Rural Hospital Summer Workshop June 24, 2008

1. Health Facilities Planning & Development Rural Hospital Summer WorkshopJune 24, 2008 Construction Projects: Strategy to Implementation

2. Jody Carona • Health Facilities Planning and Development • Joe Kunkel • The Healthcare Collaborative Group

3. Setting the Stage… Creating the Vision

4. "I saw an angel in the stone, and I carved to set it free" -Michelangelo

5. First Things First: Strategic/Master Planning Creates the Vision • SP Process: Quantification of – • Community need and demand-inpatient and outpatient • Market position • Medical staff • Community perceptions • Physical plant needs versus current physical plant—major space drivers (beds, ED, ORs, etc.)

6. Visioning Is Also Important • May also require revisiting of vision and mission statements.

7. Understanding Your Community’s Need and Demand • What is the size of the market? • How do you define your primary service area? • Who else serves this market? • How many admissions annually? • How many ED visits, surgeries etc? • How are demographics changing? What impact will this have on future need and demand?

9. Times Are “A-Changing”

10. Demographics are a Major Driver of Future Volume • Understanding demographics is key… • Elderly use services at 2.5 times the rate of under 65. • What assumptions do we want to make about the future role of the hospital— service delivery, etc.?

11. Drill Down as Far as Possible…. • The ‘Typical’ Rural Area Slow, steady growth overall Flat growth for peds and OB women Lower % of peds and OB women Higher % of seniors Rapid growth forseniors

12. Inpatient Market Position is Easy to Quantify • Inpatient: • CHARS allows us to easily quantify size of inpatient market—by zip code of residence, patient age, DRG, and hospital/MD. • Can track changes in utilization and market share over time. • This data is key to projecting future inpatient bed needs.

13. Inpatient Market Data

14. But, We Continue to Struggle with the Ever Increasing Outpatient Market • Outpatient • Historically, much more difficult to quantify—but “proxies” are possible via community surveying and/or Solucient outpatient data. • Changes in outpatient as much a function of technology and reimbursement as demographics.

15. Understanding Medical Staff Need and Current Situation is Also Key • Should first compare community need for MD against supply. Are there unmet needs and realistic opportunities? • Must also include existing MDs in process: • Are they committed to staying in the community? For how long? • Is there a need for a formal medical staff development process. How much $$ will this require?

16. Surveys are Often a Good Way to Collect the Needed Information • Key Survey Questions • Practice Data (visits, % at the Hospital, payer mix, etc.) • Practicing In/ Recruiting to the Community • Perceived Manpower/Recruiting Needs • The Hospital’s Role in Recruiting • Specific Perceptions of the Hospital

17. Calculations of Need Should Consider:

18. How Does the Community Perceive the Hospital? Will they Support Growth and Development? • Strongly consider a community survey and a series of key informant interviews.

19. How Does the Community Perceive the Hospital? • Community survey-will address issues of: • Utilization and patient satisfaction: • Primary care practitioners • Specific outpatient services • Inpatient services • Urgent care • Specialists • Reasons for leaving the community • Awareness/perceptions of Hospital • Priorities for local health care • Demographic info (insurance, etc.) • Willingness to tax • Other issues as appropriate

20. How Does the Community Perceive the Hospital? • Key Informant Interviews: • Perceptions of hospital, hospital leadership • Role of hospital in the community • Other divergent/convergent issues facing the community • Future vision for the hospital

21. Clear goals and direction. Clear delineation of space needs at varying market share assumptions. Must take the next step of comparing existing plant to projected needs. The End Result….

22. Financial Model Logic Flow Demographics • Drivers: • Population Projections • Age/Gender • Utilization History Gross Volumes • FILTERS: • Clinical • Volume • Market Share • MD Availability/Supply • Support • Financial Specific Volumes Space & Capital Requirements Operating P&L

23. From Strategy to Implementation

24. Major Facilities Directions Replacement Major Expansion Minor Expansion 2 3 1 New New Existing Facility Existing Faculty Existing Facility New Replacement New New Major Expansion High Cost Long Duration Larger System wide Strategic Decision Lower Cost Shorter Duration High Cost Medium Duration

25. Market Analysis and Plan Financial Plan Patient Experience Hospital Expansion/ Renovation Plan Technology Physician Develop Operational Design Vision & Strategy Environment

