Reducing hospital cost through better design

The cost of delivering healthcare, and the construction of healthcare facilities, are increasingly important issues throughout the world in developed, developing and emerging countries. The overall cost impact and total life cycle cost of a capital investment in healthcare infrastructure is rarely understood, captured or considered when making decisions regarding the construction of new hospitals and healthcare facilities, or the renovation and expansion of existing facilities. Capital project budgets and decisions typically do not consider the ultimate costs of a project including its social costs, environmental impact costs, operational costs in terms of both resources and labor, or their renovation, expansion or replacement costs down the road. Life cycle costs are difficult to capture as they occur over long periods that outlast the decision makers, designers and operators involved in initiating and implementing any given project. The first challenge is to identify all the potential life cycle costs of a healthcare project. The goal of this initiative was to develop a framework and tool that organizations around the world, in both the public and private sector, can utilize to identify, capture and assess life cycle costs of healthcare projects through case studies, best practices, and other resources. The intent is to assist design and operational decision makers in planning, designing and implementing and operating better hospitals to provide more efficient and higher value and quality care over the life cycle of a capital investment. The IHF, UIA-PHG, and TESIS representatives identified professional and academic experts with a cross section of skills, knowledge, and personal experience necessary to develop “wisdom” in the form of best practices. The results of this initial effort attempted to first define the critical issues and dimensions of the total cost impact and life cycle costs associated with the design, construction and operation of hospitals and healthcare facilities. It then defined a framework for capturing these costs, as well as identifying the constituencies involved or responsible for costs at different points in a project life cycle. One case study project illustrating an earlier decision framework in included in the appendix. The ultimate objective of this white paper is to introduce a program that could eventually be translated into a digital platform for sharing best practices about ways to reduce hospital costs through better design.