Capital Project Solutions – November 2012 Leveraging In-House Planning, Design and Construction Team in an Evolving Healthcare System Steve Higgs, Senior Vice President Ask a dozen healthcare professionals to describe the current state of the US Healthcare System and you will likely get a dozen different descriptions. While most won’t agree on “what” is wrong or “how” we Overall Healthcare Ranking should move forward, most will agree on the need for a change. Our current healthcare system is expensive, fragmented, complex, highly regulated and capital intensive. For the highest spending per capita on our healthcare, the US has some of the lowest outcomes. The Commonwealth Fund 2010 Report, How the Performance of the U.S. Health Care System Compares Internationally, ranked the U.S. health care system at the bottom of the list. I’m sure we can all agree that our current system is not a sustainable financial model. With our healthcare system clearly focused on doing more with less, finding leverage at all levels of an organization is paramount. So What Does Leverage Really Mean? In the physical world, leverage can be defined as the action of a lever, a rigid bar that pivots about one point and that is used to move an object at a second point by a force applied at a third. It is further defined as a mechanical advantage or power gained by using a lever. Moving from the physical definition to the intellectual output of leverage, we introduce a potential power over the intangibles: A power or ability to act or to influence people, events, and decisions. Some might equate leverage as a small investment, credit or borrowed funds to gain a very high return in relation to one's investment, to control a much larger investment, or to reduce one's own 1
Capital Project Solutions – November 2012 liability for any loss. In a changing healthcare environment, caregivers are required to do more with less and thus leverage is a term likely to be used by providers, Boards of Trustees and Chief Executive Officers. Ultimately, any leveraging opportunity must provide demonstrable stakeholder value. And, this value must be clearly described by the organization’s Mission and Vision Statement. Leveraging Opportunities An internal Planning, Design and Construction (PDC) team should understand the mission and vision of the institution and seek to support and propel both. Akin to developing a strategic plan, understanding the external market conditions is a good first step toward identifying internal leveraging opportunities. As the market continues to consolidate and evolve, the team must Sample Internal PDC Organizational Structure be prepared to evolve with it. Internal leveraging opportunities typically come in three forms: structure, systems and tools. The successful output of these can provide power to the team’s most valuable asset – its people. As it is often said, form should always follow function. So having a structure that meets the needs of the institution is critical. This structure will be influenced by many factors. The major driver is often the volume and type of projects currently managed or forecasted. The proximity of the facilities is another influence. For owner’s with facilities located in disparate locations (i.e. multiple states), the structure may differ from that of a sole community provider. This structure is often developed around the services the team 2
Capital Project Solutions – November 2012 will provide and the value the institution places on these services. For instance, a PDC team often focuses on managing the scope, schedule, budget and risk associated with the projects they manage. Allocating sufficient time at the beginning of a project can yield significant benefits to controlling these elements. Additionally, predicting project volume should be keenly managed internally. For owners with a sustainable building program, consideration should also be given to which services can be managed internally and which could potentially be outsourced. Finally, for owners with facilities that are geographically distributed, having a centralized project planning and development operation and the ability to implement the plans at each location, might be considered. There are many services that could be provided by an internal team:
Preplanning and Scope Development
Project Controls & Project Support
Programming & Design Management
Cost Estimating
Infection Control Planning & Management
Interior Design
Signage & Wayfinding
IT/Telecommunication Management
Equipment Planning
Commissioning
Facility Activation
Program & Project Support
Planning
&
Design
All the above could be leveraged either internally or also provided externally. Since many of the decisions on structure and services will be based on anticipated volume, the mix of services provided internally will vary. By 3
Capital Project Solutions – November 2012 focusing on core competencies and remaining flexible based on volume drivers, it is feasible to end up with the best of both worlds. Additionally, focusing on the individuals within the team and aligning their strengths with the needs of the department or institution are critical. Jim Collins in his book, Good to Great, brings great clarity to this need when he states “They start by getting the right people on the bus, the wrong people off the bus, and the right people in the right seats.” To meet the needs of the market, sometimes it takes an introspective look at the organization and the people providing these services. Some key questions to ask are as follows:
Do I have a clear understanding of the vision of my institution and how my departmental services apply to that vision?
Do the new models of care delivery and project delivery require a different approach for the organization of my team?
What are the required staffing ratios based on my current and projected capital volume?
For my “normal” capital project load, do I have a good handle on the core services I need to provide?
Which services should my team provide and which should I outsource and why?
By defining the core team structure and services to be provided internally, as well as those that should be outsourced, a team can look to leverage their processes and tools. Often, teams will first look to technology to provide this leverage and seek comprehensive and integrated Project Management software. While many options exist in the commercial market, all are likely to disappoint if the focus does not start with the process. 4
Capital Project Solutions – November 2012 Again, how the team intends to function should drive your decision on tools. The Pareto Principle states that for many events, roughly 80% of the effects come from 20% of the cause. In business, this is often equated to focusing on the 20% that usually brings us the 80% results. Much like a Balanced Scorecard, the following focus areas can often bring the greatest results:
Scope Management
Schedule Control
Financial Control & Transparency
Communication Effectiveness
Risk Management
The team should take the time to define the value and thus value stream the services it provides. In line with today’s more transparent management style, developing processes and value streams based on the customer’s “Conditions of Satisfaction” will allow for a better understanding of the voice of the customer. In healthcare, there are likely many customers that must be satisfied. These likely include representatives from engineering, supply chain, finance, clinical, etc. By establishing processes and metrics, the team can respond to customer feedback and adjust more rapidly. Developing a culture of Continuous Improvement enables the team to be leveraged to capacity. The final leverage opportunity is the actual tools themselves. Since the function (structure and processes) has been defined, developing the tools will flow naturally. Having the right centralized data base can begin to leverage knowledge and information in order to save time. In addition, developing reports and tracking mechanisms that are specific to customer’s needs will streamline efforts.
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Capital Project Solutions – November 2012 Conclusion Leveraging any team takes time and forethought. Often, the right leader can begin the journey of improvement and by providing a clear vision that gives team members the direction needed to make a difference. While this is just the beginning, real leverage comes from defining the scope of services that match customer needs and remaining committed to continuous improvement.
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