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•Hospital (Re)Design –
•Driving value through
•strategy based
planning
•Breakout CEO Conference
Paris, April 7, 2011
•CONFIDENTIAL AND PROPRIETARY
•Any use of this material without specific permission of McKinsey & Company is strictly
prohibited
•McKinsey & Company | 0
•Our breakout will cover three aspects of hospital design
•1
•How does your strategy translate into
•Strategy meets designthe design of your hospital?
•2
•How to ensure best-practice concepts
•Design meets conceptmeet design principles?
•3
•
owoftohospital
avoid common
pitfalls in
•Concept meets executionexecution
construction?
•
H
•
•McKinsey & Company | 5
•1 Strategy meets design – what is the main driver of new design based
•on your strategy?
•Technology
•Qualit
y
•Experience
•Efficiency
•Questions to
consider
• ▪ What are
potential tradeoffs?
• ▪ What is the
right level of
•investment in
•each dimension?
• ▪ What is a
feasible
positioning given
current situation,
capabilities and
•resources?
•McKinsey & Company | 5
•1Strategy to be efficient – assess inter-department needs
•when defining hospital configuration and flows
•EXAMPLE
•
•Patient flows between departments
•Strength in relationship
•Cluster
•CANCE
•DermR
a
•PEDIATRICS
 Analyse
patient flows
 Derive
clusters in
hospital from
multidisciplinary
cooperation
 Use this as
input for
thehospital
design
•Su
r
•Derm
a
•CARDIVASCULAR
•Hem
o
•Ra
d
•Cardi
o
•Ra
d
•Ey
e
•EN
T
•Hearin
g
•Ra
d
•NEUR
O
•Ra
d
•McKinsey & Company | 5
•1 Based on the intensity of patient interdependencies,
•an efficient, modular layout can be designed
•Directly accessible center for
patients to get scheduled
ambu-latory or follow-up
treatment
•Outpatient Center (incl.
community/family medicine,
polyclinics, day clinic and
ambulatory surgery)
•Pediatric
s
•Specialized centers for
complex
treatment
•Heart and
Lung Center
•Abdomina
l
Center
•ICU
1
•Diagnostic
s
and
Therapy
IMU2
•Head and
Nervous
System Center
•Other
centers
•Other
ambulatory
treatments
•Cancer
Center
•Emergency
department
•Directly
accessi•ble
ambulatory
center with
triage function
for immediate
treat-ment of
patients with
non-fatal
diseases
•Fast access
to integrated
emergency
care
•Shared services for diagnostics and (high) intensive
care
•McKinsey & Company | 5
•1 How does your strategy translate into the design of
•your hospital?
•FOR DISCUSSION
• ▪ What overarching strategic decisions will
impact the design of the hospital, and how?
• ▪ Which of the elements – Technology, Quality,
Patient experience and Efficiency – is most
important for you when translating strategy
into the design of your hospital?
• ▪ What role do clinicians and nurses play in the
planning phase?
• ▪ How to ensure radical rather than incremental
improvements across dimensions?
•McKinsey & Company | 5
•Our breakout will cover three aspects of hospital design
•1
•How does your strategy translate
•Strategy meets design into the design of your hospital?
•2
•Design meets concept How to ensure best-practice
•concepts meet design principles?
•3
•How to avoid common pitfalls in
•Concept meets execution execution of hospital construction?
•
•McKinsey
7
•McKinsey&&Company
Company | 6
•2 Design meets concept – three key dimensions need
•to be considered when designing hospital concept
•Key dimensions
•Flexibilit
y
•How flexible is the hospital
design to constantly
changing requirements?
•Functionality
•What is the operational
setup of the hospital in
light of future demand?
•Patient experience
•Which patients does this
hospital serve and how does it
do it?
•McKinsey & Company | 7
•2 •Flexibility – Options to address at the macro-level
•EXAMPLE
•Floors are designed flexibly to host one to three
specialty wards depending on demand
•Flexible walls can be put up to
create three separate wards
•A floor can work
as one big ward
•3
•1
•2
•Floor can be separated
into two wards
•How do you address
flexibility?
•What is your experience?
•All inpatient ward beds have a pull-down
bed next to them so that parents can
spend the night with their child
•
•SOURCE: Evelina Children's Hospital; Guys & St. Thomas NHS Foundation Trust
•McKinsey
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•2
•EXAMPLE
•Functionality example – open operating rooms
•Separate
ventilation
system
•Four tables
totally open to
each other
facilitating
communication
and allowing
staff sharing
•Patients access OR
from induction
rooms
•Complete
standardization allowing
100% flexibility
•SOURCE: Endoklinik Hamburg
•How do you address functionality?
•What is your experience?
•McKinsey & Company | 9
•2 •Patient experience – first class hotel-like bedrooms
•EXAMPLE
•How do you address
•patient needs/demand?
•What is your experience?
•SOURCE: HIRSLANDEN Clinic Zurich, Circle Bath UK
•McKinsey
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& Company
Company || 190
•2 Patient experience – There is up to 20% margin in the size of
•patient rooms without impacting the quality of the experience
•Layout elements of the new hospital – Bedroom
•Alternative
•being discussed
•Initial drawing
•Wet area
•4.10
m2
•21.0
m2
•$ •Impact on building
costs (CAPEX)
•Shower
basement
•as part of
the floor to
allow for
more
flexibility
•Mirror from
base to top to
create space
•sensation
and
translucent
glass for
natural light
•Door open to corridor for more
space in the room and no conflict
with bathroom door
•$
•Withdrawn entrance for
mini-hall creation and more
hotel like look allowing for
better patient visibility
•Wet area
•4.5
m2
•$
•SOURCE: Client example, McKinsey McKinsey & Company | 1 2
•$
•Slidin
g door
•to
save
space
•17.5
m2
•Wardrobe between
structure-elements
to seize room space
•Windows from
top to bottom to
allow for more
natural light
•2 Design meets concept – focus on reducing the size of non-revenue
•generating areas
•Total area = 150,000 sqm, example space breakdown in early design phase
•Non-revenue generating areas
•50
%
•Top three
areas
•▪ Ward
•▪ Outpatient
▪ OR
•20
%
•Other clinical
areas
•▪ Image
•▪ Day Hospital
▪ ER
•▪ ICU
•10
%
•Support and
staff areas
•▪ Dressers
▪ Teaching
▪ Pharmacy
▪ Etc.
