This paper introduces the concept of actionability in the context of AMC master planning, and discusses its importance as the organizing goal of the plan. Specific examples are cited, and case studies of actionable master plans for seven large AMCs are presented.

AMCs: Current Trends and Future Expectations

Many facilities at academic medical centers across the country are at a critical point in their life cycles. The passage of the Hill-Burton Act in 1946 paved the way for a wave of construction across the country; consequently, many facilities may have surpassed their useful life and are now in need of significant renovation or even replacement. In the clinical area alone, a survey of university medical centers found that half of beds were located in buildings that are more than 20 years old (half of those beds in buildings more than 30 years old).⁽¹⁾

Furthermore, capacity is not keeping up with demand as the population ages, with the number of staffed beds per 100,000 population decreasing dramatically over the past 20 years. Recently, 84 percent of University HealthSystem Consortium members reported that they are currently operating at or near capacity.⁽²⁾ The cost of replacing or bringing the aging physical plants at AMCs up to 21st-century standards is one of the biggest challenges facing university and medical center administrators today. It is now common for an AMC to have $500 million or more in capital construction planned or underway.⁽¹⁾ Master plans that address the twin needs of increasing capacity and replacing obsolete facilities frequently propose a “next generation” road map of major development projects that will require billions in capital investment.

The education, research, and clinical services that distinguish America’s medical schools and teaching hospitals have a significant direct impact on state economies. Likewise, the direct and indirect employment, along with the government revenues generated by the presence of AMCs, impacts a state’s economy. For example, in Ohio and North Carolina—states in which three profound AMCs have recently completed long-term master plans—the total economic impact (both direct and indirect) of AMCs is $25.5 billion and $14 billion respectively, ranking them sixth and tenth among the 50 states.⁽³⁾ Reinvestment in and replacement of outdated educational, research, and clinical facilities will only continue to increase in the coming decades, and contribute significantly to the economies in these states.

The tremendous capital requirements of building renovation and replacement programs are forcing AMCs to make difficult choices in uncertain government and commercial markets. The three missions of the AMC cannot expect to generate funding from sources in direct proportion to their respective capital needs, and medical schools are increasingly dependent on clinical income.⁽⁴⁾ An AAMC survey of medical school revenue by source that takes into account the past 20 years reveals that funding from clinical or medical services far outpaces all other sources as a percentage of total revenues. From 1980 to 2003, medical service revenue for all medical schools grew from just under $10 billion to nearly $60 billion.⁽⁵⁾ The extent to which funds are made available across AMC missions depends upon the governance structure of the university, medical school, and hospital system, as well as the culture of the institution. Even potential corporate and private donors may expect to play a larger programmatic role in how and where contributions are utilized.

In a time of uncertain funding coupled with unparalleled growth, these imperatives have emerged as constant across both public and private AMCs: How to strategically plan for, fund, and implement long-term institutional master facilities plans?

What Makes a Master Plan Actionable?

Actionability in a master plan results from deftly aligning high-level strategic, financial, and operational requirements with a detailed, believable implementation plan. Many times, a few key initiatives—or enabling projects—emerge that must be successfully executed in the initial phase of site development to ensure the success of the remaining master plan.

To be successful, master plans must be based on rigorous analysis, and:

• integrate the planning and financial functions of the institution from the beginning of the master plan process;
• demonstrate financial feasibility in light of limited revenue increases generated by replacement facilities, while credibly allowing for continuing operations;
• display the willingness to invest in site improvements—enabling projects—that may fundamentally reorganize circulation within a campus;
• include phasing strategies that carefully sequence replacement facilities with revenue-generating growth facilities; and
• continue to enforce the discipline not to overspend on old buildings.

Elements of Actionability: The Master Plan
• What makes the institution successful?
• How can facilities support this success?
• Is capital spending paced realistically?

AMC Dynamics and the Physical Environment: Creating Transitional Zones

AMCs are unique in their reliance on the successful interrelationship of teaching, research, and clinical missions. Successful master plans for AMCs create a road map for a physical environment that embraces and strengthens this tripartite dynamic in a planning process that integrates an understanding of the mission of the institution, analysis of programmatic goals and the physical plant that supports them. The vision for the master plan identifies opportunities for strategic growth and innovation and lays the foundation for advancement into the future.

Effective translational research and clinical medicine necessitates new modes of communication, operations, and management, and scientific and clinical practices at AMCs. An institution’s physical space must facilitate interdisciplinary communication, not only between researchers and clinicians within the institution, but also among colleagues at institutions around the world. From an operational and management standpoint, physical space must be viewed not only as a capital asset, but as a means to integrate the processes of scientific discovery and clinical treatment. From the standpoint of scientific and clinical practices, physical space must be designed not only for today’s practices, but also with the flexibility to adapt to those yet to be imagined.

