Flexibility in healthcare real estate doesn’t have to break the bank

Five strategies health systems are using to achieve more flexibility, while also lowering costs

Healthcare leaders are seeking to create facilities that are both flexible and sophisticated enough to sustain quality care delivery into the future. Today’s needs are certainly different from what we’ll need tomorrow, so nimbleness is key. At the same time, those same leaders must keep their organizations competitive in the short-term by controlling costs.

If it sounds like a tall order, it’s because it can be. After all, who can afford to build a world-class clinical healthcare facility if it’s going to be outdated by the time the paint dries? Healthcare services will change, and subsequently space needs will transform, and some will even disappear, particularly 10, 20 or 50 years from now.

Yet there are ways to build for the future while controlling costs in the present. By rethinking healthcare facilities capital strategies, leaders are finding new ways to reduce operational costs and also become more adaptable for future change. An important first step is to consider the value that can come from providing the right place for the right care.

The following five facilities planning strategies can help healthcare leaders preserve capital while building facilities that meet the anticipated—and even some unknowable—needs of future patients.

1. Using lower cost facilities to provide more convenient care.

The convergence of medicine, technology and demographic change spells the end of the notion that a single hospital should house all care. In its place, health systems are building more diverse facilities, from microhospitals and freestanding emergency departments to urgent care clinics and more—potentially even in your own office or home. This is unlocking a means of providing services in the lowest cost facility while personalizing care delivery.

For example, a child may not need to go to an ER for a simple sore throat, but in the old model, working parents have little choice if they can’t get to the family doctor during the workday. Inconvenient location and schedule options is one reason that, according to one survey of healthcare trends in 11 countries, U.S. patients were more likely to seek care in a hospital ER or other after-hour care clinic than people in other industrialized nations.

Recently, however, health systems have been taking the cue, and retail clinic locations have increased 38 percent in the last five years. In addition to meeting patients where they are, this broader mix of location offerings enables organizations to potentially allocate more capital toward building a sophisticated “hospital of the future,” and less on places like ambulatory care locations that don’t require the same level of investment to provide high-quality care.

2. To lease or build new, that is a question, and one with serious impact on capital allocation today and tomorrow.

Of course, expanding the portfolio of care locations means investing in new facilities. Some organizations are addressing that challenge by opting for short-term solutions like leasing space in a more basic developer building. This allows them to take on a temporary lease, see how the market fares and then, if change is needed, simply hand back the keys at the end of the initial lease.

While there can be advantages to this option, like being able to test out submarkets, it’s important to know that developer-built space may not include the complete mechanical, electrical or lighting features you need. Similarly, some existing locations may not have been built specifically for healthcare purposes, and will most likely not have the infrastructure required to support clinical needs.

Building a new facility has pros and cons, but a big pro is that it does enable you to exercise full control over important safety and compliance features, as well as ensuring the brand experience is memorable and consistent across all your locations.

3. Building the facility of the future? Build in for long-term flexibility/adaptability.

When new construction emerges as the way to go, then it’s time to ensure the design is adaptive to support the inevitability of future change. The right place for the right care this year, after all, might not look the same in a couple of decades, with unforeseeable changes in policy, demographics, and technology.

One way to improve return on investment is to design space so that it’s functional today, but also stands little chance of becoming obsolete in 20 years. To do that, consider how the facility could be used in different ways, should that become necessary or desirable sometime down the line.

For example, if there is a potential that an outpatient facility may need to accommodate inpatient care in the future, then build with that possibility in mind. Plan, design and build with the physical elements necessary for in-patient facilities, including but not limited to higher floor-to-floor heights, wider column grids, as well as required fire separation, electrical and mechanical systems.

Where possible, consider investing in foundations, structures and systems (HVAC, electrical, etc.) that can enable vertical expansion, if space is limiting your ability to grow horizontally.

4. Pay attention to the details – for future operational savings.

In addition to building for adaptability, healthcare leaders can optimize construction and renovation spend in a number of ways. For one thing, always compare costs and challenge assumptions about building systems and materials specifications. Make sure designs and specifications don’t call for upgrades and additions that may not be appropriate for every use—or may make maintenance time-consuming and expensive. Know the intricacies of the requirements for each type of location, and carefully consider which options are necessary now, which can potentially be added in later if needed, and what may be “overkill.”

Investigate ways to ensure building commissioning works to your advantage, by closing the gap between code requirements and building performance, upfront, and on a regular basis. Consider, too, the significant operational savings that can come from investing in automated building systems and renewable energy sources like solar power.

Centralized facility management doesn’t just save operating costs, it can also support risk management—important considering more locations on the map mean more facility risks, like deferred maintenance. A burst water pipe, for example, can quickly escalate beyond a facility concern and lead to a larger issue for patients and the entire organization.

5. Plan ahead for future location needs.

Every organization will forge its own way forward through change. By working to ensure that the right care happens in the right place and at the right cost, leaders can personalize care and safeguard against over-spending. This can be done by creating a comprehensive center by consolidating locations instead of adding new ones, reducing overall costs.

Location strategy is key at all times. Tap into advanced portfolio analytics to see how costs differ in various markets, and pinpoint location-specific opportunities with predictive insights. For example, sophisticated virtual market tours can visually integrate any relevant data point, from high-level macroeconomic trends to planned development layers—whatever your team has deemed important in location strategy.

Building in flexibility – from capital planning to facility design and ownership preferences

Capital planning tools can also help to achieve both cost control and flexibility, by offering teams the ability to create a strong framework for making complex capital investment decisions without bias. By establishing a set of criteria on which to judge each possible capital investment (such as, does it improve patient care? Is it critical for life safety?), organizations can ensure they’re not under-spending on the right projects, or over-spending on the wrong ones.

Whatever way forward is right for your organization, one thing is set in stone: change is a constant. Flexibility and adaptive design is going to be key in maximizing healthcare capital, today and into the future.

By Roger Herritz, Senior Vice President, Healthcare Project Management, JLL

###

The views, opinions and positions expressed within these guest posts are those of the author alone and do not represent those of Becker's Hospital Review/Becker's Healthcare. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.

Copyright © 2024 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.

 

Featured Whitepapers

Featured Webinars