Next-Gen Master Planning For Healthcare

The past few years have brought profound, ongoing change to our nation’s hospitals. The COVID-19 pandemic upended the way care is delivered, introducing new design strategies and regulatory codes, while other code changes, such as seismic regulations, have disqualified existing spaces for certain uses.

Organizations are also navigating cash flow challenges, while responding to rising demand—outpatient and inpatient volumes are expected to increase by 16 percent and 2 percent respectively over the next decade, according to a report by SG2, a healthcare consultancy firm.

This rapidly changing market is a challenging context for master planning, which requires organizations to project their anticipated capital needs over a multiyear timeline. The result is a conundrum: American healthcare systems continue to create long-term master plans, but they frequently discard them after a few years as changing market conditions render them obsolete.

Fortunately, there are more adaptable approaches to master planning that allow providers to plan intelligently for the present and future in the midst of changing market conditions. That’s important as providers are poised to spend $45 billion this year alone building and adapting their facilities, according to a report by Statista.

Long-term facilities planning

As with any well-run business, healthcare systems should start with a long-term facilities plan to help them define their most appropriate course of action. Unlike the master plans of old (a “one-and-done” document that offered a single path forward), today’s master plans are dynamic and fluid, able to accommodate new metrics, rapid market changes, and unexpected regulatory events.

Not limited to building location and capacity, these new plans factor in nearby resources, such as the proximity of food-service options or hotels, which can enable hospitals to focus capital spending on clinical and research space rather than on creating more accessible amenities.

They also feature off-ramps if changes in capita or priorities arise as well as pivot points at time and volume milestones. Scalable in scope and execution, these plans can cover a single department, full site, or entire enterprise. They also can offer immediate solutions and 30-year visions.

Increasingly, master plans also consider how to attract and retain skilled healthcare professionals by creating spaces that enhance staff well-being, such as mediation or nourishment areas. The adage “build it and they will come” no longer rings true in American hospitals. In 2022, there was a national 15.7 percent vacancy rate and 22.5 percent turnover rate for registered nurses (RNs) according to a report by NSI Nursing Solutions.

Healthcare facilities spent an average of $52,350 to replace each bedside nurses that left, partially attributable to the higher wages commanded by temporary workers such as travelling nurses. The shortage extends to nearly all medical specialties. It bears remembering that the ROI on even the most lucrative and cutting-edge spaces nosedives if you can’t find the people to staff it.

Renovate, pivot, or build?

The first step to assessing a healthcare organization’s needs is to collect data on its existing site and operations, including facilities conditions, throughput, and volume data. The information revealed by analyzing these conditions, constraints, and opportunities will determine if renewing existing space will suffice or a new building is needed.

Solutions also can land between these two poles or be incremental if money or time becomes a stumbling block. Here are five considerations for organizations as they map out the best path forward.

1. Look for opportunities to increase efficiency of existing space

It’s common for site and operational analyses to uncover ways an organization can make better use of its resources. In some cases, such as with Confluence Health’s Wenatchee Valley Hospital in Wenatchee, Wash., increasing efficiency alone achieved the needed capacity.

In 2019, the organization’s surgeons reported that they didn’t have enough operating rooms (ORs) to meet demand. A study of the facility’s volume and throughput found that there was sufficient space but that low PACU staffing levels were causing a bottleneck.

Instead of suggesting the facility build more ORs, it was recommended that the organization hire additional staff. This approach would allow the hospital to increase the number of surgeries it could perform as well as enable it to operate five days a week instead of four.

The hospital partnered with a local community college to build its pipeline of medical providers. The project team also provided the organization with a plan to determine when and how to add more operating rooms if future volume required.

2. Anticipate change

Rather than an all-or-nothing proposition, dynamic long-term plans bake in off-ramps and pivot points: chances to alter the trajectory if finances are suddenly constrained, leadership changes, or deadlines move.

