Strategic Approach to Hospital Design and Construction Cuts Cost By Twenty Percent

Most healthcare leaders understand that spending increases cannot continue indefinitely and are looking for ways to increase efficiencies. how can organizations care for more people, with better results, at a lower cost?

Challenge

A healthcare provider with more than one-hundred hospitals across the United States faced mounting capital expenditures for new-build, expansion, and renovation projects. Clinicians and patients expected the hospitals to be equipped with the latest technologies and costly high-end features—and were increasingly dissatisfied as those expectations went unmet. At the same time, there was limited standardization in design across hospitals, as clinicians and managers tended to argue that their institutions’ needs were unique.

Discovery

We quickly realized that building buy-in and momentum for the broader capital optimization effort would require a couple of high-visibility areas to pilot the improvement approach and demonstrate its value. The obvious place to begin was the patient room. This space, ubiquitous in all hospitals, played a central part in the patient’s overall experience, made up a significant portion of new-build and renovation budgets, and was ripe for standardization. We partnered with the payor to determine how a better, simpler, cheaper patient room could be designed and built. Together we created “default” design standards that could be used for most patient rooms in most hospitals—rooms which could be built using modular, prefabricated components such as complete bathrooms.

This exercise revealed that standardization could save around twenty percent on the cost of patient rooms, creating opportunities to add or improve several components that were pivotal to patient experience and quality of care. With this insight, we embarked on an in-depth consultation process on the “patient room of the future”—engaging with medical staff and patients via workshops, nationwide surveys, and immersion exercises. Alongside patient-room optimization, we launched a second pilot: improving the procurement of construction materials to standardize specifications and reduce cost. The next step was to help the provider implement the optimization effort across other key hospital-design platforms.

Impact

Our work to improve and standardize patient-room designs helped reduce costs by twenty percent over baseline designs while improving patient care and experience significantly. It also broke through internal resistance to cost reduction by involving clinicians and hospital managers closely in the redesign—and by demonstrating that standardization and modularization made it possible to add features that would improve safety, working conditions, and patients’ comfort. Most importantly, the effort helped equip the client with methodologies and capabilities to lead and sustain a wide-scale change program across all its hospitals.