Abstract
In 2003, Princeton HealthCare System (PHCS) completed a strategic plan that called for replacing its 220-bed acute care hospital—a decision driven by the need to serve a growing and aging population and the demand for new programs, services, technologies, and clinical strategies. As hospitals nationwide undertake similar projects to replace aging facilities, they face many of the same challenges. Various factors must be considered when designing a new hospital. Two significant obstacles to great design exist: First, hospital executives understand the economic and clinical drivers that affect hospital care and financial performance but often lack an appreciation for how design decisions can impact these critical factors. Second, CEOs often delegate oversight to others in the organization. The CEO's direct participation is necessary to ensure that the project reflects the organization's values and strategic and operational objectives. Solutions to address this dilemma include increased use of evidence-based design and strategies such as tying payment for design services to long-term facility performance indicators. Effective partnerships among healthcare planners, facility designers, and hospital executives will result in a new facility whose design promotes improved clinical outcomes, greater patient satisfaction, and financial viability.
In 2003, Princeton HealthCare System (PHCS) completed a strategic plan that called for the replacement of its 220-bed acute care hospital, University Medical Center at Princeton (UMCP). The decision was driven by the need to serve a growing and aging population and the demand for new programs, services, technology, and clinical strategies. Previous planning indicated that the current facility, parts of which were nearly 90 years old, could never be renovated and expanded in a cost-effective manner to meet the projected needs of patients within its service area. In addition, the local community opposed a hospital expansion that would involve acquiring land adjacent to the existing facility in a predominantly residential and historic neighborhood.
A decision was made to purchase a 171-acre parcel of land to build a replacement hospital and to develop a comprehensive health campus less than three miles from the existing facility. The health campus, a unique concept in New Jersey, will include an acute-care hospital, medical office building, fitness and wellness center, education center, pediatric outpatient pavilion, child day care center, adult day care center, skilled nursing and subacute care facility, assisted living facility, active independent living community, a health-related office/research building, and a cogeneration power plant. The total cost of the hospital including financing is $635 million, and the projected cost of all campus construction is $1.2 billion. The hospital is projected to be completed by the spring of 2012 and the total campus completed by 2015.
The challenges faced by PHCS in achieving this plan can be understood only after considering the financial model driving healthcare in general and the specific economic environment in which PHCS operates. As hospitals across the United States undertake building projects to replace all or many of their aging facilities, they will face many of the same or similar challenges outlined below:
Nationally, the cost to deliver care is increasing more quickly than inflation, while reimbursement is declining. Hospital-acquired infections lead to negative outcomes and are costly to hospitals. Competition among healthcare providers for patients with insurance is intense and growing. Access to capital is limited and philanthropy is becoming more important in financing new facility development. Operating efficiencies and new models of delivering care cannot be achieved in older, sequentially expanded facilities. Likely changes in healthcare reimbursement and federal regulations will require a stronger primary care capability and increased accountability for quality, patient experience, outcomes, and cost. It will also require more informed and engaged patients, a stronger commitment by hospitals, and timely monitoring, data feedback, and technical support for clinical improvement. Reimbursement changes are also likely to require better coordination of care across the continuum, improved chronic care management, and a reduction in the unnecessary utilization of services and avoidable readmissions. Hospitals are particularly challenged in New Jersey, where on average Medicare covers 93% of costs, Medicaid covers 70%, and Charity Care represents nearly 50% of costs. Almost half of New Jersey's hospitals have laid off employees; one out of three has frozen employee wages; and one quarter of hospitals have curtailed services. New Jersey, whose hospitals average a 1.7% operating margin, ranks 42nd among the 50 states in hospital fiscal viability. One third of the hospitals in the state operated in the red in 2010. In the past 4 years nine hospitals have closed and six have filed for bankruptcy. Adding to these enormous fiscal challenges is the fact that New Jersey hospitals have the oldest infrastructures in the country.
The preceding economic and financial factors must be considered when designing a new hospital.
The new building has to be much more than a container that holds people and equipment. It must also help address the financial and clinical challenges confronting patients and the organizations that serve them.
The new building has to be much more than a container that holds people and equipment. It must also help address the financial and clinical challenges confronting patients and the organizations that serve them.
There are two significant obstacles to great hospital design. The first is that hospital executives might understand the economic and clinical drivers impacting hospital care and financial performance, but they often lack an appreciation for how design decisions can affect these critical factors or have not participated in the design or construction of a hospital from the ground up. Even fewer chief executive officers (CEOs) are likely to design or build a new hospital more than once in their career. In addition, the average CEO is in his or her position for 3.7 years, and most new hospital projects take considerably longer from vision to completion. As a result, the knowledge gained through the process is often lost. Conversely, many designers lack the education, training, or experience to adequately identify and address clinical and financial healthcare drivers.
