Capital Project Solutions – January 2013 Specialty Consultants - Unlocking the True Value Patrick E. Duke, Senior Vice President Shifting policy change and reimbursement structures are driving healthcare companies to be more effective and efficient. Evidence of this is the unprecedented investment by healthcare companies in technology systems such as compliant EMR systems. In addition, the built environment of care is receiving capital investment to accommodate new medical technology that can enhance the patient experience and safely perform procedures in lower cost settings. Investment also is focused on technology systems that categorize vast amounts of operational data to increase organizational awareness and control of supply chain, patient throughput, patient care risks, patient outcomes and energy consumption. This preamble may be a familiar story; however its impact on your approach to deliver a capital project may not yet be as clear. The fact is much like medicine; today's capital project requires the involvement of specialists to truly improve outcomes by reducing waste in the delivery process and leveraging operations for positive margin contribution upon completion. Understanding the evolution of the Specialty Consultant offerings and options for utilizing Specialty Consultants can be the key to unlocking the true value in your capital project delivery process.
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Capital Project Solutions – January 2013 Specialty Consultant Evolution While you can find specialists for everything from heli-pads to artwork, for purposes of this article we want to focus on the following:
Medical Technology Strategy Medical Equipment Planning Technology Planning Operational Process
With this focus, it helps to utilize the capital project delivery process as a framework to discuss the evolution of service as follows:
Strategy
Concept
Launch
Design
Procure
Build
Activate
1985-1990
1990-2000 2000-Present
Evolution of Specialty Consultant Focus Along the Capital Project Delivery Process Mid 1980's to 1990 During this period, the use of Specialty Consultants, such as Low Voltage Designers and Medical Equipment Planners, on larger healthcare projects became more widely accepted. At that time, these consultants operated mostly in the Design Phase and also provided support during the Procure, Build and Activate Phases. Their primary role was to design and coordinate scopes of work that had become 10%-15% of the total cost of average projects and increasingly drove critical path design and construction activities.
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Capital Project Solutions – January 2013 1990 - 2000 During the 1990s, despite their inclusion on many larger projects, we experienced “hand-off� issues between the Medical Equipment Planners and Technology Planners (formerly known as Low Voltage Designers) to the healthcare company's procurement, IT and clinical engineering groups. Examples of these issues were delayed procurement, lack of understanding of system integration and latent coordination that plagued the Build and Activate Phases. The Specialty Consultants responded by offering more robust services to lead the Procure Phase and provide more oversight and management during the Build and Activate Phases. 2000 - Present By 2000, medical equipment and low voltage systems became more integrated in a common technology backbone and the term medical technology increasingly was utilized to describe both. In response, some Specialty Consultants began offering medical equipment and technology planning as an integrated service. As network architecture became more complex and middleware was increasingly required to leverage integration opportunities, a few of the more savvy Specialty Consultants became involved in the Concept and Launch Phases. This shift was welcomed as building design became even more driven by the medical technology systems and these systems began to account for 15%-20% of the total cost of average projects. Separate and apart from this evolution was a growing class of Medical Technology Strategists that were beginning to operate solely in the Strategy and Concept Phases while turning design and implementation over to firms operating in a more traditional Design focused model. Moving toward present day, downward pressure on reimbursement for traditional healthcare services and focus on quality outcomes led healthcare companies to pay more attention to operational process. As a result, a
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Capital Project Solutions – January 2013 growing class of specialists is now available to advise healthcare companies on workflow process redesign in addition to the in-house hospital resources being dedicated to this effort. Many are utilizing LEAN and Six Sigma methodologies in their efforts. With costs of facility infrastructure increasing and reimbursement rates decreasing or focused more on preventive care, the feasibility of building additional square footage is much more difficult to pencil out. Sometimes building may even be avoided altogether by process changes that increase throughput and allow for better use of existing space capacity. Specialty Consultant Options Our trip down memory lane in the previous section provides context for making sense out of the options that exist today. Let's take a deeper look at each of the Specialty Consultants we have chosen to focus on: Medical Technology Strategy What: Today's healthcare companies should have an updated organizational strategy that will likely include medical technology as a tactical element to help achieve overall goals. Medical Technology Strategists assist in defining the hoped for future of this element in a clearly defined, realistic and aspirational manner. Who: Focused Firms, Large Publically Traded Consulting Firms, Medical Equipment Planners, Technology Planners Why: There is nothing worse than launching a project without a clearly defined hoped for future. If Strategy and Concept do not have laser focus prior to Launch, an organization will set itself up for less than optimal outcomes. Be Careful: Do not assume that a specialist who focuses in technological strategic planning can also facilitate implementation or vise versa. A “one firm fits all" approach
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Capital Project Solutions – January 2013 is only of value if that firm has focused competency in the specialty area in which you have a critical gap to be filled.
