Navigating an Ever-Changing Health Landscape: Key Factors for Health Master Planning
- Becky Baron
- Amy Eagle
- Shelly Locke
Confronted by staffing issues, financial concerns and a changing health care delivery environment, health systems are seeking ways to provide their communities with the best value and high-level care.
One option is comprehensive master planning. A comprehensive master plan is a dynamic, long-term guide for future development that is aligned to an organization’s strategy and priorities. It can provide health care organizations with a clear direction for the future, enabling them to respond to any situation with agility and steadfast commitment to their core values.
University of Wisconsin Hospitals & Clinics (UW Health), the integrated health system of the University of Wisconsin-Madison, has updated data and reassessed priorities in the organization’s master plan on a roughly annual basis starting in 2017, following an iterative process designed to help the health system keep pace with changing community needs.
Dr. Peter Newcomer, Chief Clinical Officer, UW Health, said the process has helped them go back to their core principles on all their projects. And, he said, it’s also helped the system avoid wasting money.
“We always go back to our strategic plan, which of course has in it our academic mission,” Newcomer said. “If we start with who we are as an organization and where we’re going with our strategic plan…we’re much more successful.”
Liz Douglas, System Vice President, Facilities and Support Services, UW Health, said the central question to master planning is not “what do we want to build?” It is, “what do our patients need?”
System, Campus and Facility master plans can help health systems establish a framework for moving forward at interconnected levels of operations. Additional master plans—Strategic, Community and Experiential—can help define an organization’s overall strategic plan, develop an approach to serve a specific community, or describe how an organization’s brand is represented across digital and physical environments.
Taking an integrated approach to master planning can help align a health system’s goals and projects in each of these areas, with an aim towards increased quality and reduced operational and capital costs. Mike McKay, Director of Planning, Design, Construction & Real Estate, UW Health, explained that the organization’s strategic plan informs its campus and facility plans – a practice that enables the health system to be more proactive in every avenue of planning and workforce development and helps ensure each project supports the greater whole.
“It takes a fair amount of listening and understanding to put an integrated team together to tackle this kind of work,” said Jason Schroer, Global Practice Director for HKS’ Health practice.
Return on Investment
Health systems face several looming challenges, including a critical shortage of workers, extensive changes to workflow due to expanded digital care delivery and increased concerns about health equity and the social determinants of health. Competition from retail and online health outlets is also an issue. Technology and retail giant Amazon, for example, now offers pharmacy and online clinic services and recently acquired the membership-based primary care provider, One Medical.
In addition, inflation, rising interest rates and elevated construction and supply costs put a lot of pressure on health systems, says Courtney Ousley, Senior Advisor with HKS Advisory Services. The firm’s Advisory Services group comprises business, health care and design experts who work with organizations’ senior leadership teams to facilitate decision making.
“Finances are top of mind right now,” she said. “Health systems have a limited amount of capital to spend, and master planning can help guide conversations about, ‘Where can you invest capital that will drive the most benefit for your organization?’
“As higher labor and supply costs continue to erode hospital margins and some systems face downgrades to their credit ratings, access to capital will prove challenging,” said Ousley. “Hospitals with stronger financial positions will benefit from improved access to financing for facility improvements or expansions.”
Master planning helps identify opportunities to use capital in the most valuable manner. The “4 R’s” of master planning describe key questions health leaders can ask to better prepare for an uncertain future:
- Rationalize: What services are you offering, and are you offering them at the most effective locations?
- Regionalize: Can you make better use of staff and facilities by distributing services across your service area?
- Redesign: How can you modify operations to optimize efficiency, improve patient experience and recruit and retain staff?
- Right-size: What are your projected patient volumes, and how can you match your future volumes and your planned facilities?
Health systems embarking on a master planning process should evaluate their service offerings with an eye towards reducing duplication and enhancing patient care.
“Health systems may focus on centers of excellence for services like neurosciences or cardiovascular that consolidate care and improve efficiency for staff and facilities,” said Ousley.
