9.25.23
The need for modernized healthcare facilities and a forward-thinking capital improvement process is more critical than ever. Beyond just designing flexible and modular healthcare environments, we must redefine our approach to meet the dynamic demands of the industry. Whether it's adapting to capacity fluctuations, enhancing flexibility, or boosting efficiency, we have to find new ways to ensure healthcare facilities remain agile and resilient in the face of unforeseen changes such as pandemics, shifting reimbursement models, and increasing competition.
In this blog post, we explore the historical capital improvement process and explain why it’s time for something more responsive and strategic.
Out with the Old…
Traditionally, healthcare organizations relied on static master facility plans that were revisited every 5 to 15 years. This posed several challenges and limitations that hampered the organizations’ ability to adapt swiftly to changes in the healthcare landscape. Some of these challenges include:
Lack of Flexibility: Revisiting plans infrequently left little room for adjustments when market dynamics shifted or new needs emerged, limiting the facility's adaptability.
Inadequate Scenario Planning: Failure to anticipate and plan for alternative scenarios left healthcare facilities ill-prepared to handle unexpected events.
Slow Response Time: The decision-making process was sluggish, hindering timely responses to urgent challenges.
Reactive Solutions in Short Term: In between master planning cycles, organizations often had to make large capital investments to correct or enhance certain buildings to react to an immediate need. These projects would rarely account for larger system needs, resulting in sunk costs (or direction reversals) for projects in subsequent master plans.
Vulnerability to Leadership Changes and Economic Turbulence: The reliance on rigid long-term plans made healthcare facilities vulnerable to becoming stagnant when faced with poor leadership decisions or economic downturns.
A contemporary capital improvement process acknowledges the importance of large-scale strategic master facility plans while emphasizing the need for frequent reassessment to remain responsive to market shifts. Here's how it should look:
- Incorporate Flexible Design: Keep adaptability in mind when designing your facility, incorporating modular components and scalable infrastructure to accommodate changes in demand and medical advancements.
- Plan for Surge Capacity: Surge capacity is essential to handle sudden increases in patient volume, whether due to a public health crisis or other unforeseen events.
- Optimize Human Resources: Consider staffing needs and ensure your facility's design supports efficient workflows.
- Explore Alternative Care Settings: Innovative healthcare delivery models, such as hospital-at-home programs, have shown improved patient outcomes and a reduced strain on hospital infrastructure.
- Be Strategic about Investment/Capital Allocation: Allocate capital strategically and keep it fluid. This enables you to invest in emerging technologies and address pressing needs promptly. It can also improve average age of plant aspects in credit ratings.
- Know Your Market: Recognizing the unique demands of different markets and tailoring facility plans accordingly allows healthcare organizations to meet specific regional needs more effectively.
- Be Agile in Your Decision-Making: Establish protocols for swift decision-making so your facility can respond promptly to changing circumstances.
- Collaborate with Payers: Engage in open communication and partnerships with payers to ensure alignment with reimbursement models and enhance financial sustainability.
…In with the New
The imperative to modernize the capital improvement process for healthcare facilities cannot be overstated. It is no longer sufficient to rely on infrequent and rigid plans that thwart adaptability and responsiveness to a rapidly evolving industry. Embracing strategic flexibility and frequent reassessment is vital for healthcare organizations to thrive, become resilient, and lead in this dynamic landscape.
By breaking free from the constraints of the past and adopting a forward-thinking approach, healthcare facilities can position themselves as industry leaders, setting new standards for innovation and patient care.
Contact our experts.
Edited by: Matt Maslin
