L’Ospedale Nel Terzo Millenio

Major Investment Major Investment Planning Planning for the Hospital Sectorfor the Hospital Sector

Barrie DowdeswellBarrie DowdeswellEuropean Health Property European Health Property NetworkNetwork

The agenda

Three themes

• European perspectives on capital investment

• Trends in hospital investment

• The changing role of the hospital in a regional health setting

Context - Regional devolution is now the principal tool of reform in healthcare throughout Europe

European perspectives - as we enter the third millennium – investment priorities• Most countries have not been replacing outdated hospitals quickly enough - but replacement will now be very different

• Governments are reconsidering the historical focus on acute hospitals for healthcare

• There is increasing emphasis on alternative capital investments in local communities– Chronic care– Aged care– Mental health– Public health– Local community diagnosis

Needs between 8% and 12% of total health spend p.a.

European perspectives – money supply• State ‘capital’ money is in decline

• Increasing dependency on ‘private & commercial money’

• All loans for capital will need to be financed out of hospital income - which will be dependent on payment by results

• Capital investment is now moving into the risk category – and banks have much tougher borrowing standards

• Hospitals will need to adopt business standards for capital management

European perspectives - capital and population healthA strong sustained trend towards some form of regional structural planning / regulation

• Responsiveness to the changing needs and values of citizens - giving people a say in local priorities

• Using disease management (care) programmes to plan and implement change

• Using new technologies to make care more widely available

• Applying these techniques to rationalise services and health infrastructure

Many governments are moving from being providers to regulators of healthcare

Population Health - Sustainability

“shifting health systems away from the current emphasis on acute care towards improved chronic and long-term care, in response to the transitions generated by epidemiological and demographic changes, will be essential in sustaining a balance between affordability and the

principle of universal access”

Alexandre Kalache, World Health Organisation

Netherlands Presidency – ‘Shaping the EU Health Community’ September 2004

The third age (transition) in healthcare

HospitalHospital

Morbidity Compression

Co-Morbidities

Care

Public Health- 1950

Acute Care1950 -2005

Chronic Illness 2005 -

AgedCare2010 -

Diversity

Re-emergence &revitalisation

Community,

Lifestyle

Hospitals

Patterns of change – Patterns of change – delivering delivering the new hospital agendathe new hospital agenda

Three distinct models

• The centralist (national or regional government) structure planning systems – Northern Ireland– Skane Region Sweden– Tuscany

• The free markets – largely insurance fund based– Netherlands– Slovakia

• Artificial markets – English NHS– Germany – the privatisation of public hospitals

There seems to be a strong trend towards free market principles for hospital provision

Many governments are making it easy for new specialist operators to challenge public hospitals

Best in class new hospital models – service led emphasis• Hospital design based on care models –

care pathways – to improve the relationship between the workforce and the working environment

• Effective clinical governance – clinical outcome and safety audit to reinforce pathways

• A strong integrated quality ethos - including high level focus on new threats e.g. opportunistic infectious disease

• A premium paid for designs that– Are adaptable– Enhance workforce effectiveness and safety

– Create a healing environment– Maximise the potential of new technology

This will create new challenges for safety and complex engineering technology

Best in class – business emphasis

• Risk management of capital investment– Ability to service capital debt

– Ability to meet and finance changing need – over ever shorter timescales

– Workforce responsiveness to change

• Capital financing models that provide long-term flexibility

• Leading examples – service and business effectiveness

• Sittard Netherlands• St Olav Norway• Hospital la Ribera Spain

• Rhon Klinikum Germany• Coxa Finland•Northern Ireland• ITALY – you may decide

Example - Service led-design

Technologyphase

Level 1 care

Level 2 care

Rehabilitation Ambulatoryfollow up

Progressive (care pathway) patient care

Multi-disciplinary Team working

Rhone KlinikumAverage public hospital cost per case - Euro 3,870Average RK hospital cost per case - Euro 2,660

Public hospital capital element E 270

RK hospital capital element E 722

Example - Service-led adaptability

DigitalPortal(community)

Technologyphase

Level 1Level 2 Rehabilitation

Digital follow up

External hospital networks

• Utilising technology to manage care transitions• Widening the scope of care pathways

DigitalisedInformation Transfer systems

Technology transferto other settings

‘Agile space’

R.K. completely refurbishall company hospitals on a 10 year cycle – technology according to return on investment, based on Quality & Cost Effectiveness

Care pathways - European evidence• A care pathway is an evidence based

prediction of the treatment plan for patients with similar diagnosis – it provides a focal point for the planning and allocation of resources, measuring effectiveness and auditing outcomes – it is also a risk management tool EuHPN EU 17 Country Survey –

There will be a rapid and significant growth in patients treated within care pathway-based protocols – an increase from 5% to 60% within 5 years

Despite the clinical, quality and planning benefits there is little evidence that capital planners / designers understand or use care pathway models in State health systems

The twin aims –

• Hospital design and operational effectiveness improved by internal treatment (care) pathways

• Contributing to population based integrated disease management pathways.

