Engineered Systems NEWSCase in Point

Performance Contract Helps Hospital Help Others

Sharply increasing maintenance costs are part of reality for any aging hospital building. New regulations, mandates, and environmental guidelines, along with unplanned maintenance costs can put a severe strain on an already tight hospital budget. These increased costs make it difficult to provide a comfortable, attractive, and safe healing environment. Updating an aging infrastructure is critical to the long-term success of many hospitals.

Old Building, Old Problems

Methodist Healthcare-McNairy Hospital is an 86-bed hospital occupying 59,000 sq ft in rural Tennessee. The original hospital building was built in the 1960s. Several additions have been built since then to accommodate growth and expansion.

Due to tightened budgets, the facility department was unable to properly address recurring comfort complaints from several areas of the hospital. Trane met with the hospital staff and learned of their specific issues.

"Our 30-year-old physical plant was in need of major updating and replacement. The location of the hospital made it difficult for service companies to address our problems on a piecemeal basis. These issues, coupled with the magnitude of capital required for the project, made it necessary for us to explore alternative ways to get the job done," said hospital administrator Rosemont Tyler.

To fix these problems, Methodist Healthcare-McNairy Hospital chose the Performance Agreement for Comfort (PACT) from The Trane Company (La Crosse, WI). PACT was presented as a means to address the hospital's facility issues using the existing operating budget with guaranteed results. "We knew some of our mechanical equipment needed to be replaced," said Lawrence Monroe, maintenance supervisor. "But funding was low. We chose to work with Trane because we had all Trane equipment and a trustworthy relationship." The hospital board agreed, and Trane began the PACT process.

Meeting All of the Hospital's Needs

During the preliminary study, necessary improvements were identified to increase comfort, reduce operating costs, and manage risk. The existing generator was old and improperly sized for the hospital's existing load, the operating room comfort needed attention, and much of the mechanical equipment was reaching the end of its useful life. Trane developed a PACT program to meet the hospital's objectives. "The PACT process was a different way of working with Trane. I really felt informed and part of the team," Monroe said.

The final PACT proposal was presented to the hospital with unanimous approval. The company provided facility solutions and additional revenue to the hospital. "Trane's approach to the project was very comprehensive. The single point of accountability made it easier to make decisions and saved a lot of our time," said Tyler.

A new emergency generator was installed to provide the hospital with protection from electrical outages. A new variable-air volume (vav) system was installed to serve the operating rooms and X-ray areas. This retrofit improves system efficiency, meets code requirements, and provides reliable comfort delivery to these critical areas. A lighting retrofit was completed to improve light levels and reduce utility costs.

Further utility savings have been realized through converting electrical vav reheat to steam. A Tracer Summit(r) building management system was installed throughout the hospital to reduce operating costs and to provide monitoring and control of the critical areas in the hospital. New chillers were installed to provide more efficient and reliable cooling to patients and staff, and fancoils were added for better comfort delivery to patient rooms.

Finally, an ongoing performance management and training program is in place to ensure projected savings and system performance occur for the term of the contract and beyond.

As in most hospitals, healthcare must continue despite construction. McNairy Hospital had similar concerns. Through careful planning and close communication with the hospital staff, Trane successfully completed the installation with no disruption to hospital operation. "Except for a few normal asbestos management delays, the project ran very smoothly," said Monroe.

The Savings Fund the Improvements

The hospital now benefits from over $826,000 in facility improvements using the program. Best of all, the project's annual savings of $113,000 and additional first year savings of $20,000 is funding the improvements and creating an additional stream of revenue. The patients and staff at McNairy Hospital are now in a more comfortable and efficient healing environment.

McNairy continues to see change within the healthcare industry. Fortunately, any change in comfort can be predicted and controlled thanks to the PACT program. ES

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