Business Plans that Deliver Better Care at Lower Cost
hfm Web Extra
Our Lady of Lourdes, Lafayette, La., recently completed a 192-bed replacement hospital using up-front business planning to justify the capital allocation. Using an integrated strategic, operational, financial, and facilities process, the hospital:
- Realized true savings in excess of $5.6 million, or 3.8 percent of construction
- Increased by more than 10 percent the average daily census and increased targeted interventional procedures
- Increased ED throughout and reduced waiting times as a result of process changes and implementation of Universal Care Unit shared with the interventional platform
- Reduced peri-operative nursing staff due to the deployment of an interventional platform
- Used the "Universal Care Unit" concept to provide swing rooms that can be accessed by Emergency/Endo and other interventional procedures
- Delivered project 6.8 percent under budget through integrated approach, which also resulted in up to 4,000 square feet of clinical space not being needed and more than $1.5 million in cost savings
The so-called "70/30 rule" defines the planning process where approximately 70 percent of the future-state processes cover implementation planning and adoption within the existing facility, while the remaining 30 percent depended on the physical design of the new facility.
- The 70/30 rule and the Pareto Principle, or the 80/20 rule, can be used in an operations and performance-driven facility planning and design process.
- The 70/30 Rule suggests that 70 percent of improvement opportunities between the gap in current state to future state can be implemented within existing facilities, while 30 percent are dependent on new facility configurations.
- The Pareto Principle prioritizes which improvement opportunities may have the biggest impact on affecting the future state.
Guiding Principles and Execution
When developing a strong framework and approach that balances the needs of stakeholders and also focuses on the desired future state, an organization should consider a plan with guiding principles and includes an execution plan.
Typical Guiding Principles:
- Meet national benchmarks for cost per encounter in the ED to hit Medicare rates
- Achieve best practice benchmark ED door to physician times and reduce "left without being seen" numbers.
- Measure baseline performance metrics related to guiding principles
- Adopt Integrated Project Delivery (IPD) approach for planning/design/construction
- Build best-in-class team for business, operational, financial, and facility planning, and design and construction disciplines
- Form senior level, cross-functional, multi-disciplinary singular planning team
- Optimize use of LEAN techniques
- Define current state and future state business and financial models
- Define current state and future state operational, care delivery, and process flow models
- Build business plan around future state models and optimal facility solution
- Implement non-facility related process/operational/performance improvement initiatives
- Plan, design, and construct the new facility solution
- Train staff into the new facilities processes, flows, and designed environment
- Commission, test, stress, and activate new facility
- Measure ongoing performance metrics related to guiding principles
Fred Campobasso is managing director, construction real estate, Navigant, Chicago, (firstname.lastname@example.org).
Joe Kucharz is director, healthcare real estate, Navigant, Chicago, (email@example.com).
For more information, see Fred Campobasso's and Joe Kucharz's "Developing Healthcare Facilities for a Changing Environment," hfm, May 2012
Publication Date: Tuesday, May 01, 2012