Project Management Institute

Where the Patients Are

New Healthcare Facilities Put a Premium on Convenience and Community

BY KATE ROCKWOOD PORTRAITS BY JASON MYERS

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Andrew Quirk, Skanska USA, Nashville, Tennessee, USA

Healthcare organizations know patients hate to wait.

But when people in the United States arrive at a hospital with a non-life-threatening illness or injury, treatment can be a long way off. “In our larger facilities, emergency department wait times can reach eight hours,” says Peggy Sanborn, vice president of strategic growth, Dignity Health, Phoenix, Arizona, USA.

So Dignity Health and other healthcare organizations across the U.S. are launching projects to build smaller facilities focused on convenience. Building urgent-care clinics, retail clinics and microhospitals will help these organizations achieve a goal to care for patients in their own communities, rather than drawing everyone across a region to large—and often overcrowded—traditional hospitals. But to deliver convenience and strong health outcomes, teams need to understand communities' particular health needs before gathering requirements. And they need to guard against scope creep while planning microhospitals; these facilities, commonly referred to as neighborhood hospitals, cannot offer the full spectrum of care usually found at full-fledged hospitals.

“For organizations that are looking to further embed into communities they draw patients from, these projects let them do it.”

—Andrew Quirk

Convenience-oriented healthcare facilities are not a new concept. There are now thousands of retail clinics providing basic and preventive care in retail stores, supermarkets and pharmacies across the U.S., up from hundreds just a decade ago. Growth in these projects will continue, powered by a 91 percent patient satisfaction rate, according to a 2017 Kalorama Information research report. Organizations are partnering with retail giants on projects to create clinics within stores so doctors can meet people where they already are. For example, Kaiser Permanente in September announced it would expand an in-store program to build 31 clinics within Target stores, following four successful pilot projects.

Microhospitals take the level of care one step further by including typically eight to 10 inpatient beds and providing acute care services, such as routine surgeries, like a hospital does. Andrew Quirk, senior vice president and national director of the Healthcare Center of Excellence at construction and development firm Skanska USA, has seen a recent spike of new microhospital projects. From his perspective, their healthcare and financial benefits are clear.

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“In our larger facilities, emergency department wait times can reach eight hours.”

—Peggy Sanborn, Dignity Health, Phoenix, Arizona, USA

“Within a portfolio containing medical office buildings, traditional hospitals and surgical centers, microhospitals can fill in the gaps, providing healthcare in more effective ways. They deliver better care at greater margins,” says Mr. Quirk, Nashville, Tennessee, USA. “For organizations that are looking to further embed into communities they draw patients from, these projects let them do it.”

COMMUNITY FIRST

Ensuring that a microhospital project delivers targeted benefits starts with understanding a community's healthcare needs, Mr. Quirk says. For that reason, he recommends that the requirements-gathering process first focus on researching demographics to analyze a community's health profile. For instance, a booming population will likely need more and different services and treatment facilities than an aging or declining population.

“Microhospital teams need to consider who they're serving—they're not drawing from a 50-mile or 100-mile radius, but typically a suburb,” Mr. Quirk says. “If a community is young and healthy, they need to be ready to focus on things like sports medicine. Or infant care may be a priority, and birthing centers are needed. Or if you're in Florida, there may be a need for geriatric care.”

Once the demographic profile is clear, teams should study existing local healthcare options and design a facility that can fill gaps in what's needed from local stakeholders. “The designer, contractor and owner have to look at available data about a population and make sure they're serving that population well,” he says. But teams also must look out for scope creep during the planning phase. If a project is being built to focus on a younger community, teams need to maintain that target to ward off add-ons that could complicate construction and undermine the business case.

“You need to stay disciplined with the agreed-upon scope of work throughout the life of the project. Add-ons only complicate construction, so it's important to control that upfront,” Mr. Quirk says. “It will keep the square footage down, avoid waste, and lead to clearer cost and schedule certainty. Then, once you start construction, it's pure speed to market.”

RIGHT ON-SITE

Leveraging new tech tools during execution can keep change requests at bay and budgets under control. Skanska USA, for instance, has developed visualization tools that let project teams calculate the impact of every proposed project change on the overall budget. The ability to immediately share the budget impact of a change request with the sponsor helps to minimize scope creep, Mr. Quirk says. And the change control process can yield dividends for future projects as microhospitals become more prevalent: Being able to easily replicate design features and layouts provides teams with a kind of “pre-fab” momentum.

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“You need to stay disciplined with the agreed-upon scope of work throughout the life of the project. Add-ons only complicate construction, so it's important to control that upfront.”

—Andrew Quirk

Emerus Holdings Inc., which specializes in microhospitals, has partnered with a range of health systems, including Dignity Health and SCL Health, to design and build the facilities in communities in need of more convenient care options. The organization expects to have completed 50 microhospital projects by 2020. Emerus has completed four of these projects for Dignity Health in the state of Nevada. Other projects are currently underway in Pennsylvania and Texas, with additional project proposals under consideration in four other states.