For example, Oregon Health & Science University (OHSU) had already decided to build a new bed tower, specialized labor and delivery department, and neonatal infant care unit (NICU) when COVID-19 put the project on hold. The Portland, Ore.-based healthcare provider used the pause to rethink its service lines, shifting to cancer care to generate additional revenue quickly.

OHSU also added shell space until future needs, such as a kitchen or café, could be defined that would benefit the entire campus. The organization has since resumed work on the initial project, with a projected completion date in 2026.

3. Weigh need and urgency

Annual budgeting—even when combined with current data—cannot provide healthcare systems with the flexibility and foresight to adjust to quickly shifting market conditions. But long-term planning can.

By examining near- and far-term variables such as the organization’s finances, patient trends, and market competition, the approach helps organizations more accurately determine if and when expansion makes sense.

Case in point is CommonSpirit Health (Sacramento, Calif.). The organization’s Folsom, Calif.-area facility experienced a surge in patient volume, raising the question if it should build additional facilities. Due to CommonSpirit’s infrastructure in the area—including numerous clinics and a hospital within four miles of the proposed site—any growth needed to support existing business rather than detract from it.

To rightsize offerings, the project team established the organization’s projected baseline patient volumes, starting with the area’s anticipated population growth. Then, factors were added to the model such as insurance coverage, demographic changes, disease prevalence, technologies, readmissions, and care management. Strategic-growth opportunities identified by the organization were also applied and then the resulting projections were divided into five-year increments.

The findings revealed that in 10 years, CommonSpirit would need more capacity in the area. That pressing timeline, coupled with a realization that construction costs could double within five years, triggered the decision to build now rather than wait.

4. Tally the negatives

Sometimes, it’s clear that building is necessary such as when an organization has squeezed all the efficiency from existing spaces and has nowhere to put a new department; a regulatory event, such as a change in energy codes, renders a space ineligible for its intended clinical function; or if current facilities can’t support increasingly common technologies and treatment methodologies.

Not every one of these scenarios requires a hospital to break new ground. But the more offerings fall short of these quantitative and qualitive benchmarks, the stronger the case for construction.

Loma Linda University Medical Center (LLUMC) and Children’s Hospital (LLUCH) in Loma Linda, Calif., needed to build new bed towers when its existing space could not be renovated to meet the updated seismic requirements for acute patient care.

To maximize ROI, the project team focused on high revenue-generating service lines that could not be housed compliantly in less costly outpatient environments. These included imaging, inpatient surgeries, cardiac catheterization labs, and adult and pediatric emergency departments.

Spaces such as open-core nurses’ units and all private patient rooms were also created to support updated care models. Coupled with the seismic upgrades, the new facility has a life expectancy of up to 75 years.

5. When not to build

There are times when facilities should avoid construction, even despite demand. These include if the site can’t safely support a structure’s function or footprint, for example, or if building would compromise existing operations.

In these cases, it would be better to partner with an organization to fulfill the needs, especially if they are immediate. A second option, on an enterprise level, would be to develop another location.

Designing for future success

Financial uncertainty is a given for healthcare systems, perhaps now more than ever. However, these organizations know that the requirement and demand for future care is increasing.

Future preparedness at any scale—whether it’s a flexible long-term plan, a more efficient use of current space, or even a new building—is critical to healthcare providers’ economic and operational success.

 

Christina Grimes is principal and firmwide healthcare practice leader at NBBJ (New York ) and can be reached at CGrimes@nbbj.com. Ryan Hullinger is partner and firmwide healthcare practice leader at NBBJ (Columbus, Ohio) and can be reached at rhullinger@nbbj.com. Andrea Rufe is principal and healthcare consulting leader at NBBJ (Los Angeles) and can be reached at arufe@nbbj.com. Eric Schilt is vice president of planning, design, and construction at Loma Linda University Health (Loma Linda, Calif.) and can be reached at eschilt@llu.edu.

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