On AMC campuses, “transitional zones” may be used to strengthen these strategic linkages between mission areas in a way that can also ease the building replacement burden. The opportunity lies in the need for office and administrative space—traditionally 15 percent to 25 percent of overall AMC space. Recent trends in translational research have led in recent years to aggressive funding growth targets and the emergence of interdisciplinary program centers which has in turn resulted in increased need for administrative, faculty office, and computational dry research space on AMC campuses. Occupants of these spaces many times need access to both the clinical and wet research environments. A master plan can align building replacement, building re-use, and site development objectives so older buildings can serve some of this “transitional” need.

For example, a master plan for translational medicine at an AMC may align wet cardiovascular research spaces, dry research spaces, and patient-care spaces adjacent to one another. Next to that might be similar groupings for cancer or digestive diseases. This approach to space planning creates adjacencies that facilitate research and patient care within each specialty, while also promoting lateral adjacencies that promote interdisciplinary interaction among specialties, as well as efficiencies from an infrastructure standpoint. Similar adjacencies can be created among separate buildings, as well.

Capital Budgeting and Implementation: Renovation vs. Replacement

The inherent inflexibility of many older buildings—limited floor-to-floor heights and bay spacing, outdated mechanical, electrical and plumbing infrastructure—can make it difficult to upgrade older clinical and research buildings to current standards of practice.

Building replacement decisions depend on qualitative factors including efficiency, quality of care, level of disruption, and timing as well as quantitative measurement of comparative cost. While the replacement cost is usually fairly easy to determine, the cost to upgrade and continue ownership in an existing building is more difficult to establish.

The cost of maintaining and upgrading facilities is a major component of the operations and capital budgets of hospitals. Studies have shown that it costs more to sustain and improve a hospital over time than it does to build it in the first place. Even when optimally maintained, facilities eventually either physically wear out or become obsolete. An obsolete facility is one that does not support modern requirements regardless of its condition. An example is a perfectly well maintained imaging department with rooms that are too small to accommodate new equipment.

While the budget for routine maintenance of buildings remains relatively steady from year to year and the budget required to fix or replace certain infrastructure systems can be projected or modeled based on known service lives, planning for sufficient cash or debt capacity for capital facility projects such as building modernization and restoration is more difficult.

Restoration and modernization expenses require large and sporadic cash outlays, are difficult to predict, and constitute a central cost/benefit metric in building replacement decisions. They exclude routine maintenance, sustainment, and replacement of short-lived components. Restoration returns performance to original levels or to the level assumed by a normal degradation curve. Modernization raises performance to a new level, beyond the original level and might include new codes, standards, volumes, or missions not envisioned in the original design.

A comprehensive study conducted for the Department of Defense for hospital buildings evaluated historical Medicare cost reports for 20,000 hospitals nationwide to establish a metric that relates restoration and modernization costs to building replacement value. The overall result varies somewhat geographically, but provides a portfolio “recap rate” of 21 for all hospitals. This indicates that hospitals invest in the aggregate about four to five percent of their plant replacement value annually in facility modernization and improvements.

The Recap Rate offers a tool for estimating the comparative cost to an institution of renovating versus replacing a hospital building. From a practical standpoint, most hospitals will not spend four to five percent per year, but rather can plan to spend 30 percent to 50 percent of plant replacement value every 10 to 15 years in facilities restoration and modernization.

The Ohio State University Medical Center (OSUMC) had a significant reliance on two hospital buildings comprising 1.2 million sf that housed most key clinical services and 60 percent of inpatient beds. The buildings dated from 1952 and 1978. Upgrading of the older building to contemporary standards would have required a total rehabilitation of the building including conversion of four occupied floors to mechanical penthouses.

To help understand the magnitude and pacing of capital costs, three scenarios were modeled:
1. Replace both buildings now.
2. Replace both buildings incrementally in three major phases of construction with interim renovation and partial remediation costs included.
3. Do nothing—full remediation of existing deficiencies and immediate implementation of restoration and modernization program.

For each option the following capital costs were considered over a 30-year period:
• Initial construction cost based on square foot and space type.
• Remediation costs for buildings not demolished based on detailed facilities analysis.
• Restoration and modernization—based on an investment of 30 percent of replacement cost every 10 years.

Over a long enough period of time, capital costs tend to converge. From a master planning viewpoint, the benefit of the analysis was not in the aggregate capital expenditure, but in the timing of the expenditures and the implications for capital pacing, which is many times a more critical planning criteria. A common refrain might be something like: “I may have to spend a dollar now and two dollars later for something I could do for two dollars now, but I only have a dollar.”

The result in the case of OSUMC was a partial replacement scenario in which inpatient services in the older building will be replaced first and the existing building backfilled with office space. This decision was a confluence of master plan considerations described previously, not the least of which was the co-location of the older building forming a “transitional” zone with excellent adjacencies to the clinical and research environments.

