Personal Property: The Undermanaged Assets

According to the United States Census Bureau, the top two highest costs incurred by any organization with employees are Salaries and Wages (Human Resources), followed by property. Enormous effort takes place to contain and control these costs, at least when it comes to Human Resources and half of the Property component. 

 Activity Management

It is no surprise that Human Resources manages every employment phase an employee goes through, carefully planning and well-documented. From the job description, interview, new hire orientation, training, career development, performance evaluations, etc., through the exit interview. So controlled are these segments that sub-departments within Human Resources exist to handle each of them, like Recruitment, Benefits, Employee Relations, and others. 

Property consists of Real Property and Personal Property. Facilities, or Engineering, Departments manage the Real property with the same sense of control as Human Resources, having sub-departments for Electrical, Plumbing, Painting, HVAC, etc. 

Personal property, also known as Furniture, Fixtures, and Equipment (FF&E), the other half of the property component, has in most hospitals no overarching department to coordinate activities and is thus undermanaged, which results in lost cost savings opportunities and other lost benefits for hospitals. 

 Focusing on the Task at hand

At some hospitals, FF&E management is part of the Logistics or Materials Management Department. By default, neither the FF&E nor the supplies are receiving full attention. Logistics and Materials Management need to focus on getting supplies to the clinical departments. As a result, the FF&E is not a priority, and those functions can remain on hold. When Logistics or Materials Management does get time to attend to FF&E matters, attention gets taken away from managing clinical supplies. 

 Why Personal Property Matters

Also, according to the United States Census Bureau, organizations with employees actually spend more capital dollars on Personal Property than they do on Real Property, so it makes sense to manage FF&E with the same sets of controls.

University Hospital in San Antonio is the first hospital globally to achieve ISO 55001 Certification for the management of their Personal Property Assets. Proven benefits such as saving clinical staff time to focus on patients, re-utilization of assets versus buying new, better accountability and accuracy of financial statements are the result.

"It is no surprise that Human Resources manages every employment phase an employee goes through, carefully planning and well-documented."

A Dedicated department

Hospital Leaders must recognize this gap in cost containment and inefficient operations to create a department dedicated to managing personal property throughout the organization. Many elements are already in place. Just as the many sub-departments in Human Resources and Facilities exist, sub-departments exist in the management of personal property: Information Technology (I.T.) managing I.T. equipment, Biomedical Engineering managing Medical equipment, individual Departments managing their own Furniture and Fixtures, etc. Missing is the one umbrella department overseeing and coordinating activities to help ensure efficiency, accuracy, and accountability. 

By using existing staff and starting with a limited scope, this is a low-risk/high-reward endeavor. Over time, inventory records become more accurate, unnecessary purchases are reduced, and hospital furniture is more standardized and better maintained.

Processes and procedures work; we use them in managing our people and our facilities. There is no downside to using them to manage personal property.