Part of a Broader Organizational Strategy

Development strategies focus on expanding and optimizing an organization’s geographical footprint, all while minimizing facility overlap and eliminating inefficiencies across its delivery network. However, footprint optimization can become complex when expansion happens through mergers or acquisitions with physician groups and larger organizations.

“When healthcare systems merge, an organization might end up with redundant facilities serving similar functions in the same community,” says Julie Crawford, market executive at Mortenson. “In these cases, they need to analyze each piece of real estate and determine the best way to optimize their presence in the community. The solution often involves reimagining one or more facilities to serve a different purpose.”

Footprint Optimization in Aging Healthcare Infrastructures

On top of having duplicate facilities, organizations often end up with older, outdated facilities in their portfolio. With capital improvements being a major investment, deciding whether to invest in facility renovation brings up these critical questions:

• How old is the facility?
• Where is it located and what are the current and projected demographics?
• What is the volume of patients flowing in and out? Is the facility performing or underperforming?
• Does the facility fit into the organization’s plans for telehealth and digitization?
• What services will be offered at the facility?

“Sometimes it’s worth investing in aging infrastructures, especially when the location serves the needs of a system’s delivery network and its target community,” says Julie. “But first you need to determine what it will take to update the building. Does major equipment and infrastructure need replacement? Are the plumbing and electrical in good condition and up to code? These and other factors determine the feasibility and cost of doing a renovation.”

Even with these considerations, repurposing an aging structure can be highly beneficial in optimizing primary care footprints.  

Tri-County Health Care’s 90-year-old-building in Wadena, MN was outdated and unable to serve the changing needs of the surrounding community. Updating the 120,000-square-foot building includes building new surgery suites, areas for obstetrics and postpartum care, and an emergency department with intensive care. An on-site pharmacy and retail center and rehabilitation facilities offer patients convenience. Additionally, the project includes improved care team efficiencies and respite areas for staff with plenty of natural light.

Optimizing existing structures doesn’t have to be an “all at once job.” Healthcare systems can prioritize projects based on their budget and current organization and community needs.  

An example of this approach is Fairview’s plan to reimagine the former St. Joseph’s hospital campus in St. Paul, MN. Services are being consolidated to the newest building on campus to meet the needs of this diverse community locally, together with community partners, and focused on the social determinants of health which affect a person’s overall wellness. With the first phase turned over, and the Health & Wellness Hub now operational to serve the most urgent needs, Mortenson continues to partner with Fairview to envision future phases and expand services at this location.

‘Right-Sizing’ Healthcare Footprints to Serve Current and Future Needs

During a recent healthcare panel , industry experts discussed how healthcare space programs are typically 10-15% bigger than they need to be, forcing them to think differently about space utilization. Because of this, organizations need to ask challenging questions up-front to ‘right-size’ their project. So, how much space does a program need for staff and to meet its care delivery objectives?

“It depends on several factors,” says Chantily Malibago, director of real estate development at Mortenson. “The shift to remote work during the pandemic opened up a lot of real estate in healthcare systems. With organizations deciding to keep certain staff remote permanently, they need to repurpose spaces in a way that makes the most sense for their programs and ROI.” 

Staff workspaces don’t generate revenue. So, turning unused square footage into patient care areas can be a good investment. Of course, you need to create the right type of space based on the services provided and the demographic you’re serving.

For example, facilities planning to serve an older population might consider larger exam rooms that provide space for adult children to participate in exams and care discussions. Equipping rooms for digital integration allows virtual participation from caregivers unable to attend visits in person.

The past few years have also demonstrated the importance of adaptability. When redesigning spaces, standardizing layouts and/or using modular components can help organizations future-proof existing healthcare facilities. “Standardizing layouts enables an efficient model of care delivery, along with the flexibility to adapt space and programming as the demographics and community needs change,” says Chantily. “A standardized layout also makes it easier to implement new technology and accommodate different providers without having to continuously rebuild and customize space, which is costly.”

Preparing Existing Spaces for Telehealth and Digitization

Technology plays a significant role in expanding healthcare access. In a 2021 survey conducted by Mortenson, 49% of respondents said telehealth would have a positive impact on their facility footprints. Additionally, 58% said telehealth is receiving “much more” attention now than it was pre-pandemic.  

“The digitization of healthcare is happening in real-time, and the pandemic accelerated how we’re thinking about it,” says Chantily. “Organizations don’t always have the opportunity to build new, modernized buildings or expand into new areas. So sometimes, the only option is retrofitting existing facilities to accommodate digital technology.” 

In ambulatory care facilities, options include redesigning check-in areas to house self-serve kiosks instead of staffed registration desks. Another option is outfitting unused offices with teleconferencing equipment to provide private space for physicians to conduct telehealth visits.

Of course, integrating telehealth capabilities takes careful planning. Aside from equipment, organizations must consider network installation and performance early in the design stage, especially in older facilities.

Having a Construction Partner That Helps You Get the Most Value

Footprint optimization focuses on determining what delivers the most value, not only monetarily but in how spaces serve the community. After a healthcare organization determines its programmatic needs, they need a trusted partner to help them weigh the pros and cons of renovating an older, existing facility versus building something new.

 “Anyone can provide an estimate of what it costs to remodel an inpatient unit in an aging facility, but they might be missing critical cost factors,” says Julie. “We at Mortenson think beyond the floor plan and look at the entire infrastructure to identify critical factors affecting the design and budget. From there, we guide clients in making the best decision to meet their healthcare delivery goals and get the best ROI.”