Earlier this month, Adam Douglas and Steve Catts of McGough Construction, alongside Becky Hansel, AIA, ACHA, of INVISION Architecture, presented at the Iowa Healthcare Financial Management Association (HFMA) Winter Meeting. Their session, Strategically & Effectively Managing Public Dollars on Capital Improvement Projects, explored practical strategies and proven methodologies for aligning facility planning with organizational goals while maximizing financial stewardship.
Drawing on decades of expertise, the team shared insights into strategic planning, facility assessments, master planning, and funding sources. These principles form the foundation for successfully navigating complex capital improvement projects while making the most of public dollars.
Key Takeaways for Capital Improvement Success
Managing public resources effectively can mean the difference between a project that fulfills its promise and one that falls short. Here are five essential steps to guide your efforts:
1. Start with Strategic Business Planning
Capital projects should begin with a clear and actionable strategic business plan. This plan should align organizational goals with facility needs while considering external factors such as market dynamics, demographic changes, and potential partnerships. The primary key to establishing a financeable capital plan is to start with a strategic business plan which allows for the informed development of campus and facility master plans which then inform the development of near and long-term capital plans. A well-developed strategic plan ensures every decision is rooted in context and contributes to long-term success.
2. Conduct Comprehensive Facility Assessments
A thorough understanding of your facility’s current state is essential. Facility assessments evaluate everything from the physical condition of buildings to compliance and long-term capital expense demands. Statistics show the urgency of this step: 60% of hospitals were built before 1975, and healthcare facilities face a staggering $390 billion in deferred maintenance. Addressing these challenges head-on allows organizations to prioritize improvements and allocate budgets efficiently.
3. Develop a Master Plan Aligned with Your Vision
A master plan establishes a framework for addressing both immediate and long-term needs while staying flexible to accommodate future changes. Effective master planning ensures physical spaces align with organizational objectives, maximizes reimbursements, and embraces evolving care models. Breaking down large-scale projects into manageable phases ensures that facilities remain operational and effective at every stage.
4. Explore Diverse Funding Sources
Securing funding is often a critical hurdle. Fortunately, organizations have access to a wide range of external and internal funding options. From government grants and philanthropic donations to innovative mechanisms like green revolving funds, there’s no shortage of opportunities. Recent legislation, such as the Inflation Reduction Act, introduces new tax credits for non-profit organizations, providing additional support for sustainability-focused upgrades. Funding sources will want to know that your requests for funding are rooted in thorough consideration of strategic business plans and well- developed long-term plans for campuses and buildings.
5. Plan for Lifecycles
Capital improvement projects don’t conclude with construction. Lifecycle planning integrates strategic visioning, design, construction, and post-occupancy evaluations to ensure facilities meet operational goals and adapt to future needs. This holistic approach supports both immediate priorities and long-term growth.
Partnering for Success
At McGough, we understand the complexities of public capital improvement projects. With nearly 70 years of experience and a team dedicated to healthcare and public infrastructure, we partner with clients to deliver projects that balance innovation, efficiency, and fiscal responsibility. Our approach is grounded in expertise, collaboration, and a commitment to creating spaces that serve communities for generations.
Ready to Maximize Your Capital Dollars?
If you’re planning a capital improvement project or seeking guidance on aligning facility planning with your organization’s goals, let’s connect. Contact Steve Catts, our National Healthcare Practice Leader today to discuss how our experience and expertise can support your success. We can help ensure your investment delivers value and impact for years to come.