The second challenge is that hospital CEOs often delegate project oversight to others in the organization. The CEO is uniquely qualified to direct the project in a manner that best reflects an organization's values and strategic and operational objectives and balances competing organizational needs and political forces. In addition, early facility planning decisions have enormous economic consequences and must be fully understood before they can provide direction. The CEO's regular and direct participation is necessary to gain the insights necessary to provide critical direction for the project and to effectively participate in critical decision making.
CEOs should consider several solutions when addressing the economic challenges facing the healthcare industry. The challenge is to achieve economic and clinical objectives using evidence-based design given designers' lack of understanding of business drivers and business people's incomprehension of design considerations. The dilemma is further complicated by the misaligned financial incentives of hospital and designers. Following are some suggestions to help align those incentives.
Increase the use of evidence-based design to ensure that design solutions are effective in addressing important, measurable organizational objectives. Strengthen interdisciplinary professional education in architecture, interior design, engineering, and healthcare administration by addressing health industry financial and clinical performance imperatives and the role of evidence-based design in improving organizational clinical and financial performance. Tie payment for design services to long-term organizational performance such as fewer hospital-acquired infections, falls, and errors or more rapid patient throughput, increased staff productivity, and reduced operating costs as promised by design firms in marketing their services. Encourage greater leadership and participation by design professionals in the development of evidence-based design solutions that focus on achievable and measurable clinical and organizational performance objectives and ultimately support the development of payment mechanisms for professional services tied to organizational and facility performance. Engage hospital executives who have experience in developing new hospitals and with designers and project managers to bridge the gap in knowledge.
If creatively implemented, the third suggestion alone—tying designer compensation to critical facility performance—would likely lead to the implementation of other design solutions that could actually be measured and reported. Owners, designers, and researchers should begin working together to develop models for performance-based design service contracts.
PHCS used an evidence-based design approach and identified a number of design elements or features that would measurably affect patient and organizational outcomes. Among such design elements in the new PHCS facility are:
Enhanced indoor air quality with 100% fresh air in patient care areas as well as high-efficiency particulate air filtration to reduce the incidence of infections Single-patient, same-handed rooms to reduce the frequency of falls, errors, infections, and response-to-volume demands In-room staff servers containing patient care supplies, medications, and computerized documentation to increase productivity and reduce staffing costs Thermal storage, energy recovery and environmental control systems, and photovoltaics to reduce energy costs More and larger windows in patient rooms to maximize natural light and nature views to lessen stress and improve clinical outcomes Noise-reducing, sound-absorbing materials and vibration-absorbing mechanisms, and single-patient rooms to improve communication among providers and patients and to decrease errors Acuity-adaptable rooms to minimize the need to transfer patients with the goal of decreasing medical errors and falls and increasing operational efficiency Hand hygiene sinks conveniently located to prevent the spread of pathogens and reduce infections Healing art and gardens to ease anxiety, speed recovery, and improve outcomes New functional relationships between departments to improve efficiency
Under future reimbursement plans, all of these design elements should improve organizational financial performance. It is imperative that research continue to examine the actual cost-effectiveness and return on investment of these design solutions, which are purported to improve patient and organizational outcomes. The stakes are too high for patients and the organizations that serve them to fail at employing cost-effective solutions.
Although useful research results exist, judgment is required when making choices among design options. Factors to consider when selecting from among the features listed above and others include the
quality of the research evidence; hospital leadership and design team confidence in the effectiveness of design solutions when research results are unavailable or weak; cost of the solutions and the value of clinical or financial improvement; and the ability to cost-effectively delay implementation of design solutions until compelling research and financial information exist.
For example, PHCS chose to construct same-handed patient rooms as opposed to rooms that were mirror images of each other. Evidence supporting a same-handed design to reduce the frequency of errors and falls was considered inconclusive but compelling. The difference in the cost to construct the rooms was considered modest and within budget. Furthermore, UMCP recognized that it could not cost-effectively change the room configuration once constructed when additional research might be available. The clinical and financial impact of errors and falls was known, and the benefits of even modest reductions in either errors or falls over time were considered significant. In addition, the clinical project team's education and patient care experience supported the concept that minimizing variability in the environment was likely to reduce errors. The project team's experience also supported the concept that the shorter the unsupported distance patients walked from the bed to the bathroom, the less likely they were to fall. Placing the entrance to the bathroom at the head of the bed with handrails connecting the bed to the bathroom achieved that objective.
As hospital leaders made choices during the design process, reliable measures of each factor considered were often unavailable when choosing among multiple design options, but choices still had to be made with or without hard evidence to support them. When sufficient cost-benefit information was available or when research results coupled with staff and design team experience and judgment were adequate, then decisions were made from multiple design options.
Good design is driven by a hospital's financial, clinical, and service objectives. Achieving design success depends on the design team understanding and being guided by those objectives and the hospital's leadership team recognizing how design can help achieve them. As chief navigator of the hospital, the CEO has a holistic understanding of the organization's overarching goals as well as its assets and political considerations. As a result, the executive is in the best position to balance priorities and drive the project. Success depends on the design team and the organization forming a partnership based upon shared knowledge, adherence to measurable guiding principles, and aligned interests.