9/20/2010 · 9/20/2010 1 return on design – what are your metrics? 2010 healthcare facilities...

9/20/2010

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Return on Design –What are your Metrics?

2010 Healthcare Facilities Symposium & ExpoSymposium & Expo.

Navy Pier Chicago

Thursday, September 16th, 2010 | 9:15 am – 10:15 am

p l u n k e t t r a y s i c h a r c h i t e c t s | b o t t o m l i n e m a r k e t i n g & p u b l i c r e l a t i o n s | l a n c a s t e r p o l l a r d & c o | b a k e r t i l l y

Presenters

Michael Scherbel, AIA, NCARB

Partner

Plunkett Raysich Architects

• Established in 1935

• 80 person architectural and interior design firm

• Offices in Milwaukee and Madison, WI

• Designed over 2,000 healthcare facilities

Tanya Hahn, CPA, MBA

Senior Vice President

Lancaster Pollard & Co.


• 75 person financial advisory and investment banking firm

• Offices in California, Colorado, Ohio, Kansas, New York, Georgia and Texas

• Financed more than 1,000 projects for clients

Jeffrey Remsik

President

Bottom Line Marketing & PR


• 10 person marketing communications and PR firm

• Office in Milwaukee, WI

• Assisted over 125 clients

Tony Ollmann, CCA, CCP

Director

Baker Tilly


• 1,350 person accounting and advisory firm

• Offices in Illinois, Michigan, Minnesota, Virginia, and Wisconsin

• Assisted over 10,000 clients

Agenda

1. Forces Driving Healthcare

Today

2. Metrics Defined

3. Project Work Plan

4. Access to Capital

5. Community Engagement

6. Facility Operations

7. Implementation

8. Q&A

Learning Objectives

1. Articulate and understanding of the synergy between capital, operations, environment and loyalty within a healthcare capital project.

2. Establish and validate the connection of asset alignment to improve the care processes, patient experiences, staff retention and facility design.retention and facility design.

3. Delineate effective strategies, model and tools for sustainable Return in Investment, Return in operations, Return of Design and Return on Loyalty.

4. Demonstrate an understanding of smart team integration with the value-based design methodology.

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Forces Driving Healthcare

Evidence-based Medicine

Evidence-based Design

Access to Capital

Integrated Delivery

Resource Maximization Resource Maximization

Operational Efficiency

Payment Reform

Technology

Loyalty

Metrics Defined

Tony OllmannCCA, CCP

Implementation

Michael ScherbelAIA, NCARBFacility Operations

INNOVATION METRICS EXPERTS

Jeff Remsik

Community Engagement

Tanya HahnCPA, MBA

Access to Capital

Metrics Defined

6” equals $90,000 90% above proforma

6 months 24 unitsMin. liquidity - 90 days cash

Project Controls = 3% 89% Consumer Preference

MEASURABLE RESULTS

10 minutes equals $47,600 15,400 ft. equals 1hr.

1% interest rate = $2.5 million of debt capacity

Value Added Engineering = 10%

•Construction Process Improvement = 35%

96% Customer Satisfaction

7-0 Plan Commission Approval

Project Work Plan

Yesterday: Old World Sequential Processing

ProjectStart

ProjectEnd

What skills & tools are needed to do this work?

Today: New World Parallel Processing

Copyright © 2010 Plunkett Raysich Architects. All Rights Reserved

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Project Work Plan

Yesterday

Today

Copyright © 2010 Plunkett Raysich Architects. All Rights Reserved

What skills & tools are needed to do this work?

Single-disciplineTeamwork

Alone-work Cross-disciplineTeamwork

Access to Capital

1. Market influences on industry

2. Credit criteria

3. Interest rate environment

4. Influences on financing

1% interest rate = $2.5 million of debt capacity

Min. liquidity - 90 days cash

Access to Capital

Focus onCore

Operations

ChangeB i

Stock Market

PersonalInsurance

InServiceDelivery

NationalHealthcare

Debate ConstructionCosts

State BudgetImplications

BorrowingAvailabilityMarket Influences

Access to Capital

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Access to Capital

Source: Bloomberg

Access to Capital

Profitability

Do You Have

Positive Margins?

Yes No

LiquidityWhat is

Your Cash Position?

Need to Focus on

Operations

Enough Short

DebtToo Much Debt Now?