26. Getting Organized

27. Hospital STEERING COMMITTEE Vision Baseline Assumptions Policy Strategy Image Budget CEO VP CMO COO CFO VP Support Services VP Marketing VP HR VP IT Equipment Planner Property Manager Mission Services STAFF Internal Project Lead Physician Development OPS Planning Design Equipment Planning Human Resources Information Technology Project Development Community Relations & Communication MOB PROPERTY MANAGER WORKING GROUPS Report to Steering Committee User Group Leadership & Communication Operational Concepts & Philosophies CMO COO Equipment Planner VP HR VP IT THCG VP MARKETING Hospital Leadership Physician Leaders Architect THCG Hospital Leadership Physician Leaders Architect THCG Hospital Leadership Physician Leaders Architect THCG Hospital Leadership Physician Leaders Architect THCG Hospital Leadership Physician Leaders Architect THCG Hospital Leadership Physician Leaders Architect Contractor Hospital Leadership Physician Leaders Architect THCG Hospital Leadership Physician Leaders Architect THCG Physician Need Analysis Recruitment Strategy Medical Staff Dev’t/Priviledging/ Credentialing Establish Adjacencies & Flow Department Design Room by room equipment planning Procurement Strategy Overall staffing strategy Training Leadership Development Overall IT Strategy Telecom, Voice/Data Low Voltage Access Control Clinical Applications Day to day management of construction process Public Approvals Design Control Budget/Schedule Q/C Internal Communication External PR/Image Community Health/ Mission Integration Fundraising Developer Selection MOB Development Leasing USER GROUPS LOCAL JURISDICTION Design Review Building Department Fire Marshall STATE DOH MOB Developer Physicians HOSPITAL Dx & Tx Emergency Inpatient Imaging Outpatient Imaging Cardiac Cath Lab Surgery PT/OT Rehab Therapy Resp Therapy SUPPORT Central Sterile Pharmacy Mat. Mgmt/Recycle/Doc Housekeeping Admitting Pre-Admission Testing Medical Records Gift Shop Chapel Public Spaces Hospitality/Valet Administration Dietary Conf/Med Ed/Library PATIENT BEDS Med/Surg ICU Step Down Short Stay PACU Prep/Hold OTHER Plant/Engineering Security IT/Telecom Parking Infection Control Space & Equipment Needs Room Details Room Function & Configuration Operations Current/Future Needs Project Structure Chart

28. Visioning • Different than Strategic Vision • Set Guiding Principles for Project • Overarching common attributes • Safety • Flexibility v. expandability • Efficient • Healing • Recruitment/retention

29. Visioning • Set Metrics • Measurable goals • Project-specific • S-t-r-e-t-c-h • Project-influenced goals as well

30. Keys to a Successful Project • Communication, Communication, Communication • Set of written “Working Assumptions” • Clear Decision-Making • Regular Updates • Written • Phone • In-person • Project Management – Owner/Architect/Contractor

31. Design – Getting it Right

32. Prioritization of FLOW in Design Objective Subjective Strategic Importance Patient Volume Brand Profitability Competition Growth Physician Relations Disruptive Tech Community Staffing Intensity

33. Design Issues • Clear Space Program • Master Planning – Long-Term • Project Design – Short-Term • Mock-ups and Other Tools

34. Establishing a Project Budget • Land • Entitlements • Construction • Escalation • “I” v. “B” • Soft Costs • Contingencies

35. Land Costs • Purchase Price • Criteria for Development • Time Horizons • Location, Location, Location • Infrastructure & Entitlements • Timeframes

36. Construction • Market Comps • Escalation • “I” v. “B” • Cost • Flexibility • Reimbursement

37. Soft Costs • Cost the Same as Hard Costs! • Design Fees • Engineering • Project Management • Jurisdictional Fees

38. Owner’s Costs • Medical Equipment (and Planning) • Furniture/Fixtures/Equipment • Information Technology • Cabling • Applications • Contingencies

39. MD Development & Recruitment • Do the Math • How many by specialty • Lead times/degree of difficulty • Population-based v. facility-based • “Need” v. “redistribution” • Don’t be “beggars” • Pool of potential staff • Open process/project structure/communication • Exclusives/RFP’s

40. Think Creatively

41. In the End……..