The new hospital you’re planning may quickly become obsolete. It’s time to rethink the need for hospital care.

What you think becomes brick. What you imagine becomes steel and glass.

Across health care, organizations are changing shape, consolidating, affiliating, changing business models and revenue streams — and launching building programs to match. If you have not thought deeply enough, contrarily enough, questioning enough assumptions, you will end up with a building program that fetters rather than launches your transformation.

At the AHA/Health Forum Summit in July, Dr. Eric Topol put up a slide of a “hospital room of the future” featured in Wired magazine. It was, well, futuristic. Then he said, “Here’s my hospital room of the future,” and he switched to an empty white screen. His point: In the future the ordinary hospital room will disappear, replaced by apps and gadgets and dongles monitoring patients from home. He was being dramatic, of course. He was exaggerating, some. But how much? What will the hospital of the future look like?

Your assumptions about the nature of your organization, what you are actually doing to “make a living,” what your “community of practice” is, end up baked into the steel and concrete and glass, the coax cabling, the heat recovery systems, the art collection — and the bond debt. You end up servicing your capitalized building stock instead of the other way around.

Everyone who runs a hospital or health care organization has built his or her career entirely during a time when we were pretty clear what a hospital was, what its job was, its functions, its place in the scheme of things.

None of that is true anymore. The Affordable Care Act (ACA), the shifts in employer and payer strategies, the entire move “from volume to value,” changes the demographics of the populations you serve, changes your relationship to them, changes your revenue streams, and undercuts every assumption built into your capital program.

Sure, we will still be doing surgery on messy compound fractures. But will we be doing as many amputations from sequelae of diabetes?

Sure, we will still need a neonatal intensive care unit. But will we be seeing as high a percentage of preemies?

Sure, we will still have an intensive care unit. But when we step patients down, will we be putting them in a med-surg bed or sending them home with an electronic ICU tracking system strapped to their wrist feeding back into our 24-hour monitoring?

Check Your Assumptions at the Door, Please

Here are some questions that you may need to think differently about in planning your future physical spaces:

Information technology: bigger? Clearly information technology is a bigger chunk of the future of health care than ever in the past. But not all of the growth in information technology (IT) will mean growth in onsite full-time equivalents (FTEs) and square footage. We will see growth in three main categories of IT usage:

  • Patient engagement through “apps, dongles and devices.” These are very inexpensive and largely work over the Internet. The major capital space involvement is building and maintaining very robust Wi-Fi or other Internet access systems throughout all spaces, and providing space for the nurses or other clinicians monitoring their many patients at a distance.
  • “Big data” analysis to drive care and strategy. The data gathering, storage and actual analysis is most likely an outsourced activity, requiring little, if any, capital space.
  • Enterprise clinical and administrative software and hardware. This will expand in comprehensiveness and complexity, and will need onsite FTEs and square footage.

Evidence-based design: more expensive? Designing and building according to the evidence for patient safety, speedy recovery and better customer experience is more expensive. But what is the return on that investment? At the Center for Health Design (where I am on the board), our Fable Hospital 2.0 study established a clear business case for evidence-based design (EBD). The 350-bed Fable Hospital design specced out at about $30 million (about 8.4 percent) more expensive. The savings, based on well-formed clinical studies, came to some $10 million per year, from fewer patient falls, infections, re-admits and other costs. In other words, in a world in which you do not get paid to correct your mistakes and problems, evidence-based design pays for itself in just three years.

More or fewer surgeries, tests and procedures? Under the ACA, hospitals and health systems gain many more paying customers. This seems to augur for expansion. But studies show that a third of all the work we do is unnecessary. Many of the new risk-based revenue streams will curtail wasteful and unnecessary actions. If we don’t get paid for it, we won’t do it. How much this dynamic will affect your actual volume takes some study and a pretty high-order crystal ball.

