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Planning Capex in a World with Competing Priorities
A multi-hospital system had completed strategic facility master plans across five of their regional campuses. Each campus’s needs were identified, and the associated projects resulted in proposed capital expenditure upward of $1 billion. Understanding that capacity, operations, facility age, market strategy, financials, and technology are all important considerations for determining where a project falls in the priority list, Catalyst was engaged to develop a framework for capital investment decision support and prioritization.
Catalyst and leadership develop a list of criteria to evaluate and weigh each individual project based on its own merits and how it fulfilled the system’s global mission. After each criterion and project had been weighted, it was clear which projects rose to the top of the priority list. Our process allowed for the seamless integration of new or modified project developments and instantaneously ranked and prioritized them against existing and anticipated projects, allowing leadership to update their capital plan on a consistent basis and make timely and informed decisions on project funding and execution.
This process removed the subjectivity from project prioritization and allowed leadership to home in on projects that are key to their strategic initiatives. Our process also contrasted the timing of project execution against the organization’s projected cash flow, which is key to developing a solid, implementable three- to five-year rolling capital plan.
Large Multi-Campus System