•20
%
•100
%
•Other areas
•Total area
•Every m2 surface saved reduces
building costs by EUR 2,500 and yearly
operating costs by EUR 500 - 1,000
•SOURCE: Client example, McKinsey McKinsey & Company | 1 2
•2
•How to ensure best-practice concepts meet
•design principles?
•Flexibilit
y
•Functionalit
y
•Patient
experience
•How flexible is the
hospital design to
constantly changing
requirements?
•What are the
functionalities of the
hospital in light of
future demand and
own capabilities?
•Which patients
does this hospital
serve (needs and
level of service) and
how does it do it?
•FOR DISCUSSION
•▪ What degree of flexibility
might be desired and
justified?
•▪ How to ensure new
infrastructure enables
maximum operational
efficiency and quality?
•▪ How do the three
elements potentially
balance?
•McKinsey
3
•McKinsey&&Company
Company | 1 4
•Our breakout will cover three aspects of hospital design
•1
•How does your strategy translate
•Strategy meets design into the design of your hospital?
•2
•Design meets concept
•3 •Concept meets
•execution
•How to ensure best-practice concepts
•meet design principles?
•How to avoid common pitfalls in
•execution of hospital construction?
•
•McKinsey & Company | 1 4
•3 Concept meets execution – the sad truth about construction projects:
•they often take longer, deliver less, and cost more than planned
•Schedule delay
Years
•2.
5
•Kuala Lumpur
Airport
•2.
0
•1.
5
•Singapore MRT
Circle Line
•Betuwe Cargo
•Rail Line (B, NL, D)
•1.
0
•0.
5
•Frankfurt-Cologne
High Speed Rail
•Eurotunnel
•0
•0 50 100 150
•Cost overrun
•Percent
•SOURCE: Annual reports; Reuters; Jane’s Airport Review; McKinsey
•McKinsey
•McKinsey
&&
Company
Company
| 1| 15 4
•3 Avoiding pitfalls by addressing key levers will typically decrease total
•project costs by > 20%
•Concept design
•Detailed
design and
engineering
•Purchasing of
materials and
subcontracting
•Construction
•Organizational
and governance
enablers
•Key levers
 Define
concept based
on strategy
 Total-costof
ownership
centered
 Optimized
sub-system
design (e.g., OR,
ward)
 Lean design
•for value and
execution
 Centrally led
cross-functional
category
sourcing
 Proactive
•supply chain
optimization
•5 - 10% of total
construction cost
•10 - 15% of total
spend base (direct
material and subcontractors)
•Cost impact
•10 - 15% of total
construction cost
 Transparen
t planning
and critical
path
management
 Construction
flow balancing
 Cost and
KPI-geared
performance
management
 Site
leadership
capability
enhancement
•10 - 15% of direct
labor and indirect
costs
•(through schedule
compression)
•3 - 5% of total
construction cost
•McKinsey & Company | 1 8
•Summary – hospital design should not start on the architect’s drawing
•table but by defining strategy, sizing and high-level layout
•Master plan areas
•Strategy for new hospital (within 3 months)
 Strategy of the new hospital
 High-level hospital plan
•Operational blueprint (3 - 6 months)
 Detailed layout of the new hospital
 Operational setup
•Execution (~ 2 years)
 Construction and planning execution
 Implementation and transfer plan
•Fine-tuning operations (ongoing)
 Optimising the operations
 Making adjustments to (future) changes
•McKinsey & Company | 1 8
•OU
T
•McKinsey & Company | 1 8
•3 EUR 23 billions were spent in 19 European countries
•on new hospital building
•Cost of newly erected buildings in health care sector, 2008
•United
Kingdom
•Franc
e
•German
y•Netherland
s
•Austri
a
•Ital
y
•Portug
al
•Belgiu
m
•Norwa
y
•Spai
n
•Finlan
d
•Irelan
d
•Polan
d
•Switzerlan
d
•Denmar
k
•Swede
n
•Czech
Republic
•Hungar
y
•Slovaki
a
•Total
•EUR
millions
•7,54
•5,41 7
•2,72 8
1
•1,68
•905
2
•90
0
•50
7
•45
5
•40
2
•39
8
•39
0
•37
8
•37
2
•26
0
•24
4
•14
0
•11
6
•10
5
•Σ
•6
2
23,001
•Per capita
EUR
•8
9
•3
3
•1
5
•4
8
•4
3
•9
•10
3
•11
0
•8
7
•7
4
•1
0
•1
6
•1
1
•1
0
•1
1
•12
5
•9
1
•3
5
•4
5
•SOURCE: Euroconstruct, December 2008; Health Data, OECD; Health for All, WHO
•Additional significant
amounts invested in
refurbishments
• ▪ Target savings of
35% would equate to
Salaries for all medical
professionals in Bulgaria
Total expenditure on
inpatient care in Belarus
Total health care
expenditure of Greece
Total expenditure on
primary prevention and
public health in Germany
OTC expenditure in
France and Germany
together
•
–
•
–
•
–
•
–
•
–
•Ø
51
•McKinsey & Company | 1 9