Navigating the Space and Cost Tightrope of Healthcare Facilities

By Kelly Schreihofer

Context and Challenges

Facing overburdened capacity at many of the nation’s healthcare facilities is not a new experience, healthcare leaders are driven to expand facilities to accommodate population increases—while lacking the funds to do so even before COVID-19 existed. The resulting balance between space, and the costs of building and maintaining it, can often feel like a tightrope.

Frequent changes to reimbursement rules are just one part of the equation. ER visits fluctuate, trending down as the number of patients with insurance increases, then upward again as coverage decisions are reversed and insured patient populations fall. Demand on the ER system and the associated billing changes in a pandemic also dramatically impact facilities.

Additionally, urgent care clinics are seeing higher usage as population demographics change. On-demand care appeals to a growing number of patients who would rather see a doctor when it’s more convenient for them (e.g. weekends), than make an appointment and take off work.

At the same time, leaders are concerned with COVID-19 and the already ongoing changes in rulings from the Centers for Medicare & Medicaid Services (CMS), making their prospective payments unreliable, which puts a further strain on healthcare systems.

Both space constraints and funding challenges are closely interrelated, as many systems and providers simply don’t have the budget to expand their facilities to meet growing demand. This is especially true in California, where the cost of building new facilities is much higher than the national average. Budget is also a new struggle as hospitals where forced to cancel elective procedures during the pandemic, many of which help significantly fund a number of hospitals.

To address these challenges, leaders can look to examples where creative planning, good change management, and rethinking space and resources helped to balance costs and improve efficiencies.

Planning, Change and Collaboration

Creative, Savvy Planning. Creative, savvy healthcare planning offers a path forward. Thinking outside the proverbial box yields flexible solutions that enable leaders to do more with less.

Multipurpose spaces, such as ER swing spaces, offer an excellent example to consider. A triage room could be used as a two-bed patient room in a situation like a flu epidemic, where unmanageable numbers of people would otherwise sit in the waiting room. Opening a triage room can get patients into a bed for observation, fluids, and either admission or release to help unburden the waiting room.

Exam rooms that can also be used as consult rooms are another example of expanded use through flexible design. However, while exam rooms can be dual purpose, there is less opportunity to co-use inpatient rooms because turnover is very high. One way to combat this is to create a wing that is flexible in influx situations like the pandemic. If you could flex a medical surgical unit to a slightly smaller number of negative pressure isolation rooms in less than 24 hours would that be worth the initial HVAC upgrade costs?

One solution is to co-host ancillary services. For example, a behaviorist and a nutritionist, each of whom are only on site one or two days a week, can share an office.

Selection. Despite the need to streamline operations and improve efficiency, significant changes that affect staff can understandably result in resistance. How leaders respond depends largely on organizational culture.

Some cultures have a very strong leadership decision-making component, while others have a more grassroots, inclusive decision-making component. Both have advantages and disadvantages.

When an organization is inclusive, group collaboration approaches offer more advantages. Changes come from front-line staff providing care and services, and as a result are more incremental, making it easier for staff to adapt. Inclusive managers are considerate of the front-line staff, and, therefore, receive more feedback. Although the amount of feedback can be considerable relative to a dominant management culture, the outcome is more input allowing for more informed decisions.

Therefore, wisely assembling a group of decision makers to come up with an effective strategy for developing solutions and implementing changes requires careful selection. These candidates are willing to look at a variety of options. They also value each individual as a professional, not just a commodity, to reach the ultimate goal of great patient outcomes.

Furthermore, group members must be open to change and excited to explore new ideas. It is important to have a balance of participants who have several years’ experience and really understand the way the facility works, with participants whose careers are ahead of them and who will be around to see the plan come to fruition.

Whatever the group’s makeup, putting an array of people with different perspectives in a room together to navigate operations and create strategies that can be replicated is an effective solution. However, with a diverse group that provides thoughtful input, it is infinitely more important to get approval on a final solution.

Using a lean tool – choosing by advantages, for example – can be a way to regulate emotions, come to a group decision, and help garner that final approval. Another way to aid consensus is for the team to focus the decision tree on a certification system like Planetree International, which is designed for patient centered care.

Collaboration. Collaborative planning results in a solution that has the intrinsic endorsement of the cross-functional team who were key to its creation. However, even effective group-generated solutions must be progressively implemented, in incremental steps, to ensure widespread acceptance and implementation.

When care providers and staff who are affected by new solutions and policies are consulted ahead of time, they are more likely to recall their buy-in when the time comes for the new approach to be broadly implemented and therefore advocate for it.

