Facilities Planning in an Era of Uncertainty

Many see healthcare as a steadfast industry with great security. But outside influences like technology, government, and even general lifestyle trends can dramatically change the healthcare landscape, sometimes nearly overnight. In an environment when it’s not always clear what lies ahead, how can health facility leaders plan effectively?

At our last Health Facilities Innovation Forum, facility leaders from across America got together to discuss how they’re remaining strategic despite standing on shaky ground. The panel was led by moderator Rustin Becker, Executive Vice President at Erdman. Participants included:

- David Glasscock, VP, Real Estate at Catholic Health Initiatives in Colorado
- Dave Kistel, VP, Facilities & Support Services at Lee Health in Florida
- Derek Watson, Sr. Director of Planning, Design & Construction at Children’s Health in Texas

Planning for a Hazy Future

Becker started off the discussion by asking the panelists about the evolution of their planning process: how are they tackling long term planning and assessing their needs?

Dave Kistel was the first to respond, telling about the 10-year master plan his organization developed just a few years back. Their approach was focused on the future; they didn’t want to make plans according to how they were doing business at the time.

To combat tunnel-vision, a team was composed of representatives from a variety of sectors. These included post-acute care staff, general pediatric physicians, and primary care doctors.

“It’s all about getting the right people at the table and integrating thoughts before you start drawing.”

Together, the team looked at how they could make integrated care work in the communities they served. This focus was crucial, as the organization was struggling to deal with surges in demand created by seasonal residents and a large elderly population. The process got them to step back and think about the cure process as a whole, and the outcome was “revolutionary”. Their planned facility designs and improvements were changed for the better.

One of the results was the planning of a bedless hospital in Naples. The community had expressed a need for a facility that wasn’t “for sick people”, but instead, a place of health. Opening in fall 2018, the new facility will have a healthy lifestyle center that helps patients learn how to care for themselves and manage their health, thus lowering the need for more serious hospital services.

Overall, Lee Health is paying greater attention to how it can attune itself to its patient demographics. Because of their large number of elderly patients, their facilities must provide more accommodations than average. Some of these accommodations include an increase in ICU beds and expanded dialysis services.

Derek Watson also shared some of his own organization’s planning strategies. Children’s Health is no longer making uninformed updates. They’re now relying on data and analysis to see which upgrades will have the most impact and provide the highest ROI.

One example of this policy put into practice is in the renovation of their perioperative spaces. Before any design work is done, they’re tracking workflow and traffic in these sections by installing RFID trackers in the badges of all personnel. This will identify areas where flow and efficiency can be improved. Streamlining their designs based on these findings will enable staff to treat more patients and improve the hospital’s revenue.

Preparing for What’s Beyond Your Control

Next up in the discussion was public health policy. Namely, how are the panelists coping with their susceptibility to its changes?

“If you look at Medicare and Medicaid, we’re pretty much federal government paid. So anytime there is an impact to Medicare and Medicaid (usually it’s taking money away), it sends shivers through our organization.”

Kistel’s team handles it by maintaining a watchful eye on policy news and deferring projects if necessary. For them to survive, they’ll need to shift to outpatient care and find more revenue. One of their biggest challenges right now is replacing physicians who are at retirement age: they’re pushing hard on recruitment, but young physicians aren’t interested in the traditional model of working all hours for 20 years to earn residency. This is forcing Lee Health to come up with a new model that will attract the next generation of doctors.

Watson’s answer was concentrated on public education. Children’s Health is partnering with Dallas Independent School District, putting nurses and virtual health machines in almost every school. Educating communities so that they can live healthier lifestyles will cut down on service needs for preventable illnesses, such as diabetes.

David Glasscock pointed out that trims are sometimes necessary, “You can’t do everything.” CHI is getting back to its core business by cutting alliances in non-profitable business domains, such as research.

Adapting to New Approaches

Becker followed up on Watson’s talk of population health, asking the panelists about their general strategies for adapting to this new shift in the dynamics of healthcare. How are they dealing with population health today, and how are they planning for those initiatives in the years to come?

“I think we all believe that, in the future, hospitals are going to be a cost center and people coming into the hospital are going to be a cost against us. I’m not sure exactly when that’s going to unfold, but there will be larger incentives to keep people out of the hospital. I think we’re all trying to move in that direction,” said Kistel.

Running analytics on the sickest and most frequent patients is a top priority for Lee Health. They’re putting teams together to figure out how they can prevent continuous hospital admissions for their chronically ill patients. This is important for their revenue, as Medicare patients who are readmitted for the same DRGs within 30 days are “free patients”, and the hospitals get penalties from Medicare. The current focus is on managing health from home, sending nurses to the patient homes and providing telehealth services. Kistel says it’s a cost now, but his team is seeing it as an investment that will pay off in the future.

In Texas, Children’s Health is using tech to monitor medications. For example, installing tabs that send signals to hospital every time a patient uses their inhaler. Watson says they’re looking into digital, at-home monitoring devices that patients can check into every morning to log their heart rate, blood pressure, weight, etc.

Smarter Space Planning

The final question for the panel was all about space planning. How are the panelists planning to address their underutilized spaces?

Hailing from Colorado, Glassock’s organization sees some facilities in rural areas that just aren’t getting used. They’re figuring out how to convert these spaces to accommodate more revenue-generating services, such as clinic care. If CHI has leased space that they just aren’t going to be able to use, they currently try to work out early exit from the contracts. Now, when they set up new contracts, they plan with this in mind, asking for shorter lease terms. They aren’t certain what they may need a few years down the road, so this gives them the flexibility they need to make adjustments.

Kistel said that Lee Health is putting all its concentration on direct care, as devoting space to these services is the best use of its dollars. This means moving teams that weren’t providing direct care out of the hospitals.

He warns that facility leaders have to be careful though, because some decisions can come at a cost. During the last hurricane, Lee Health’s storm team needed to evacuate their families to the hospital, but the reutilization made it so there weren’t any soft spaces that could accommodate the families. Leaders have to make sure that their attempts at optimization don’t undercut their abilities in critical moments.

Thanks to the input of these panelists, all the attendees at our Health Facilities Innovation Forum came away with a clearer vision for facilities planning in uncertainty.