Leaders Building for a Flexible Future Battle Aging Healthcare Infrastructure

Healthcare facility managers have two distinct but coexisting priorities. The first is the ongoing need to maintain a vast and aging infrastructure, with industry reports estimating a backlog of hundreds of billions of dollars in upgrades. The second is the concurrent need to develop flexible, future-ready outpatient facilities to meet a surge in demand for community-based care. That balancing act requires a new kind of leadership, one that can manage legacy infrastructure while building for tomorrow.

That dual challenge is the daily reality for leaders like Dr. Michael C. Walker, the Director of Real Estate Operations for the North Zone at Texas Health Resources. During his extensive career, he's advanced through various leadership positions at the major healthcare system. A U.S. Navy and Army Reserve veteran, Dr. Walker brings a strategic background to his role, where the focus is on implementing high-level business strategies on the ground. For him, navigating this new environment starts with an honest assessment of the situation.

• An old inheritance: The problem of aging infrastructure has become a fundamental starting point for many facilities managers across the country, Dr. Walker explains. The scale of the problem is so immense that it has forced a strategic reckoning. "It's not possible today, anywhere in the US, for a facilities manager to manage a portfolio that doesn't have some deep level of aging infrastructure," he says.

• A quarter-trillion tab: A unique operational constraint in healthcare compounds the financial challenge. A hospital's core systems, such as its mechanical, electrical, and emergency power infrastructure, must operate continuously. Upgrades must be meticulously planned around active patient care, making it challenging to take core systems offline. According to Dr. Walker, "There's an estimated $270,000,000,000 needed in infrastructure for existing aging healthcare facilities across the U.S."

With facility managers competing for a "finite amount of capital" against other organizational priorities, leaders should add compelling advocacy to their technical expertise, Dr. Walker says. The task then involves translating dense technical reports into a clear business case for the C-suite, linking infrastructure needs to patient outcomes, workforce safety, and organizational growth. "The preliminary step is for facilities managers to get a good, documented property condition assessment of their facilities. That’s what will tell you the true condition of the major infrastructure systems. It will do the facility manager little good if he or she cannot tell the story of the true condition of the property infrastructure."

After a thorough review, leaders may determine that some older buildings are no longer suitable for the organization's future needs, Dr. Walker explains. For example, when a health system’s plan calls for bundling several hospital-level outpatient clinics with an ambulatory surgery center in a single, community-based location, the response, he explains, must be a new asset class called the "medical outpatient building."

The model taps into a growing market, with industry analysts noting that Ambulatory Surgery Centers (ASCs) are seeing growth driven by an aging population, technological advancements, and a push for more cost-efficient care. But the approach also requires a higher upfront investment to engineer for future-readiness, Dr. Walker says. It's a strategy born from the costly experience of being constrained by outdated designs, and one that extends the asset's useful life by avoiding costly future retrofits.

• Code for the clinic: "A traditional medical office building is designed to meet only the minimum code requirements for life safety, emergency power, and mechanical systems. Now, these facilities need more robust mechanical and emergency power systems in the core and shell. They also require multiple elevator banks, including dedicated ones for patient transport," he explains.

• Speaking Google: According to Dr. Walker, both of these facility challenges are symptoms of a single, fundamental shift in the healthcare market. He frames this evolution with a simple but effective metaphor, explaining the change as a response to the rise of the empowered healthcare consumer. "Somewhere along the line came this great invention, and we moved from speaking Gutenberg to speaking Google. Once we began to speak Google, that changed how patients interacted with healthcare facilities, and it changed even further as patients began to understand their power as healthcare consumers."

In today's reality, the role of facilities management has expanded, Dr. Walker concludes. The immense effort to both modernize the old and future-proof the new is largely in service of a single, primary goal: meeting patients where they are. By taking on a more strategic function, he says it's enabling the future of care itself. "The modern healthcare consumer doesn't want to drive 40 miles to see a doctor, go out of their way for a routine visit, or make five stops to take the kids to the pediatrician. Health systems need to understand those things and move what the consumer is demanding closer to their reach. Accessibility and growth are the upside."