Healthcare service delivery is a fascinating and challenging industry. It is driven by many variables such as a growing population, ageing demographic, frequently changing Medicare reimbursement and other co-funding models as well as a fast pace of technological advancements in medicine and medical devices.

In light of this, construction of hospitals, medical precincts and facilities has never been more challenging. Capital project administrators, architects and construction professionals should play an important role in a necessary shift in thinking about the healthcare infrastructure and project delivery.

Less than a decade ago, the forces and motivations shaping this process were simpler:

  1. Regulators needed to provide adequate service for constituents
  2. Hospital administrators needed to ensure efficient patient flow and top patient care
  3. Construction groups needed to deliver projects on-time, on-budget based on agreed construction plans

The reason why this stopped working is multi-faceted. Firstly, healthcare services provision needs have evolved from turnover based to outcome based. Secondly, technological advancements in medicine and medical equipment has been much faster than advancements in construction methodologies, project planning and data and evidence driven forecasting.

Renovating and building new hospitals and medical facilities are expensive ventures, but in most cases, they are necessary. Hospitals, like other forms of property, age, become less practical and relevant to patient needs and need the occasional modification or a full-scale reconstruction to stay competitive within their market and adequately serve population needs. Whether a new hospital, facility renovation or clinic construction, a strong and modern approach to healthcare construction includes several key elements.

So given these factors and the changing environment, how can stakeholders and responsible managers adjust their approach in order to achieve better short-term and long-term results? And what are some creative and innovative solutions to deliver the most value on a healthcare project?

Financial environment and market forces: how to deliver better value

Before starting out on hospitals projects as complex as a new facility construction, administrators must know the capital and financing options that are available to them. In the private sector, as credit terms in Australia have tightened over the past several quarters, capital dollars are more carefully distributed than ever. In addition to this, Medicare reimbursements are under scrutiny and government co-funding of capital projects is becoming harder.

As a result, healthcare providers are adjusting the way they justify investment value over the life-cycle of a project. An  example of this approach is the recent redevelopment of Goulburn Valley Health (GVH) – Shepparton location. Some $168 million in funding has been allocated, over $100 million of which will fund the cost of construction, but the delivery is staged and allows for revisions after various stages are completed and collection of data and feedback. The GVH redevelopment is also a good example of a master plan in use and how it applies to various stages of the project.

Australian care providers are under pressure to transition from a volume based service provision model to an outcome or “value” based care model incorporating patients short-term as well as long-term outcomes. In doing so, they follow other large western economies and healthcare markets. This paradigm shift will require healthcare design and construction to support patient outcomes and ongoing patient management within a facility as well as in community outreach centres.

An example of this would be to transition from a maximum capacity, multiple-bed unit in a centralised location to a network of small and medium-sized outreach centres strategically located around the hub which serves to handle acute cases and direct patients to the most appropriate ongoing treatment options. This methodology is not yet fully proven and is currently being tested. However, if implemented, it will have a significant impact on master planning and project delivery. In some Melbourne based hospitals, planned expansion of “legacy” locations are on hold as they are more costly and complex than ever, while suburban based growth, including expansion of satellite hospitals and community outreach centres is at its peak.

The new generation of technology-savvy hospital administrators, designers and builders provide hope that project planning will incorporate more data and better metrics in order to justify better space planning and financial decisions as well as modular or staged approach to growth. Their decisions need to take into account return on investment and value they deliver – not only by the time the project is delivered, but over the long term even if the need for service provision changes.

Need for an integrated approach

Selecting the right team of architects, consultants and construction professionals is a bit like treating a complex patient condition. Patient treatment requires the right combination of medication, integrated therapies and ongoing feedback, whereas a successful healthcare project requires a combination of a data-driven evidence based approach, modular construction methodologies and ongoing stakeholder feedback.

Building the right integrated team as early as possible in the project life cycle is aimed at creating a situation where all members have a common goal and work on achieving it by pushing in the same direction. The entire team, including designers, builders, and key subcontractors, should work with some degree of assistance and feedback from the community stakeholders, including staff, patients and other parties.

