit assetchampion.com.