FM opportunities in the Australian healthcare sector on the increase
The mature facilities management market for healthcare in Australia is expected to grow at a compound annual growth rate of 3.1 percent between 2012 and 2019 according to new analysis from Frost & Sullivan.
New analysis from Frost & Sullivan, Strategic Analysis of Facilities Management Market in Healthcare, Australia, finds that the mature FM market for healthcare in Australia is expected to grow at a compound annual growth rate of 3.1 percent between 2012 and 2019.
In 2012, the public healthcare sector in Australia was more than twice the size of the private healthcare sector in terms of hospital beds and total hospital expenditure. While private healthcare and other small to medium medical facilities do provide facilities management (FM) opportunities, it is mostly to small and medium FM companies. The larger and well-established FM providers will mostly come into play with the successful implementation of public private partnerships (PPPs) model in the healthcare sector.
In 2012, 22 percent of the healthcare FM services were outsourced and 78 percent delivered in-house. Furthermore, 30 percent of the outsourced FM services was delivered as an integrated FM (IFM) solution, while 70 percent was delivered as ‘other services’, Frost & Sullivan notes.
According to the company, the consolidation of the healthcare sector has affected the business of smaller and medium healthcare facilities of general practitioners in Australia’s major cities, and to keep them afloat, there have been several state-based initiatives to expand the role of general practices and reduce the pressure on hospitals or nurse-led clinics. It states that these new models provide additional opportunities to FM service providers.
“Furthermore, the expanding elderly population has placed a strain on Australia’s healthcare workers and heightened focus on disease prevention,” Nelly Appelhanz, Frost & Sullivan energy and environmental consultant, states. “This intensified need for healthcare services has translated to greater FM requirements.”
FM service providers will also feel buoyant about their prospects due to the steady investments in healthcare, with several new hospitals being built across Australia and the expected repairs and refurbishments of outdated healthcare facilities boding well for the FM market, Frost & Sullivan states. However, according to the company, this spate of developments has constrained healthcare budgets.
To lower the pressure on hospitals and reduce duration of hospital stays, the public healthcare sector is connecting primary health, community and residential care services. While this augurs well for service providers that cater to community, aged care and residential care facilities, FM companies will experience lower demand for facilities such as linen or food services, Frost & Sullivan adds.
The company believes that, in a changing marketplace, the FM market’s success depends on its adaptability to advanced technology, shorter life cycles of medical equipment and smaller equipment size; and that the need for improved workflow effectiveness and energy efficiency has a telling effect on the new types of FM service types.
“Overall, FM service providers that understand the demands of existing hospitals and the ways to accommodate technology changes in these buildings will benefit from future FM outsourcing decisions in the healthcare sector,” Appelhanz adds.