There are several case studies showing lack of stakeholder input - for example staff reporting lack of adequate storage space, patients reporting difficulties with access and parking, rooms being too small or maintenance staff reporting lack of access to services. Considering the size and complexity of some healthcare projects, these problems seem small, but they can accumulate and create unnecessary negative feedback.

Engaging and gaining support from medical staff, community regulators and the general public should work on evaluating the long-term benefits of different solutions. In some cases, a good idea is to develop a pilot room or network of rooms in order for patients, community members and staff to get a feel for the space that will be allocated. This can be done relatively cheaply and the long-term benefits can be significant.

Using technology to its full potential

Medical breakthroughs happen faster than construction innovations. Through the years, we have seen healthcare building design and construction evolve with technological developments, but the problem is they cannot catch up fast enough with medical breakthroughs and changing regulatory environments. Australia’s hospital systems are desperate for ways to save money while trying to maintain quality of service and deliver investment value.

One of the ways the construction industry can better serve the needs of the medical community is through the smart use of technology. There are many tools being used to support integrated project delivery as part of master planning, as well as forecasting future demand and infrastructure needed to meet this demand. Additional tools are designed to support team collaboration and track performance of delivery. Finally, visualisation tools allowing the client and stakeholders to review the proposed stages of a development and how they meet the criteria of service provision required. Technology has the potential to model even more information that is relevant to the project and growth planning such as new product and equipment specifications.

Planning for growth and using modular and prefab options

The balance between upfront capital investment and future flexibility and ability to expand the infrastructure is often delicate. Part of project assessment includes expansion, tenant movements, enabling new modalities in line with demand changes and redevelopment of the overall structure. Building sections of space or entire floors to provide room for expansion in service areas where growth is expected. One way of achieving cost-efficiencies is to move less critical functions to lower-cost space.

With increasing up-front capital and land cost and the consequential reductions in the construction program scope, clients are willing to pay a premium for a project that is limited in the initial stage, to build in flexibility for future stages and desired features that they cannot currently afford. If planned and designed wisely, these built-in flexible options will reduce the future costs and time involved in changing or adding specific or unforeseen services in upcoming years.

Modern design methodologies allow for smart space repurposing and future redesign. A design “matrix” can outline standard requirements for functional areas and overlap them with rooms and spaces. This will allow for future changes.

An example of this would be allowing a situation where patient rooms can be easily converted from standard consulting rooms to urgent care rooms, so long as the requirements for mechanical and air exchange systems as well as accessibility and proximity to other modalities are met (as marked on the design matrix).

Building additional capacity into system infrastructure as well as working toward making sure that a building as constructed now will still be relevant in the immediate and long-term future is not an easy task. Even though one can predict the aging population of the area by reviewing demographic data, a variety of other factors are like moving pieces which often remain an unknown.

Therefore, for complex and strategic developments, it is always a necessity to base the project timeline on a master plan. A master plan will look at the overall size and footprint of the medical facility or group of related facilities and buildings, configuration and size of construction site, Medical services offered at facility now and in the future as well as the size of staff that will be active at the facility, as well as projected patient numbers. The master plan is a comprehensive document and architectural drawing that outlines precisely what builders will construct both initially and in the future.

One approach to consider is modular design and delivery. It involves planning a range of facilities to incorporate flexibility into space allocation and other elements so the facility can adapt to change. A modular design and delivery approach is not always the most feasible, and it needs to be evaluated on a cost-benefit basis. Sometimes greenfield projects and expansions create lower-cost space within the same building.

Another approach, which is already well-known and accepted in commercial and industrial construction is the use of prefabrication to cut down on construction costs and shorten construction programs. As more building and design professionals become familiar with prefab options available, manufactured modules will continue to find their way into healthcare projects.

Forecasting the future needs should be based more on data and less on “rule of thumb.” Planning should be carefully conducted in order for hospital administrators to not go through often gruelling construction processes more than absolutely necessary. Additionally, building designers, construction professionals and consultants should take into account the possibility of future change in standards and accreditation in the light of future building redevelopments.

Finally, green building methods and star rating for energy efficiency is a factor that should be considered. Despite a higher upfront cost, the ongoing longer-term benefit is frequently worth it.

  • Delivering on time and on budget is a big one in the industry with so many variables, but it companies weren't so driven to operate at a loss or near loss I believe it would be more achievable.