Capital Projects in Health Care: Getting Started

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By Joanie White-Wagoner

Launching a major capital project is a challenging and rewarding undertaking, especially in health care, where your new facility will transform and save lives. Whether a new hospital, clinic or urgent care, it is critical that you have a strategic plan in place as you navigate the difficult nuances of following a capital project through to completion. 

As a longtime hospital CEO and COO, I have seen firsthand what it takes to make the dream of a major capital project come to reality and the challenging path of bringing that project to life. Through the years, I have been involved in more than 15 capital projects and served in a range of capacities from planning and design to work-flow development, equipping and staffing and day-to-day operations after opening day. 

We all know that health care construction projects can be even more difficult than building a typical commercial facility. They are highly regulated, intricate and complicated structures that must go through a stringent series of certificates and occupancy inspections by many governing bodies. And rightly so, as these facilities will hold people’s lives in the balance as they provide the highest quality care. 

First, it’s important to remember the crucial role your startup will play in the community and what it will mean to the patients and families it will serve and the employees who will work there. This startup will save lives, change people for the better and create hope for those who seek care within its walls. 

For staff, it will be more than just a job, it will bring new talent to the community and it will boost the local economy. And it’s important that the community has adequate support services to draw talented health care professionals there – including housing, schools, and recreational opportunities.   

When assessing the need for a new health care startup, typically an organization first looks at the health care needs of the community it will serve. Some things to consider: What is the current accessibility of health care services in the market? What is the drive-time from other facilities? Are your competitor’s services currently at capacity? How will you rise to meet that need?

Organizations use a range of analytics to determine how their startup will fit into the existing services currently in the community such as the number of referrals, outmigration and claims paid data. If your company has an employee-sponsored health plan or part ownership in a plan, consider partnering with a company such as Truven analytics or a similar consultant to obtain this data. 

From there, the organization needs to make the determination whether a startup is in the best overall interest of the company strategically. Take a hard look at your finances and be honest with yourself. Do you have the funding to build and sustain operations for the first three-to-five years until the facility becomes self-sustaining?

If your organization is prepared to undertake a startup, now consider what kind of facility you will build. There are several differences between the types of startups a health care organization will undertake. Community hospitals and clinics are similar in that they will provide care for patients and have some of the same key elements including staffing, physician recruitment, workflow process, IT infrastructure and EMR implementation, however they will be on much different scales. Clinics do not need to go through as much of the strict licensing and CMS accreditation and inspections as that of a hospital. Hospitals and clinics also have different policies and procedures as well as credentialing and bylaws requirements. 

It’s also important to know what kind of team you will be building for your startup. This depends on where an organization is in the process of the startup; but patient flow must be taken into account from day one of design, before any ground is broken.

From designing the rooms, to ordering the equipment that will fill these rooms, everyone needs to be on the same page and work together collaboratively for your project to be a success. Silos are never good on a startup project if a system is managing the entire process. 

Case in point: If you are not listening to your team members and working together, you very well might design a room that is not large enough to hold the stretchers you just purchased, affecting patient safety in the event of a code. This is where having an experienced architecture contractor is key. Do your homework and make sure they actually have a proven health care construction background. 

Once an organization has put all of these considerations into place, they’ve done their due diligence and gotten the project off the ground, how do you measure a successful outcome for your startup? That depends on the goals of the organization from the outset. 

Of course, we all want to provide the highest quality care to our patients, have great patient satisfaction scores and a patient safety record. But there are also other measurable goals to take into account. 

Was your project completed on-time and on-budget? Or better yet, under budget? For some organizations, the goal is to be fully-staffed and equipped with a minimal amount of change requests, which can be very costly, because any kind of delay will cost you money. For some organizations it may be all of the above. There are many factors that contribute to a successful startup project. 

With all of these things in place, when the ribbons have been cut and the visitors are finally utilizing your facility, the real work begins. You are serving the community’s needs and you are in it for the long haul. 

It’s an exciting and rewarding experience to go from an idea and a dream, to actually opening those hospitals doors to serve the public. Hopefully, with a little of this advice, your organization’s project will be a success and rise to the challenge of filling a crucial need in the communities we are all privileged to serve. 

Joanie White-Wagoner is a healthcare executive and trusted advisor with a record of providing strategic long-term financial planning, discipline, and strong leadership. She writes about the healthcare industry and organizational growth at https://www.joaniewhitewagoner.com/.

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