By Grant Geiger / Special to Healthcare Facilities Today

Healthcare has changed dramatically in the past 100 years but the physical infrastructure supporting healthcare has not. Year after year the healthcare industry is asked to lead society towards the next breakthrough. From advances in medicine, robotic surgery, gene therapy and beyond, healthcare has continued to find ways to improve life.

Despite these advances, the industry has relied on physical infrastructure and construction practices that have not innovated in 50 years. With prefabrication and modular manufacturing, healthcare will embark on to the next chapter in innovation – world-class facilities and smart patient rooms that will help improve outcomes and improve the patient experience.

What’s arresting hospital construction development?

Key drivers for the the lack of infrastructure improvements in healthcare are the high cost of construction, the scarcity of skilled workers and the duration of the project until completion and the current payor, reimbursement model. With current healthcare construction projects averaging over four years, by the time a new facility is built there is a good chance that it is already out of date. Modular manufacturing can solve this problem and allow for a fast, low-cost, and scalable solution that is of a higher quality than traditional construction. 

Modular pre-fabrication is not a new concept to the construction industry. Coming from the residential single family sector, modular prefabrication has been utilized for several decades. Now modular design is being successfully used in apartments, homes, and even superstructures like Dubai’s Burj Arab Tower. Modular design not only allows for quicker project timelines and budgetary savings but also helps solve the construction industry’s skilled labor shortage.

Another area where modular is solving problems is in the Los Angeles area where students at USC’s School of Architecture are building temporary, moveable, modular and expandable structures to provide shelter to those less fortunate. This same formula is being used overseas where the Brussels government approved the launch by the Brussels Region Housing Association to supply and install sustainable equipped modular housing. This will allow for the acceleration of the renovation of housing stock.

As our population continues to age and our younger generations demand more of a hospitality-based, personalized healthcare experience, health providers are being forced to revisit the care delivery model. 10,000 individuals turn 65 every day in the US and by 2020 the baby boomer generation will reach 75 years of age and demand even more resources from our already strained healthcare system. As baby boomers enter the period in which they will require the most care, they will demand the best in patient experience and for the first time the reimbursement to the healthcare provider is directly tied to the patient's experience and outcome. 

Hospitals and health systems are seeking to meet patients in the setting they prefer, with providers they prefer. This patient convenience model is causing a ripple effect across the country. We are seeing less of the 500+ bed hospitals and more outpatient, urgent care facilities or even micro hospitals. Despite the smaller profile of these new facilities they are still quite costly at a national average of over $400 a sqft.

Building a scalable, cost-efficient solution for hospital facility construction 

Prefabricated construction has been on the rise for years and successfully used in hospital construction in 2014 at the Saint Joseph Hospital in Denver, Colorado. This hospital was able to use prefabricated elements in the construction of their new hospital which cut 72 working days off the construction schedule which resulted in $4.3 million savings. This is a real life example of the time and cost savings by just applying prefabrication to a fraction of the overall build. Imagine doing this for the entire building? 

Aside from allowing a project to be completed faster, prefabricated units off-site can also improve the safety of the job site by decreasing the number of skilled trades who need to be onsite at any one time, and providing a controlled environment. 

The controlled environment is another advantage that modular design and prefabricated construction can bring to this industry. One of the most common offenders delaying construction is weather. By building as much as possible in an off-site, climate-controlled, quality driven environment the delay time is reduced exponentially. Finally, taking best practices from industrial manufacturing another exciting benefit to prefabrication is the ability to implement Six Sigma lean manufacturing best practices. Six Sigma is a quality control program that is defined as a limit of 3.4 defects per one million products or services inspected, where anything not acceptable to the end customer is considered a defect. The key to the healthcare industry is that the majority of inspections will be completed in the factory and identified upfront which allows for adjustments to being made on the front end of the construction lifecycle as opposed to the finished product thus saving time and money. Today standard construction operates below six sigma which results in more delays, mistakes, and higher cost.

Not if, but when

The modular design and prefabricated manufacturing concept has the data to back up the claims. Studies from as early as 2015 show huge time and money savings; 45% time savings; 16% cost savings and a 30% increase in productivity – back up the updated cost and time stats. As construction times are shorted, ROI increases. Researchers found that a 25% cut in construction schedule yielded an average savings of $5.81 per square foot. For schedules cut by 50%, savings increased to $10.93 per square foot. 

It is not a question as to if the modular design can help save the healthcare industry, modular design needs to save the healthcare industry. When trying to efficiently use their budget dollars most healthcare executives overlook the construction cost as they assume they are a fixed cost. Modular design and prefabricated construction has the data to show otherwise. If we can educate and continue to show that healthcare prefabrication is not a fixed cost imagine the possibilities for the healthcare of tomorrow. Whether it is getting a new facility up and running in half the time to serve a new patient population, saving a quarter of the initial cost that can be reallocated to purchasing state of the art equipment, or generating revenue for the facility years before you ever expected. The possibilities are endless and the future of the healthcare industry looks brighter and brighter every day. 

 Grant Geiger is CEO of EIR Healthcare.