The cost of delivering services is a major pressure point for healthcare leaders today.
In my Data Mine article for the September issue of MGMA Connection magazine, the spend by medical practices and hospitals today — labeled by The New York Times as “astonishingly high” — has numerous drivers.
In general, medical groups feel squeezed between increased overhead as personnel, technology and operating costs increase, all while fee-for-service payments from government and commercial payers remain static or diminish.
Practice executives who recognize a need to update their organization’s healthcare environment to confront these challenges are likely on the right track, but redesigning a group practice space is about much more than front office décor or a fresh coat of paint.
That was the key takeaway from my recent conversation with David Baker, director at Health Facility Advisors in Denver, and a longtime MGMA member. In his 35 years of designing, building and financing healthcare facilities and spaces, Baker finds a direct link between facility design and not just operational efficiency, but also revenue and care outcomes.
“It always begins with ‘form follows function,’” Baker says. “We look for the bottlenecks and the patient flow areas. If patient guests are waiting too long … you may not have enough throughput in your triage area for vitals and exam rooms per provider. If the physician is waiting for the patient to get undressed, redressed or exit and then you clean for the next patient, you’re losing provider efficiency in that time.”
In listening to Baker, you can sense his approach to the patient experience by his use of the word “guests.” This approach goes beyond a rethinking of workflow, taking cues from spaces that are intended to elicit joy and amusement.
“The process is much like a Disney attraction — it should be easy to follow, comfortable and efficient,” Baker says. “Everything really gets designed to channel the logistics of people up into those spaces,” including the behind-the-scenes back office spaces for providers and staff, which increasingly are opened up for a collaborative environment rather than cubicles or walled offices.
Health facility design today looks more like a spa environment or resort. “The patient guest experience is positive, it’s inviting,” Baker says. “We look a light, colors, acoustics — anything and everything we can to create that soothing environment, because most people are pretty apprehensive about going to the doctor.”
Making that positive environment stick means evaluating the facility design beyond just the brick and mortar, too. Practices want to pull their physicians’ faces away from the EHR and back toward the patient while still delivering the right patient information at the right time.
Without the classic manual environment of a paper chart on the exam room door, the concept of health facility design also should include how your providers make use of technology, Baker recommends.
“Physician providers are working off iPads or even their own iPhones and pulling up the daily information and patient,” Baker says, but “they’re caught with 20 seconds trying to read the patient file” to understand the issue before heading into the next patient visit.
How busy your providers are also should be taken into consideration when determining the number of exam rooms needed. Baker points to orthopedics where patients may need more time if they are on crutches or in a wheelchair — model time efficiencies may call for four to five exam rooms per provider compared to the more traditional three-room model seen in many primary care practices.
Traditional elements of exam room design also play a part, too. “We’re now laying out exam rooms as more of a couch-and-consult area so that you can actually be sitting in a comfortable chair with the patient guests and their family,” Baker says, emphasizing that a spouse or other family member often is part of the face-to-face conversation, not too dissimilar from the primary care group visit model.
Those considerations in a design process lead to a better experience, both for providers — who get the benefit of working in a pleasant environment each day — and the patients who feel they are getting better quality from their visit. This is especially true if the new delivery model centralizes to minimize referrals to other facilities and build efficiency, which can also cut down on errors and downtime, which Baker says will translate into better patient satisfaction and retention.
“Everybody remembers a positive experience,” Baker says. “People remember, and they will go back to where they had a positive experience.”
Bringing it all together
These broader elements of facility design work best when healthcare executives bring all the affected members of the organization together in a “synchronistic model,” Baker recommends, to avoid investing substantial capital in a new design only to be left with providers and staff trying to figure out the phone and IT systems.
“We’ll have equipment, telecommunications, security and services — we may even have financial — sit with the construction, design, engineering and ownership decision-makers” together to lay out and design the whole experience, Baker says. This approach clarifies the needed infrastructure (both physical and digital) and is an important process for financial officers to understand the scope of work to better capitalize or amortize the project.
“Real estate projects are very expensive on the very front end, but once they are amortized out properly, they really become pennies in the overall profit or revenue, income and expense of the ongoing operations,” Baker says. “The bigger cost is staff, so if it’s properly designed or renovated, a one-time cost for a renovation maybe eliminate a couple FTEs or add some increased throughput opportunities.”
Renovations should pay for themselves in time, but Baker says that the costs of ongoing renovations in some facilities should have an approach similar to big Fortune 100 companies: “No longer do you pay all your cash on a front-end expense, you find the best way to capitalize that and amortize it over time.”
Those sources of capital in today’s market extend beyond the traditional capital investment banks. In addition to the hot market of private-equity and venture capital interest in certain specialties, some organizations can seek out community investments for leveraged dollars for improvements beyond reworking exam rooms or knocking out walls.
Baker says to think of a specialist clinic with high-end equipment, such as a surgery center or oncology practice with a linear accelerator: “Those are all opportunities to create a domestic investment environment that literally save millions of dollars on a health system’s bottom line by not having to allocate those dollars but still maintaining control of those assets, services or equipment through the covenants and restrictions” in capital underwriting, Baker says.
Baker also cautions against overlooking “the money that’s right around the corner from you.”
“It could be your providers are the best investors,” Baker says. “They’re great for aligning because they’re committed to quality of care in your environment and your system.”