With healthcare costs dominating public discourse, the role of healthcare facilities in escalating the cost of care is being scrutinized. Healthcare facilities typically rank as the second highest expense, behind labor, for healthcare organizations. Hospital space, including construction, ongoing maintenance and the level of operational efficiencies, poses substantial opportunities for cost savings.
While the era of "build it and they will come" and super-sized facilities that are visually appealing but expensive to build and operate is beginning to be a distant memory, many hospitals are struggling with the legacy attitude that construction is the silver bullet for space issues. Organizations launch costly expansion projects as the go-to solutions for poorly configured and sized space that hinders care coordination and staff workflows. While new construction may be the appropriate approach, here are five issues to consider before raising capital and/or taking on debt for construction.
1. Self-reflection sets the stage
Self-reflection can set the stage for what needs to be done in your hospital by identifying true space issues before moving forward with facility expansion. Many organizations will find during this stage that space is not being utilized for its intended purposes and could be modified to better meet the needs of its users. Spaces can often be organized and tidied, storage can be reduced, and wasted space can be repurposed for better use.
In addition, delivery systems are changing. The healthcare environment is shifting its focus from inpatient to outpatient care — managing population health effectively in a less costly setting. This paradigm, coupled with the post-merger service line reconfiguration that many organizations are experiencing, will force self-reflection to determine how organizations will strategically position themselves in a value-based environment. Once the strategic positioning has been determined, a discussion on appropriate care settings can proceed.
2. Beware of space hogs
Space hogs are services that use approximately 75 percent of clinical space and are expensive to outfit. Inpatient beds, maternity suites, surgical and endoscopy suites, radiology (including interventional procedures) and emergency departments are good examples. All too frequently, organizations approve expansion or new construction for space hogs with little evaluation of whether valid need for additional space exists, and ultimately waste capital that could be directed toward other pressing needs.
Instead, proactive planning for growth and careful evaluation of requests should occur to ensure minimal waste on space hogs. A market and demand analysis can provide meaningful and objective documentation as a first step for evaluating space needs. By establishing market conditions and future assumptions regarding workload, population growth, utilization rates and market share, future volume and space capacity can be projected to drive smart facility decisions and ensure proper space allocation for those clinical services that are the most expensive to outfit.
3. Patients come first
Healthcare reform requires organizations to demonstrate value to their external stakeholders. In facility planning, this mandate means creating an environment that considers the needs of both patients and families throughout all aspects of the hospital, as well as one that makes patient satisfaction and safety a top priority.
For example, circulation and wayfinding within the hospital is an important driver of patient satisfaction. Elevator nodes should be clearly identified, and hallways for patients and families should be clearly marked and separated from hallways dedicated to staff functions. Entrances should be clearly marked indicating what services lie beyond their thresholds, and complimentary services should be co-located to take advantage of department synergies.
While fancy designs for new space can be captivating, healthcare organizations must remember their core purpose of serving patients. Interesting, innovative architecture may be appealing to the eye, but facilities that do not focus first on the patient and their families will ultimately not live up to their potential.
4. Employees matter, too
When planning healthcare facilities, organizations often focus on program and clinical growth, forgetting that in order to support this growth, the workforce must grow as well. Looking at future capacity requires a new lens — how will you make room for not only your patients, but your staff as well?
Due to technology and changing patient care needs, the healthcare workforce is becoming increasingly untethered, creating the opportunity for organizations to rethink traditional models and develop workspaces that promote team-based care and incorporate Lean methodologies. A staffing model for each department, based on growth drivers and other efforts to maximize staffing efficiencies, is an important first step in determining future workspace needs.
In the absence of a proactive plan for workspace needs, departments start behaving in a gaseous manner, filling the space around them, even if it wasn't originally assigned to them, and employing "squatter's rights" in vacated space nearby. Think of it as Bernoulli's principle applied to space. Successful institutions have combated this tendency with strict workspace allocation guidelines. These guidelines should identify, by position and type of work, the type of workspace needed. Organizations that have implemented these guidelines have decreased the number of private offices significantly by ensuring that proper community space is available within each department.
5. Construction is not always the silver bullet
With access to capital becoming increasingly tight, facility construction or expansion may not only be financially unfeasible, but potentially unnecessary. In fact, space may exist within your current facility that can be retrofitted or repurposed for significantly less capital resources. As the delivery of care changes, super-sized facilities provide consolidation and reconfiguration opportunities. In many cases, by collocating right-sized space, organizations can shutter unused space or repurpose it to accommodate changes needed to manage care effectively across the continuum.
George Karageorgiou is a manager with Health Strategies & Solutions, a national strategy firm headquartered in Philadelphia. He is Lean green belt certified and specializes in helping providers achieve facility and operations solutions that improve efficiency, reduce expenses and provide value to patients.
Deborah Lin is also a senior consultant with Health Strategies & Solutions. She is an expert in demand forecasting and specializes in translating complex data into strategic insights that allow for more effective resource allocation and facility design.