Will prevention work? A major working assumption of the new payment systems is that good, early prevention and active, involved management of chronic disease will reduce the number and intensity of the sequelae, such as foot amputations due to diabetes. To the extent that you are successful, you will reduce the need for many tests, procedures and surgeries.

How much can we charge? We build some things (like sleep centers) because we can make money from them. For other therapies, how much we can make greatly influences how much space we allocate, how we design the space, how we imagine the workflow. Re-imagine your capital spending for the revenue case in which all or most of your billing is at the reference level, that is, the level at which the service is available at reasonable quality in your extended market, as shown by services like Castlight.

How many med/surg beds? Imagine a world in which you can do full ICU-style vital signs monitoring through a dongle strapped on the patient’s wrist, in which patients can do their own electrocardiogram from home with a cheap device snapped onto their smart phones. That is not the distant future. The devices and capability are here now, the only question is how fast we will adopt them. Now think of the actual uses your general med/surg beds are put to. The patient is recovering from a procedure? Undergoing rehabilitation or physical therapy after surgery? In for “observation and tests”? Think hard about a revenue case in which you make more money by keeping the census down and the length of stay short. Then think hard about how many of those patient days could be moved out of the very expensive and clinically dangerous environment of the hospital and into the patient’s home.

Where do we do prevention, population health and chronic disease management? The answer is “as close to the patient as possible.” Besides the “apps and dongles” answer above, this means a huge flow of actual medical work out of hospitals and doctors offices, and into clinics in schools, and workplaces, into retail and urgent care centers in malls and on street corners, and even into mobile vans, starkly different medical built environments than we are used to.

Where does targeting and outreach take us? The ACA and its sequelae in the private market do not produce a panacea in which all customers are interacting with the health care system in an appropriate and manageable way. Many still will not be covered, including millions with incomes under 133 percent of federal poverty level in states that chose not to expand Medicaid coverage. Many more will be poorly covered, including some whose coverage does not include any hospitalization (a kind of coverage allowed to squeak back into legal status in the regulations this year). Many will have high deductibles and co-pays that will cause them to act as if they have no coverage. Many will be unaware of what preventive parts of their care are covered without deductible or co-payment, or will be afraid that if they go in for the free part, they will end up paying for something anyway.

Those who stay away from the system will be those who need it the most. They still will burden your bottom line not only by showing up in your emergency department and your surgical suites without the ability to pay, but in other ways if you are in a risk relationship with the population they are part of. This means that you will have a tactical need to find ways to provide them care — early, attentive, preventive care — as close as possible to where they are. This may mean building free clinics in certain parts of town, or supporting nurse visiting programs that actively seek them out at home and help them.

Mid-Course Corrections May Be Necessary

Big capital programs by their very nature anchor you to one model, and that model may not work perfectly. It may need mid-course corrections. You might need different buildings, or different configurations than the ones you sank all that money and effort into. Even worse, huge building programs tend to consume the attention and energy of the whole organization. This can make it harder to even notice if your model needs a mid-course correction.

Similarly, big capital programs tie into another grave danger in navigating the Next Health Care: the tendency to “staff up.” There are complexities of all kinds in the new payment systems, regulatory demands and structures resembling accountable care organizations. Such complexities seem to demand extra layers of middle management. But such layers are by nature sclerotic. They are the enemy of the flexibility, innovation and nimbleness that the coming years will demand if we are to survive and serve the people.

We have not tried these business models before. We have not tried any business model in the novel environment of the Next Health Care. It is a near certainty that the first arrangements, affiliations and business structures that we make right out of the box will be faulty. That is the nature of a prototype.

There is a strong argument for caution in rebuilding the physical world of health care over the next few years, for a certain amount of ad-hocism, for an experimental flavor, for a minimalist attitude toward bricks and steel and big iron, and especially for deeply exploring every assumption we are making about the nature of our future.


First published in Hospitals and Health Networks (H&HN) Online Daily, an online publication of the Health Forum of the American Hospital Association, on September 24, 2013.