Ending the Era of Super-sized Health Care Facilities

This article originally appeared in a Health Strategies & Solutions, Inc., newsletter.

As the increasing costs of healthcare have dominated public discourse over the past several years, healthcare facilities are being scrutinized for their role in escalating the cost of care. With healthcare facilities typically ranking as the second highest expense, with the first being labor, hospital space — from construction to ongoing maintenance and the level of operational efficiencies present — poses substantial opportunities for cost savings. These opportunities, however, have been largely ignored for an almost 30-year period that spawned the era of super-sized hospitals.

In 2008, the Health Environment Research & Design Journal documented the super-sizing trend of incremental growth that occurred in both room size and departmental square feet in adult inpatient units and interventional services from 1980 to 2008. Some attribute this growth to increasing acuity, driven by the shift to outpatient care, and the transition to all private room facilities; however, during the same time frame, advances in miniaturization of equipment, integration of space-saving technologies such as high-tech booms in procedure rooms, electronic healthcare information systems of numerous types, and other efficiencies should have had some impact, or at a minimum, growth in space should have leveled out. Now, similar to the experiences of the fast-food industry, many hospitals have realized that the initial charm of super-sizing can develop into an unappealing and costly example that bigger isn't always better.

Hospital Space Utilization

Looking at the bottom line and strategies for moving ahead

The initial capital cost of hospital space is high at roughly $600 to $800 per square foot and even higher in some markets. In addition, the average annual operating cost ranges from $15 to $20 per square foot depending on the use of the space. Just as the healthcare industry has been challenged to provide care to more people, improve quality and reduce costs, many healthcare organizations are now challenging themselves to also provide more care within the same or less space.

Strategies that are now underway to dial back the super-size trend include:

1. Taking charge of space. Space has typically been allocated on a casual basis with departments becoming permanent owners of the space they occupied and the panacea for most operational problems being to request more space. Many organizations are taking charge of their space and actively managing it by documenting the current utilization, setting standards for space allocation and continuously evaluating space allocation. A recent study in which occupants of select hospital departments were required to clean, organize and declutter their space using Lean 5S techniques found that 25 percent of the staff found themselves happier and more productive as a result of the process, suggesting that some space issues can be remedied through improved utilization rather than more space.

2. Maximizing utilization. High-tech clinical areas not only house expensive equipment but proportionally, they occupy a high percentage of space per piece of equipment. Actions are being initiated by many hospitals to ensure that optimal scheduling and throughput are achieved before decisions to add equipment and major rooms are made. In addition, prep and recovery spaces are now being designed in a flexible manner to support many modalities rather than a few.

Similarly, efforts are underway at healthcare organizations to maximize the use of office space. Outside of healthcare in the commercial environment, the industry standard is that at any one time, 40 percent of offices are empty, meaning their occupant is elsewhere.  Several small-scale studies in healthcare have indicated that the empty office rate may be closer to 50 percent or greater.  Many healthcare organizations in their quest to maximize space are equipping staff with cell phone and laptops and providing conveniently located and optimally designed hoteling space to be used as needed rather than permanently assigned office space.

3. Marketing efficiency. Historically, space in the form of large, private rooms or large operating rooms, for example, has been used as a marketing tool targeted at consumers and physicians. With priorities now shifting toward efficient use of space and capital cost avoidance, many organizations have changed tactics and are marketing efficiency rather than space. For example:

  • Rethinking the need to place every ED patient in a private treatment room and instead, using a rapid medical evaluation area with chairs to treat patients faster, typically reducing the length of stay by one to two hours, and with less space.
  • Providing average size ORs to physicians but guaranteeing an attractive turnaround time or implementing standards that minimize delays.
  • Minimizing the size of the private room while ensuring that patient and family needs are met by focusing on increased nurse visibility and contact instead of oversized rooms.

As the financial impact of excessive space and overbuilding in healthcare facilities has moved to the forefront of discussions about controlling the costs of healthcare delivery, less emphasis is being placed on square footage as a determinant of quality (e.g., a bigger is better), and instead, the focus is shifting toward maximizing efficiency within space. Determining the minimum space required to meet clinical requirements whether it be an inpatient room, operating room or ED treatment bay will be more commonplace, and throughput will be the new yardstick with the minimum space allocated to maximize the care delivered.  When competitions are held to determine the minimum size of key rooms required to meet the needs of patients and clinicians, the official ending of the era of super-sized healthcare facilities will have occurred.

More Articles on Hospital Construction:

6 Best Practices for a Smooth Transition to a New Facility
Rx for Healthcare Capital Projects: Steps to Reduce Risk and Resolve Conflicts

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