Originally published as part of Healthcare Design Magazine’s Take 5 series in August 2017, this blog shares my thoughts on what I consider top healthcare trends: making the most of data gathering, the pros and cons of micro-hospitals, and why healthcare providers should seriously consider stepping into the food-supply chain.
1. Data-Informed Decision Making
As the data available to us to help guide the design process continues to expand, the way we analyze and communicate this data should also evolve to facilitate informed decision making. One recent example for Array was a greenfield hospital where our initial design concept modeled an approach that resulted in a 68 percent energy use reduction (when compared to the owner’s existing facility); but the proposed design required a $3.86M construction premium over a code minimum strategy, which was initially unacceptable (even though the return on investment was only a little over four years).
However, using the client’s actual negotiated energy purchase rates and operating revenue, we could demonstrate that every dollar of energy purchased required an offsetting generation of $26.39 in gross hospital revenue. Applying this calculation to the proposed design resulted in $924,237 in annual energy cost savings, which meant $24.4M less in offsetting revenue-generating services that the hospital would have to deliver every year (or conversely, $24.4M in revenue that could go to patient care instead of energy purchases). Since this project was a replacement facility in a location that had very little potential for demographic growth and/or market share increase, lowering the energy purchase burden to align with revenue potential was the most responsible fiscal decision for our client.
2. Thinking Micro
The impact of Medicare’s site payment neutrality continues to be debated within the industry. As facility fees are reduced for outpatient services that aren’t delivered on a hospital campus, many providers continue to explore the micro-hospital model as a distributed platform to reclaim previous reimbursement levels. While the idea of the micro-hospital may seem attractive, there are several factors that continue to give some providers pause, including:
- general and local exceptions and/or exemptions (such as off-campus outpatient cancer facilities) that continue to be identified by the Medicare Payment Advisory Commission;
- regulatory and licensure hurdles, which are far greater for micro-hospitals than the typical outpatient facility;
- and the current political debate regarding the long-term viability of the Affordable Care Act
Additionally, while the micro-hospital may yield higher billing rates because of its “hospital campus” status, these rates need to be balanced against the increased costs of institution occupancy construction (compared to less stringent business occupancy classifications for typical outpatient facilities) and the increased costs of operating the facility 24/7/365 (compared to standard outpatient business hours), as well as the potential for census reductions/revenue losses in other system facilities as existing patients are redistributed.
3. Accuracy, Accuracy, Accuracy
As the design industry continues to both compile more evidentiary data and understand how to integrate other non-traditional data sources into design thinking, our ability to accurately predict the impact of design options is exponentially increasing.
For example, by inputting psychographic and consumer segmentation data into probabilistic choice equations and comparing the results to “heat” maps that illustrate the services that are available to specific communities, we can not only gain a much clearer picture of where facilities should be located, but can also understand the features that our designs should include to maximize market share.
After a project’s specific goals are empirically defined, we can feed them into Artificial Intelligence generative design engines, such as Autodesk’s Project Dreamcatcher, to scenario-test design effectiveness on a much larger scale than has ever been possible.
4. Coordinated Care
The Functional Medicine view of total health focuses on understanding the interactions between our lifestyles, dietary habits and environment with our gastrointestinal, endocrine and immune systems. This system strives to find root-causation of imbalances and identify behavioral changes that can heal without an over-reliance on medications.
As this approach becomes more widely taught and practiced, the facilities we design must support holistic and integrated care. In the past, the only way to achieve a true full-spectrum of care might have been the creation of super-sized facilities that had full-time multi-specialty representatives. With the expanding sophistication and availability of genetic testing, we are beginning to see the ability for providers to more closely pre-align individual plans with facility staffing needs, resulting in smaller facilities with the capability of delivering wide-ranging care in a single visit. Since smaller facilities require less capital to construct and operate, coordinated care can be much more efficiently and widely distributed.
5. Food as Medicine
The potential for the healthcare industry to take a leadership role in diet and nutrition is skyrocketing as the benefits and compromises associated with our food choices are more widely understood and accepted. Instead of allowing commercialized, mass-marketers such as Walmart and Amazon to take control of the food supply chain, the time is right for future-thinking healthcare providers to step in.
As the mandate for population health management (hopefully) transitions from concept to efficacy, the healthcare industry will still face the challenge of identifying revenue streams outside of episodic care. Creating a meaningful alignment with the food supply industry has significant, untapped potential to augment the healthcare industry’s bottom line in a way that can be extremely beneficial to their communities’ health.