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Strategic Decision-making Key to Creating Competitive Healthcare Facilities

  by Megan Headley | Apr 18, 2018


  Construction, Operations and Real Estate Experts Share Strategies for Success at Florida’s Hospital, Outpatient Facilities & MOB Summit

Flexibility and informed decision-making will be central to success as the healthcare industry continues the rapid path of change set in recent years. This was one of the takeaways of Florida’s Hospital, Outpatient Facilities & MOB Summit 2018, organized by and co-hosted by the Health Care Institute, as reported by Dan Tracy. The event took place in Orlando in April.

In his session on what’s driving healthcare, Alan Whitson, president of Corporate Realty, Design & Management Institute, pointed out that significant change is yet on the horizon. “If that scares you, it should,” he said.

The biggest changes are all about numbers, as inpatient stays continue to drop, even as stays become longer because those patients who are admitted will be sicker.

As Whitson pointed out, inpatient stays at hospitals peaked nationally in 2008 at more than 35 million, then dropped to about 33 million in 2014. “Length of stay is a fast turnover,” Whitson said.

The “Right” Location Still an Evolving Target

All drivers continue to indicate that health systems looking to expand should focus on outpatient and facilities, with costs largely driving the switch from hospital beds to outpatient facilities. Whitson’s advice to healthcare providers? “Do more for less. Be smart about it.”

In fact, occupancy rates at healthcare facilities outside of hospitals are holding steady at 90 to 92 percent, said Michael Noto, senior vice president, Real Estate Services, for Welltower. That trend likely will hold because Boomers don’t want to go to hospitals unless they have to.

As Noto added, “We all know outpatient is the word of the day.”

Karl Hodges, vice president of Concord Healthcare, echoed this sentiment as he encouraged listeners to “follow the patient” when siting new facilities. “Nobody wants to drive downtown and park in a big garage,” Hodges said. Instead, healthcare providers are increasingly building facilities in the suburbs and small towns because that’s where the patients are.

But these experts continue to predict that the future will hold more virtual visits, where patients Skype or FaceTime a doctor or nurse rather than going to an office or hospital.

“The whole idea of bricks and mortar will go away,” predicted Jody Barry, formerly VP/Facilities & Construction, Adventist Care Centers and Administrative Director/Strategic Development for Florida Hospitals.

It’s for this reason that assisted living facilities may not be a smart play in the future, added Noto. “The convergence of technology will chill demand for healthcare real estate. We are going to want to stay in our homes and technology will allow us to do that,” he said.

Strategies for Smarter Decision-making

So how can healthcare systems “get smarter” about building these new facilities? Experts at the April event offered this insight:

  • Be careful during the design stage, when conflicting agendas can cause problems. Tamara Rice, Manager Architectural Design and Planning, Tampa General Hospital, encouraged decision-makers to pick their priorities carefully. Do you want to contain costs or build what the patients and medical staff ultimately will need? “The code is always changing. It’s very expensive to go back and make changes,” Rice said.

  • When done carefully, with upfront research, remodeling or repurposing existing buildings into healthcare operations can be a way to keep costs down. “If we don’t have a (profit) margin, we don’t have a mission,” commented William J. Hercules, President/CEO, WJH and 2018 President, American College of Healthcare Architects.

  • Building analytics on necessities like energy performance and equipment maintenance are critical for reducing costs. “Put the right data in front of the right people,” and you can save money, pointed out Daniel McGinn, Director Life Sciences & Healthcare Segment, Schneider Electric.

  • Improving project management processes can drive major cost reductions. According to Dan Conery of e-Builder, roughly 92 percent of healthcare construction projects are late, 85 percent are over budget and 63 percent have quality deficiencies when they open. One reason for those abysmal results is poor project management. “You need clearly defined job roles and consistent communication,” Conery said.

For additional takeaways from the summit, click here.