Need to Build Cash Reserves

No Yes

What Options

are Available

Focus on Reducing

Debt

Access to Capital

InvestorAppetite

Project

Collateral

FinancingStructure

Competition Interest Rate

CreditProfile

OptimalFinancing

Access to Capital

BorrowerOptions

UnratedUnenhanced

RatedEnhanced

RatedUnenhanced

Variable Rate Letter of Credit

Bond Insurance

AgencyFixed Rate

Fixed RateVariable Rate

May Swap Desired % to Fixed Rate

Direct Placement Fixed Rate

May Swap Desired % to Fixed Rate

Government owned entities can use BABs through 2010 with all of these options

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Debt Capacity Constraints

$25 000 000

$27,000,000

$29,000,000

$31,000,000

$33,000,000

$35,000,000

$15,000,000

$17,000,000

$19,000,000

$21,000,000

$23,000,000

$25,000,000

1.25 1.50 1.75 2.00

5% 6% 7%

Assumes $3,039,000 cash flow available for debt service, 25 years


Overview

Public decisions typically the domain of:• Interest groups• Specialized experts

Public leaders rely on expertsPublic leaders rely on experts Logic of this approach is clear

Most organized/influential usually win


Best Practice Model

• Traditional View

• Citizens

• Public

• Newer View

• Citizens/Public

• Invited to dialogue

• Provide tools to do so

effectively


Best Practice Model

Key Elements of Effective Engagement:

1. Begin by listening

2 Attend to people’s leading 2. Attend to people s leading concerns

3. Reach beyond the usual suspects

4. Frame the issues for deliberation

5. Provide right type of information, in the right amounts at the right time

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Best Practice Model

Key Elements of Engagement

6. Move beyond wishful thinking

7. Expect obstacles and resistance

8. Create multiple/varied chances for dialogue

9. Respond thoughtfully and conscientiously

10.Build capacity


Best Practice Model

Authentic/skillful engagement

improves outcomes:

• Multiple points of view

Creates sense of shared• Creates sense of shared

responsibility

• Foster new allies

• Stimulates broader awareness


INFORM CONSULT INVOLVE COLLABORATE EMPOWER

PUBLIC PARTICIPATION GOAL: PUBLIC PARTICIPATION GOAL: PUBLIC PARTICIPATION GOAL: PUBLIC PARTICIPATION GOAL: PUBLIC PARTICIPATION GOAL:

Provide stakeholders and the broader public with balanced and objective information to assist them in understanding the issues, alternatives and/or solutions.

Obtain feedback from stakeholders and the broader public on analysis, alternatives and/or decisions.

Work directly with stakeholders and the broader public throughout the process to ensure that their issues and concerns are consistently understood and considered.

Partner with stakeholders and the broader public in the decision, including the alternatives and identification of the preferred solution.

Place the final decision-making in the hands of the stakeholders.

PROMISE TO THE PUBLIC: PROMISE TO THE PUBLIC: PROMISE TO THE PUBLIC: PROMISE TO THE PUBLIC: PROMISE TO THE PUBLIC:

We will keep you informed. We will keep you informed, listen to and acknowledge concerns and provide feedback on how your input influenced the decision.

We will work with you to ensure that your concerns and issues are reflected in the alternatives developed and provide feedback on how your input influenced the decision.

We will look to you for advice and innovation in helping to formulate solutions and incorporate your advice into the decisions to the maximum extent possible.

We will implement what we have decided together.

EXAMPLE TOOLS: EXAMPLE TOOLS: EXAMPLE TOOLS: EXAMPLE TOOLS: EXAMPLE TOOLS:

Fact sheetsWeb sitesPublicationsOpen houses

Focus groupsSurveysPublic meetings

WorkshopsVisioning processIssue polling

Advisory committeesConsensus building

Delegated decisions


Depth of Community

Trust

Community Engagement Metrics

96% Customer Satisfaction 89% Consumer Preference

Consumer Brand

Preference

Volumes, Outcomes

and Margins

7-0 Plan Commission Approval

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Summary

Broad-based engagement not

possible/appropriate for every

decision

i i f h h Variations of the theme to

meet local needs

Important for decisions whose

success depends on support of

many stakeholders

Vision Lead

Vision – we are limited not by our abilities, but by our vision

Context Specific

It starts with a vision

Efficiency

Added Value

Excellence

Client’s Mission | Healthcare System’s are committed to living out the healing environment by providing exceptional and compassionate health care that promotes the dignity and well being of the people we serve.