Medical Equipment Planning What: Medical Equipment Planners assist in needs analysis, inventory and assessment of existing assets, equipment list development, design coordination, procurement and installation. They may also provide healthcare companywide capital level planning support. Who: Focused Firms, Architects, Construction Managers, Technology Planners Why: Medical Equipment is typically the second largest single budget line item after construction in a project budget. If that is not enough, it also drives much of the infrastructure needs and therefore, timely and accurate information on equipment choices can minimize design rework and costly change orders that create waste. Be Careful: Resist the urge to decline any assistance upon face value. Instead, conduct a gap analysis to determine the internal resources available to perform such work. Be sure to account for the time that these internal resources currently spend doing their “day job”. Match this up with the areas that have the most impact on critical path and determine your best value equation. This will in turn help to develop a solid scope and target the firm that is right for you. It could be as simple as the development of an equipment list and specifications or as broad as full services. Technology Planning What: Technology Planners assist in defining needs, design, coordination, integration, procurement and implementation for all technology systems both passive (infrastructure) and active (components).
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Capital Project Solutions – January 2013 Who: Focused Firms, Engineers, Architects
Medical
Equipment
Planners,
Why: Technology is often the third, and sometimes even the second, largest budget line item behind medical equipment and construction in the total project budget. It is absolutely critical to get this right in order to leverage operational workflow, patient experience and reimbursement documentation capabilities. Be Careful: Despite increasing skills of healthcare organization’s IT staff, they do not necessarily understand how to integrate into the project delivery process. Also, it is highly unlikely they have the time to provide the level of detail and involvement that is necessary. If considering a consulting firm, avoid one that refers to this scope of work as “low voltage design” as there is likely a significant disconnect and thus may not be the ideal firm to provide this service. Operational Process What: Operational Process Consultants assess current state operations and recommend options for reengineering in order to gain efficiencies and improve effectiveness. Their services may be utilized in conjunction with a capital project or better yet absent of one. They may assist healthcare organizations in developing internal team(s) to focus on continuous improvement. Who: Focused Firms, Large Publically Traded Consulting Firms, Architects Why: The shift towards value based healthcare has dictated a heightened focus in this area. Low hanging fruit has been picked off the cost reduction tree and thus organizations are now turning toward operational processes to identify savings and ensure quality to meet future reimbursement models. Therefore, any new capital project should be, in large part, defined by operational processes from the onset.
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Capital Project Solutions – January 2013 Be Careful: Many in-house groups, as well as outside firms, that are well versed in process improvement are less than knowledgeable when it comes to effectively integrating into the capital project delivery process. Prior to engaging an external consultant, evaluate your internal resources to determine their capabilities and qualifications in providing reorganizational process focused on a capital project. If after all due diligence you decide to look externally be sure to contract with a firm that has demonstrated experience in implementing process reengineering in conjunction with a facility project. Keys to Unlocking Value Understanding the evolution and options for the Specialty Consultants profiled provides better context in the search for keys to unlocking true value. Some of the keys are:
Understand the requirement to align content of focus in today's healthcare capital project delivery process with increasing reliance on medical technology and value based healthcare delivery models. Avoid the automatic "we can handle this internally" mentality. Conduct a methodical gap analysis to evaluate reality. Does your internal staff truly have the knowledge, skills and most importantly the time to dedicate to the particular service needed? If the answer is no, you will be better equipped, post gap analysis, to develop a clear scope of work for a Specialty Consultant. For those areas capable of being handled in house, develop clear scopes of work with input from your Project Delivery Team in order to deliver as expected and required. If you chose to do the work of a Specialty Consultant internally, approach it as if the designated person(s) is a consultant and be sure to hold them accountable. Develop a medical technology strategy that is rooted in the overall organization strategy prior to moving to Launch and certainly well before moving to Design.
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Capital Project Solutions – January 2013
Do not assume building additional space will relieve your operational challenges. Begin by assessing current state workflow and look for options to improve without a costly building program. The investment in this effort will be minimal compared to building additional square footage that is not truly needed. Do not fall for the “one firm fits all” scenario. Carefully evaluate and choose firms based on their competencies, capabilities and focus areas that are aligned with your needs.
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