Some observed effects of cost-led capital concepts for new hospitals

• Hybrid capital models

• Tendency towards standardised (low cost) benchmarks resulting in poor design (there are some exceptions)

• Appears to inhibit the effectiveness of the crucial triangle of - workforce - work systems – design

• Underinvestment in technology

• Project decisions are often remote from the workplace

• Cost pressure is weakening commercial interest

In the 1970,s the built environment represented 75% of project cost

Today technology represents 75% of project cost

Capital models and effectiveness

Models

PPPWorkforce shares

PPPPublic shares

IndependentNot for Profit

PPPConventional

Public Procurement

PFI

Sustainable lifecycle effectiveness clinical and utility

Dominant influence oneffectiveness

• Scale of care pathwaybased planning

• Degree of clinical workforceengagement

• Supportive capital funding models

low high

*

*

*

*

*

*

preliminary EuHPN survey hypothesis

Co-relation to Hospital Infection Rates ?

Example – design and hospital infection risk, survey of new hospital projects

Single room ratios – confidence parameter between 50% and 100% ref. EuHPN international ‘expert report’

• Service led models – achievement well above minimum standard

• Cost-led models – almost all fell well short of confidence parameters

Some countries e.gFrance, Finland, Italy already have a strong cultural disposition to ‘privacy and family rooms’

Capital investment in the future is about – risk management

• Clinical risk – changes in technology and models of care

• Workforce risk – availability, change management

• Demand risk – markets, consumerism and healthcare transitions e.g. chronic care

• Political risk – policy shifts, public opinion

• Financial risk – debt servicing and capitalisation

Implicit is health and safety risk

There will be a new and sustained focus on cost benefit analysis

Risk management and Design

The key is the adaptable hospital and its place in society

• Elasticity – demand volatility

• Functionality – changes in service type

• Sustainability – lifecycle economic value

• Transferability - technology platforms for knowledge and treatment exchange

• High value sustainable design impact

The future effective lifespan of most modern hospitals will be around 10 years

Refurbishment and adaptation may be the new growth area for capital

Regional structural planning

Why we need structure plans

• Healthcare is not a commodity it is a fundamental societal value and right

• There is a continuing need to ensure equality and accessibility across populations

• There needs to be controlled management of policy shifts e.g.– Transferring more care into local community settings

– more progress on hospital rationalisation and role delineation – this should not be a provider led exercise

• Maximising the benefits of scarce resources

Pooling and sharing resources within economic population groupings is the best way of avoiding cost-led damage to hospital investment

The evidence for structural change in acute hospitals is compelling

• 8% of average daily acute bed usage can be saved by better primary care / hospital integration

• 10% can be saved by concentrating specialist expertise e.g. hip replacement

• 15% to 20% can be saved by providing better chronic illness support in the community

• On average there are between 5% and 15% of patients awaiting discharge because there are inadequate community facilities

This evidence points to a continuing decline in acute hospital beds

This does not take account of the long-term benefits of knowledge transfer and new public health investment – the health campus resource

Most of these inefficiencies will be overcome as integrated care pathways are introduced

There are plenty of integrated structure models – changing the psychology of care

Population size1 1 million

E health

Home support

Communityresource centres

Polyclinics

Specialist centres

Community hospitals

Regionalknowledgecentres ICT based

technology, information and knowledge pathways

Technology basedequality of care for all citizens

The benefits of the best centres of excellence – delivered locally

We need structural coherence

Hospital free for all Structural frameworks

Cataracts

Hips

Coreservices

Chronic care

Marketscontestable choice ‘tariff’ based contractsAcute networks

OR

Making the capital system work better

balance and equity

Structural planning systems and frameworks

Capital financing andprocurement models

Work processbased hospitalplanning and design

A need for strong synergies between the systems, and mutual confidence and accountability between the agencies

Note:

•Most countries have one dimension

•Some countries get two out of three right

•Few countries match three out of three

The issues -

• balancing hospital autonomy and efficiency

• and incentivised regional frameworks

Conclusion - Investing in societal capital

“Strategic capital asset planning and investment maximizes the performance of fixed, physical or capital assets that have a direct and significant impact on achieving corporate objectives. Companies and organizations depend on vital assets to drive their business; however, they often see them as individual, stand-alone objects operating independently. In reality, companies are a collection of strategic assets that exist as a single system.”

Harvard Business School - capital investment symposium, 2003

Health, the State and the economy

HEALTH

geneticslifestyle

education

healthcare

wealth

other socio-economicfactors

environment

productivity

labour supply

education

capitalformation

ECONOMICOUTCOMES

McKee et al LSHTM

Grazie per la vostra attenzione

barriedowdeswell@aol.com

www.euhpn.org