Respect

Integrity

Patient , Staff, Community Satisfaction

Evidence Based Design

Our Vision | Our system will be recognized in the communities we serve for superior

and compassionate patient service, clinical excellence, as the health care employer of choice and f f

Development

Excellence

Stewardship

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317% above proforma

768 scans vs. 184 proforma

NORTHPOINTE

Facility OperationsNEUROSCIENCE

13 minutes to 35 seconds

6” equals $90,000

Facility OperationsMERITER ENDOSCOPY

10 minutes equals $47,600

Facility OperationsHO CHUNK CLINIC

15,400 ft. equals 1hr.

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Implementation

Seven Types of Waste

Types of WasteOverproduction Producing more, sooner and faster,

than requiredWaiting / Watching Operator or machine idle time

Transport Any unnecessary movement of materials

Extra Processing Extra operations due to re-work, reprocessing, handling, etc.

Inventory Excess materials that are not directly required

Motion Extra steps taken by people and equipment

Defects Outputs that do not conform to customer specifications

Implementation

Waste Reduction

Waiting and Watching

Extra ProcessingMotion Non-Value

Activities

Some Forms of Waste

Decrease Decrease Decrease Decrease

•Resource Planning

•Time Allocation

•High Quality 1st Time

•Fool Proofing

•Layout Organization

•Visual Management

•Value Stream Mapping

•Project Planning

Increased Productivity

Implementation

Construction Risk Assumed by Owners:

Design failure

Structural failure

Scope creep

Completion delays

Organizational behavior

Financial Scope creep

Budget overruns

Cost inflation

Financial

Policy compliance

The unknown…

Implementation

The 5 S’s

Sort

Sort out what is needed and what is not needed.When in doubt, throw it out

Arrange essential things in order for easy access

Make the 5 S’s a way of life: requires discipline

Sustain Straighten

ScrubStabilize

Keep machines and workareas clean

Make cleaning and checkinga routine practice

5 S

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Implementation

How Does Construction Compare?

Value Added

Waste

SupportActivity

Current Manufacturing Estimates:

Value Added 62%Waste 26%Support Activity 12%

Value Added

Waste

SupportActivity

Current Construction Estimates:

Value Added 10%Waste 57%Support Activity 33%

Source: http://www.agc.org/galleries/default-file/AGC%20Lean%20GM.pdf

Implementation

Construction Sources of Variation

Materials

Material staging

Waiting for work

Hand-offs from one trade to another

Weather Weather

Resource availability

Implementation

Measure and Analyze Schedule

Track percentage of assignments

Act on plan failure

Percent Plan Complete (PPC)

Increasing PPC leads to increased Increasing PPC leads to increased performance

Summary

Today: New World Parallel Processing

Environment

Value Capital

Efficiency

Loyalty

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Innovation

The Future – The best way to predict the future is to create it.

Resources

Michael Scherbel, AIA, NCARB, PartnerPlunkett Raysich [email protected]

Jeffrey Remsik, PresidentBottom Line Marketing & [email protected]

“We are limited, not by our abilities, but by our vision.”

Tanya Hahn, CPA, MBA, Senior Vice PresidentLancaster Pollard & [email protected]

Tony Ollmann, CCA, CCP, DirectorBaker [email protected]

Return on Design – What are your Metrics?

Resources

http://www.hcarefacilities.com/

www.prarch.com

http://www.lancasterpollard.com/site.cfm/Our-Focus/Health-Care-Finance.cfm

http://www.blmpr.com/specialties/insight_3.html

http://www.bakertilly.com/Health-Care

Return on Design –What are your Metrics?

2010 Healthcare Facilities Symposium & ExpoSymposium & Expo.

Navy Pier Chicago

Thursday, September 16th, 2010 | 9:15 am – 10:15 am

p l u n k e t t r a y s i c h a r c h i t e c t s | b o t t o m l i n e m a r k e t i n g & p u b l i c r e l a t i o n s | l a n c a s t e r p o l l a r d & c o | b a k e r t i l l y

9/20/2010 · 9/20/2010 1 return on design – what are your metrics? 2010 healthcare facilities...

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