Michigan-based health systems Beaumont Health and Spectrum Health recently integrated to become Corewell Health. In 2020, Spectrum Health conducted a master plan aligned with the system’s strategic and financial plans, driven by space efficiency and utilization metrics. The goal was to create a right-sized facility portfolio, said Alan Kranzo, Senior Director, Real Estate Strategy, Corewell Health.
As a result of this planning exercise, Spectrum Health realigned and consolidated services to increase operational efficiency. This provides patients with improved convenience and delivers a more consistent branded experience, Kranzo said.
Multiple factors are encouraging health care providers to transfer services to the outpatient arena.
Health care payers are shifting to payment models that incentivize providers to treat patients in the outpatient environment when appropriate, instead of at more expensive hospital facilities designed and staffed to support acute levels of care.
In addition, increased consumerism in health care means health systems need to consider where people in their community want to receive care. Convenience and accessibility are important to patients.
Spectrum Health’s planning process revealed the health system’s patients, visitors and staff prefer integrated care campuses that provide core services close to home.
“Health care is evolving,” said Kranzo. “You’re seeing more things done in an outpatient setting. We’re trying to locate those services where it’s more convenient for patients.”
Ousley said that as health leaders consider the future, they should ask themselves, “How do we continue to invest in maintaining and modernizing aging facilities while also investing in our local community with assets that improve access to care and focus on the greatest growth opportunities?”
UnityPoint Health – Des Moines, part of Midwest health system UnityPoint Health, started master planning in 2019 “to work on our long-term success in serving the community,” said David Stark, President and CEO, UnityPoint Health – Des Moines.
The hospital’s early master planning efforts involved shifting certain operations to ambulatory care – a forward-looking approach the organization discovered had immediate benefit. Bringing together multispecialty care providers and using technology to reach patients remotely “really helped us during the pandemic,” Stark said.
Streamlining operations can impact a health system’s facility planning in many ways. For example, “If they can improve their turnaround time in their operating rooms, they might be able to build fewer ORs in the future, which frees up capital and space for other investments,” Ousley said.
The consolidation of services at Spectrum Health improved efficiency and created more programmable space for direct patient care.
“We’re not duplicating a lot of support spaces for multiple services, such as multiple waiting areas, multiple registration points,” said Kranzo. “It allows more space for patient care and face-to-face treatment areas for our patients.”
Operational redesign – and related facility redesign – can help health care organizations improve the experience of patients, visitors and staff at their facilities. Critically, this can aid in staff recruitment and retention.
“The cost of labor has increased significantly, and the pandemic exacerbated staff burnout,” said Ousley. “Designing facilities to support the staff experience is imperative.”
Since facilities are typically a fixed cost for health systems, optimizing efficiency and balancing expected patient volumes with facility space are key to planning efforts.
For an expansion project at UnityPoint Health – Des Moines, the system took a hard look at factors such as treatment protocols for observational patients and patient length of stay to determine bed capacity and optimize space, said Sid Ramsey, the hospital’s Vice President of Marketing and Business Development.
“We try to make the best forecast projections possible knowing that this investment in infrastructure is probably the single largest expenditure the hospital has incurred. It has to sustain this organization for 30, 40, 50 years. We take that responsibility very seriously,” Ramsey said.
UW Health’s master planning process was spurred in part by “rapid growth in patient volumes resulting in significant space shortages,” said Douglas.
Lack of adequate space with no master facilities plan in place can lead to an urgent need to solve problems quickly, in what Douglas described as a “take-what-you-can-get type of approach.”
A master plan that considers the needs of patients along with efficient workflow leads everyday decisions to move an organization forward in the context of a greater plan, “allowing for the highest and best use of existing space resources and the thoughtful creation of new space,” she said.
UW Health’s Newcomer said that designing flexibility into a master facility plan can help optimize space utilization.
“As we build new inpatient spaces, we need to have flexible spaces that can be virtual care, office space, whatever we need,” he said. “Flexibility is key to our future planning.”