One way to achieve buy-in is by harnessing the benefits of virtual reality (VR) technology. Staff can virtually experience their daily routine in the new space. The ability to visualize and experience the space completely transcends the effect of viewing plans and drawings and can advance the conversation for employees who may be understandably resistant to change. In this way, VR training can be a powerful means of planting the seeds of change before the project is built.

Solutions and Strategies

Process changes. Process changes such as virtual check-ins, combining services, and telemedicine, among others, can be a huge differentiator in the efficient use of space balance.

Streamlining the patient intake process is one way facilities can save space. If patients can check in virtually, perhaps even before they arrive at the facility, this frees up resources to treat patients.

In rural hospitals, where staff is often overstretched and under-resourced, combining and collocating departments to share nursing services can reduce the number of full-time workers on the payroll during the less active overnight hours, while still satisfying laws regarding the number of patients per caregiver.

Telemedicine is another emerging, though quickly growing under the pandemic, change that can make a significant difference for rural hospitals. When patients are referred to a specialist, but the nearest practitioner is miles away, holding a video consult with the specialist at their primary care physician’s office may be sufficient for a diagnosis. This appeals to both patient and provider because it not only saves the patient significant time and cost; it also improves provider efficiency.

Centralized versus decentralized nurse stations. When the debate focuses on centralized versus decentralized nurse stations, the conversation ultimately is about whether staff are willing to invest in enhanced circulation.

A transparent discussion about what people see on a daily basis and how they can improve flow will result in a solution that works for everyone, even if that is a hybrid between centralized and decentralized stations.

Storage. Another kind of flow improvement can come from choosing a time-saving storage solution. In one hospital, for example, IV supplies needed to administer patient medications were kept in a clean supply room. Nurses and providers had to constantly enter the room to pick up needles, IV bags, poles, and so on.

In the past, they carried the materials to a medication room, which lacked adequate work surface space to place supplies and access medications. For this provider, moving the IV supplies to the medication room was a simple, clear solution that saved time and reduced frustration for everyone.

Pharmacy plus lab. Pharmacy and lab groups are often among the most willing to talk about possible solutions for process and layout changes.

In one example lab, two people worked overnight, and eight people during the day. The team sought a solution that was comfortable for both, where the two-person overnight crew would feel safe and not have to travel long distances, while the eight-person day crew wouldn’t feel unnecessarily constrained.

The employees talked about flow and optimizing functionality together. They arrived at a bench layout that worked for both groups, moving things that were accessed less frequently—like printers—above or below the main counter to free up space.

At the same time, the solution consolidated other functions to make smaller spaces easier to use. The group located the overnight functions more centrally, promoting better visibility and security for the overnight crew without compromising the workflow of the eight people during the day.

Standard care model versus modern on-stage/off-stage exam clinic. In another example, an outpatient clinic was switching from a standard care model to a more collaborative on-stage/off-stage exam clinic approach.

A building shell was completed on a traditional clinic layout; however, the new on-stage/off-stage approach required more square footage to accommodate the new clinic module.

The solution involved reducing the pediatrics area, as well as sharing spaces that were not used full time. These included geriatric rooms, internal medicine, etc.

A total of eight exam rooms were ultimately removed from the total project, and the reduction allowed the system to avoid removing a complete service line.

In addition, staff were given shared workspace in the central staff support area, with two to three employees rotating through one shared space rather than individual offices. The staff area’s central location provided mobility to quickly see patients in the unit.

The Bottom Line

Balancing cost. While efficiency and ease of use are key components, the impetus for these solutions is balancing costs.

Redesigning an area to optimize performance often means allocating less square footage and fewer employees to reduce operating costs.

For example, employee salaries are the most significant part of the operational budget. If it’s possible for part-time employees or those with shifting tasks to share spaces and resources, the reduction in overhead can help finance future expansions as the community grows.

When expansion does become necessary, creative and savvy planning can substantially impact the operation and construction bottom line. Still, it’s important to be mindful of scope.

For example, when studying the feasibility and impact of a new ultrasound machine, decision-makers must consider all real costs—not just the machine itself, but also construction and installation costs. Starting with awareness of those kinds of additional costs saves time in the overall analysis.

Speed to market is another cost-savings driver: the faster a facility can open, the less it will be subject to the disruptive influences of escalation and market fluctuation, and the more quickly it can start generating revenue. With construction prices continually increasing, quick, decisive action to plan and implement new strategies is especially key.

Involving the key decision makers and getting that final buy in is paramount to successful project execution. The best way to optimize the budget is by engaging stakeholders early on to determine where it’s possible to save on space, cost, FTEs, and resolving these issues in design.

Overall, committing to and executing a project requires smart and thoughtful planning that optimizes the project’s success while navigating the space and cost tightrope.

Kelly Schreihofer, AIA, is an associate medical planner with Architectural Nexus.