MRG Newsletter March 2019

Managing Assets: How to Plan for a Facility Closure

Health systems consistently see hospitals coming in and out of network via acquisitions, consolidations, or closures. But since most of the focus is on planning for acquisitions, many fail to properly prepare for their closing facilities. Hospital closures are happening more frequently and for a variety of reasons. Financial challenges are a leading cause, such as with many EmpowerHMS facilities recently, where they are closing or reducing services in hospitals across several states. Health systems may also consolidate services from one hospital to another existing or newly built medical facility, where closures can range from a single department to an entire building.
     Regardless of reason or scope, health systems need to consider how to handle their assets in the event of either a sudden or planned closure. The main points to plan for are the inventory, transference, and liquidation of assets.
1.     Inventory of existing assets
  • Know what assets closing facilities have and what condition they are in. Items in better condition could be re-purposed whereas worn-out items may be thrown out or recycled immediately.
  • Inventory assets in surrounding locations to know where there is need for equipment without having to ask numerous department heads.
  • Compare inventories and asset conditions to determine which assets will be kept and which ones will be disposed of in a closure.
2.     Transference of assets to other facilities
  • Identify where usable assets will go based on need in other facilities or to the facility where services will be consolidated.
  • Determine how equipment will be transferred between facilities. Does your in-house materials team have the tools to move larger and multiple assets, or will you need to outsource the moving process?
  • Reconcile ledgers when equipment is removed or replaced so each facility’s books are up to date, ensuring that they are not paying for nonexistent assets.
3.     Liquidation of remaining assets
  • Include assets from the closing facility and any assets displaced by transferred equipment across sites
  • Get a fair market valuation for all disposable assets. Knowing what each item is worth will inform the best route for disposal – auction, resale, or donation.
  • Determine a consistent method of sale for the most profitable return on your capital equipment. Are you going to bid items out individually or contract a third party to handle resale?

Once these processes are addressed, health systems can establish a system-wide plan to ensure maximum efficiency with ongoing and future closures. Since these transitions will always happen in the healthcare sector, they can be made easier and more profitable by taking this proactive approach to changes in facilities. For more information on inventory, assessment, and liquidation services, please visit our website at

MRG Projects:
  • Technology change-out of Siemens Analyzers for 3 hospitals in MI
  • OBGYN audit for practice acquisition in OH
  • Cardio & Vascular audit for practice acquisition in OH
  • Remote audit for practice acquisition in WV
  • Urology audit for practice acquisition in OH
MRG Appraisal of the Month:
1 qty Olympus CYF-4 flexible cystoscope
FMV: $2000.00


MRG Fun Facts:
St. Jude Children’s Research Hospital, which has treated thousands of children with cancer, is not religiously affiliated! It was founded by actor Danny Thomas because of a promise he had made to the patron saint of lost causes after he found success in Hollywood.