To make sure that portfolio managers at client health organizations are greenlighting the right projects, Emerus teams use a data-analytics-based strategy to identify communities with the largest gaps in convenient care that might be served by a microhospital, says Jason Lisovicz, senior vice president, Emerus, Houston, Texas, USA. Location and the partner's brand strength are probably the biggest determinants of a project's success, he says.

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“Regulations vary state by state, which can be challenging.”

—Peggy Sanborn

As sponsor organizations study the horizon for the next potential project site, they're careful to track benefits at finished facilities. At Dignity's microhospitals, patient satisfaction rates are very high, says Ms. Sanborn. The smaller facilities alleviate the kind of traffic that forces patients to spend long nights in emergency room waiting rooms. “At our microhospitals, we can treat and release or treat and admit much faster.”

WEIGHING THE RISKS

Speed is the name of the game when developing and building microhospitals. The healthcare delivery landscape is evolving quickly, and competing organizations want to stake out market share before the need for a new facility is filled. But as organizations plan projects, regulations can pose as roadblocks.

“Regulations vary state by state, which can be challenging,” Ms. Sanborn says. About two-thirds of states require a certificate of need (CON) before a project can get moving, which means a federal or state government agency must affirm that a facility meets tangible needs in a community. Ms. Sanborn's project teams haven't had to deal with CONs in California or Arizona, but she says there are still plenty of additional regulations that vary by state and can complicate project planning. “California, for example, requires our facilities to have surgical capabilities,” she says. “So we're trying to interpret that to work in smaller footprint hospitals.”

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Dignity Health's neighborhood hospital in Las Vegas, Nevada, USA

Given these potential complications and a paucity of data on microhospital project ROI, some healthcare providers are taking a wait-and-see approach. “Some clients are still nervous about putting money into microhospitals,” Mr. Quirk says.

But that cost can be perceived as relatively low risk, especially for the healthcare industry. Based on equipment needs, project budgets range from US$7 million to US$30 million. That's a sizable project budget, to be sure, but it pales in comparison to a full-scale hospital budget.

“Instead of building a brand-new, $100 million hospital, put $15 million into a space with just a few beds and expand our market coverage,” says Mark Cherry, principal analyst with healthcare research and data provider DRG, Nashville, Tennessee, USA. Even if stakeholders don't embrace the new facility, “it's not like there's a giant husk of a hospital sitting there, unattended,” he says.

Smaller project budgets mean less risk for large healthcare organizations. If the facility eventually closes, repurposing the space also becomes a smaller endeavor. “The businesses that are going to build and operate these structures know what the risk threshold is and can walk away from it if need be,” he says.

The difference between a successful project and an abandoned microhospital might come down to a combination of research, execution—and timing. “The healthcare industry is becoming heavily competitive and consumer-driven,” Mr. Quirk says. He expects these projects to eventually top out at around 250 across the country. “So to be one of the first to identify a need in a community and put down roots? Go ahead and do it.” PM

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“The businesses that are going to build and operate [microhospitals] know what the risk threshold is and can walk away from it if need be.”

—Mark Cherry, DRG, Nashville, Tennessee, USA

Convenient Care

The United States is hardly the only country in which healthcare organizations are making patient convenience a top project priority.

UNITED KINGDOM

Home Away From Hospital

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Startup company Care-Rooms wants to launch a pilot project to create a network of Airbnb-style accommodations for hospital patients, including a database that can connect patients to residences. The organization was reportedly in talks about the project with the Cambridgeshire County Council in February. The project proposal, which has raised concerns about patient safety, is intended to ease hospital overcrowding by freeing up hospital beds faster.

UGANDA

No Power? No Problem

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For some people living in rural areas, surgical needs are thwarted by a lack of electricity. The Ambulatory Surgical Facility in Kyabirwa, Uganda aims to make it unnecessary for patients to have to travel days to get an operation. Designed by Kliment Halsband Architects, the prototype facility is completely functional off the grid thanks to solar panels.

CHINA

From App to Hospital Bed

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Telemedicine can be a big time-saver—unless the onscreen doctor recommends an in-person visit, which can mean starting from scratch with paperwork, medical questions and exams. In China, online medical startup We Doctor wants to help patients avoid the hassle by providing end-to-end coverage for patients. The company has launched more than a dozen “internet hospital” projects—including one in Shenzhen last year—creating IT systems that connect doctors at brick-and-mortar hospitals to more than 150 million We Doctor users.

Less Is More

Two project trends delivering smaller facilities have altered the U.S. healthcare landscape in recent years. Microhospitals have a small number of in-patient beds and usually focus on treating lower-acuity conditions. Urgent care clinics (UCCs) provide walk-in outpatient care for acute injuries and chronic illnesses—staying open beyond a typical primary care physician's office hours and acting as a rung below hospital emergency rooms.

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This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.

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