Managing Hospital Construction Projects
By Mike Lobash July 2006 - Facilities Management
Visitors to Kaiser Permanente’s clinics and hospitals are as likely to see plumbers and masons as they are doctors and nurses.
The health care provider’s facilities group, led by Senior Vice President Christine Malcolm, has seen its project operations group swell to 2,700 members. In the past four years, the National Facilities Services department has hired trade union workers, project directors and others to see Kaiser through a 10-year, $20 billion building program that will add hospitals, refurbish medical centers and improve seismic performance at facilities in California’s earthquake-prone regions.
That’s an immense undertaking even by the standards of the nation’s largest HMO, or health maintenance organization.
“We’re a large health care company,” Malcolm says, “but we’re also the largest construction company in California right now.”
Since joining the nonprofit organization in September 2004, Malcolm has brought on 15 senior managers to oversee the construction effort. It has been a challenge, she says, to take an organization accustomed to hiring medical personnel and turn it into one that recruits construction workers. The company ordered a compensation study. It had to issue job descriptions. But mostly, it just had to wait for the recruitment efforts to take hold.
“I have a saying,” Malcolm says. “Hire in haste and repent at your leisure.”
Meeting health care needs
The near-term plan calls for the addition of six hospitals next year and another nine over the following two years. An additional 10 hospitals could open between 2010 and 2013, although those plans have yet to be approved by the organization’s board. What’s more, upgrades are planned at Kaiser-owned medical center campuses and offices. Kaiser owns hospitals in states that include California, Washington, Oregon and Hawaii.
Undertaking such a sizable building program not only gives Kaiser the opportunity to create the space necessary to meet the medical needs of a baby-boomer population expected to live longer than any preceding generation, but to further align Kaiser’s facilities with its mission, the health care needs of the population and demands of medical technology.
John Kouletsis, national director for strategy planning and design, which is one of the operational units Malcolm oversees, is charged with developing many of the hospital design standards that will be used in the new and refurbished facilities. A primary tool used in the development of those standards is communication. As a 13-year veteran of the organization, Kouletsis says his department makes it a point to include doctors, security personnel, nurses, medical technicians and others in the design process.
“We have always had a deeply integrated team,” he says. “If we don’t talk to a nurse or to the guy that cleans the buildings, we can’t do our jobs.”
Kouletsis and the 50 people working in strategy and design use a combination of content expert panels, charettes and design laboratories to create building templates that serve as the basis of Kaiser’s medical center designs. Regions can — and do — make changes, but they all start with an organizational template.
The expert panels are comprised of doctors, radiologists, nurses and end-users who offer input to architects regarding the efficient use of space, the type of space they require and specifications of medical equipment. One of the more involved research efforts the group has undertaken started four years ago when Kaiser purchased a building containing seven clinical spaces in Anaheim, Calif.
The space allows Kaiser to experiment with the layout and design of patient rooms, surgical suites, imaging rooms and other types of spaces. Until the team has an idea of how a room should look, sheets are hung from the ceiling to represent walls. Tape is used to mark doorways. Cardboard boxes represent furniture.
Once a preliminary design is identified, then a mockup can be done to give the team a better feel for the room and others can be brought in to view it, Kouletsis says.
“It’s more cost-effective than having every hospital in every Kaiser region do a mockup,” Kouletsis says.
The facility in Anaheim has served its purpose so well that it is being replaced by a new and updated one, Kaiser's Garfield Center for Health Care Innovation in San Leandro, Calif. In addition to serving as a design experimentation lab, the new space will be used by medical staff members to stage mock emergencies. Certain pieces of medical equipment will be brought into a mock surgical suite, for example, and doctors can test to see that equipment is positioned optimally to respond to different types of situations.
In 2005, Kouletsis’ group reviewed 3.8 million square feet of space submitted by medical centers in the organization’s operating regions. His group only looks at projects with a price tag of $10 million or more. Smaller projects are handled at regional levels. To control costs, Kaiser has developed a cost model that allows users to define parameters of projects, such as the number of beds, the type of space being built and the type of equipment to be used. The model then estimates the project’s costs.
Malcolm says architects have told her Kaiser likely gets 10 percent more hospital for 5 percent less money than most hospitals.
“Most projects are 10 to 15 percent below the California mean cost of hospital construction,” Malcolm says.
To expedite planning, design and construction, Kaiser prequalifies architects and contractors through its alliance partnership program. In addition to reviewing qualifications, Kouletsis says, Kaiser wants to be sure that the firm it is hiring isn’t too financially dependent upon Kaiser projects.
“We don’t want a firm that gets 75 to 80 percent of its revenue from Kaiser projects because we don’t want that firm to go out of business if a project is stopped,” he says.
The effort to maximize the efficiency of hospital space and to minimize the expense in getting that space built is in keeping with Kaiser’s history. A United International News reel from the 1950s shows Henry Kaiser, the organization’s founder, holding “plans for an ultramodern hospital” — a one-story structure that allowed patients to be wheeled quickly on gurneys from room to room. Babies could also be passed to mothers through a bassinet-like drawer between the wall dividing the mother’s room and the centralized nursing station. Fathers, meanwhile, could wait in a lounge to “get the news officially and suffer under the most comfortable circumstances possible.”
Impact of information technology
That was then. In the 21st century, Kaiser’s building plan will address such issues as the increasing the use of information technology and in creating a consistent look among the organization’s 30 medical centers, located in nine states and the District of Columbia.
In 2003, a year before Malcolm joined the Oakland-based health care provider, Kaiser’s chief executive officer announced the organization would implement a digital medical record-keeping system. The goal of KP Health Connect, Malcolm says, is to keep patient records, including radiographic film, digitally.
The facility implications were monumental. While the ongoing effort is reducing the need for thousands of square feet of document storage space, it is creating information technology infrastructure requirements. In the organization’s southern California region alone, Malcolm says, 4,000 medical carts had to be wired and an equal number of computers had to be networked so doctors and nurses can access records where required.
Storing radiology records digitally, however, has eliminated the need to process film, saving 900,000 gallons of water annually and sparing technicians the task of handling harmful film processing chemicals.
“The requirements are easiest to deal with in new construction,” Malcolm says.
Also in 2003, a few senior executives pointed out to that the appearance of the organization’s facilities varied significantly from region to region. When Don King, director of maintenance operations consulting services, asked whether they were perceiving differences in color or space layout, the answer was succinct: “Yes,” they told him.
King embarked on a visual assessment of the organization’s facilities through visits and pictures to determine what was different. In many cases, colors varied. In some instances housekeeping routines and standards differed. At other hospitals, landscaping was at issue.
Knowing that the construction program was on the horizon, King then developed a facility condition index for hospitals in the northern California region that helped prioritize funding for improvements that needed to be made. He created a matrix to determine how important items were from business and technical standpoints. The result is a four-square box that shows whether items are important to both or to just one.
“You want to apply capital dollars to those items that are important technically and that are important to the business,” he says.
But at the same time, Kaiser does not want to ignore items that are extremely important, even it they do affect just one side of the matrix. Elevators, for example, are not importantly technically, but are very important to the business, he says.
In creating the index, King excluded facilities that were less than five years old, those that would be abandoned in five years or less, and leased facilities. The results surprised him. “We had a list of deferred maintenance that was twice what I would have expected in a typical hospital,” King says.
In addition to creating the index for hospitals in Kaiser’s other regions, King plans on adding new facilities being built over the next few years to the index. That will allow the organization to stay on top of maintenance issues. New hospitals will be added to the index after they are in service for three years.
Data from the Center for Health System Change, a nonprofit group, indicates the demand for hospitals is increasing, but not simply because of the number of baby boomers, the first of which turned 60 this year. One report by the agency indicates the two reasons driving up the hospital utilization rate are medical technology and growing populations in certain markets. That conclusion is different that what many in the industry reached a few years ago when the expectation was that aging boomers would be the reason for increased demand. “We’re not our parents’ old people,” Malcolm says.
Kaiser’s Mission: Promoting Wellness
At a Kaiser hospital in Modesto, Calif., employees have a vegetable garden and local organic farmers have a space to come in and sell produce. At another Kaiser hospital, a garden containing nothing but poisonous plants helps community members learn to identify those that are harmful to children and pets.
– Mike Lobash, executive editor