Broad Consensus through Effective Communications

Master plans are inherently living documents—only as useful they are current and accessible. They are also consensus documents that rely on input from faculty, administration, and professional stakeholders to achieve meaningful buy-in.

For example, a master plan at a large AMC took place over a 22-month period and comprised the work of 25 architects and consultants and over 320 faculty, staff, and administrators in 24 working groups. A highly interactive strategy was developed in this master plan to engage the medical center community and provide a more informed basis for decision-making.

To forge the broadest possible consensus and to underscore a continuously interactive process, the master plan was developed not as a static bound document, but as a real time, interactive, “point and click” Web site—accessed by the master plan team and university community through desktop and Internet media.

The Web site allowed participation at multiple levels. For example, the master plan process started with an analysis of building infrastructure condition and educational, clinical, and research space utilization for more than seven million sf in close to 40 buildings. As in many similar academic institutions, the sound bite that emerges from the facility analysis is a campus comprising a multitude of “40-year-old buildings with 40 years of infrastructure.”

Analyses of architectural condition, infrastructure, education, research, and clinical space utilization were configured on a graphic interface to allow interactive “drill-down” through successive levels of detail and modulate the amount of information presented to reviewers at varying organizational levels from senior faculty and administrators to facility managers and staff.

As campus development options evolved, the Web site continued the graphic “drill-down” approach to allow rapid and intuitive transition between phases and campus viewpoints.

One indicator of the utility and success of this technology was that it enabled AMC administrators to present the evolving master plan to internal and external stakeholder groups—many times without the architect present. As a result, the administration conveyed a sense of “ownership” of the master plan that made it easier to build consensus and support.

Effective Initial Phase Implementation Planning

Successful master plans combine a compelling long-term vision with an achievable road map for implementation. The initial phase—the first step—usually requires special attention as it comprises the most detailed program and cost targets.

Detailed space programming can happen at the time of master plan or it can be a high-level evaluation supplemented by benchmarking with demand planning at the time of implementation. The appropriate level of master plan space programming detail can depend on key drivers of the master plan. Is this a nine-month project driven by urgency or time and the need to meet more immediate state budgeting cycle deadlines? Or is the master planning process motivated by AMC and university officials who choose to take a more “wide-eyed, need to know” approach to their overall campus needs?

A detailed space planning approach starts with strategic service volume projections (for hospital services) or funding projections (for research) and organizes department user groups to develop a detailed space program for the first one or two phases of site development. This program will need to be validated as part of the conceptual or schematic design phases of each project, but result in the “best estimate” that can be made at master plan time. The tradeoff is that six to 12 months may be required with fees in the mid-six digits.

A higher level approach is to start with service level projections for the five- to 10-year time frames and translate these into space drivers for key service areas (inpatient bed, ORs). Space needs for other clinical areas can be estimated proportionally based on current space adequacy, degree of strategic emphasis, and benchmarks with peer institutions. While this is clearly an approach that will require validation in subsequent phases, it quickly establishes an “80/20” order of magnitude space model that can be used to align capital and strategic priorities and can be incrementally updated as better information emerges over time.

The first phase of a master plan also many times requires execution of work that is uniquely preparatory to implementation of the master plan—site work and utility relocations, plant expansion, building demolition—and frequently exceeds 10 percent of the entire phase capital budget.

Actionable Master Plans

The cases presented below are illuminating examples of AMCs that recognized the need to engage in institutional strategic planning and rigorous analysis in order to achieve actionable long-term master facilities plan. Much can be learned from comparing and contrasting a range of master planning processes. In particular, the discipline to thoroughly evaluate renovation versus replacement of facilities, along with a willingness to invest in a fundamental reorganization of circulation within the AMC campus emerge as critical elements in any actionable plan.

Fletcher Allen Health Care
This comprehensive master plan addressed all three of Fletcher Allen’s campuses as well as 26 satellite locations of the health system. A primary focus of the planning effort was the consolidation of ambulatory, diagnostic, and inpatient services on the main campus in downtown Burlington. The master plan was implemented in three phases. Phase one alone represents the largest health care development project ever undertaken in Vermont. Construction of the first phase included a new ambulatory care center with a clinical laboratory, a medical education center, a central receiving dock, and a 1,256-car parking garage.

Magee-Womens Hospital
TK&A has worked with Magee-Womens Hospital since 1992 to develop and implement a facilities master plan that supports the hospital’s mission to provide a continuum of care for women throughout their lives. Phase one of the master plan included the construction of a 367,000-sf ambulatory care center designed to create a forward-looking image for Magee and reflect the institution’s commitment to excellence in women’s health care. Operational efficiencies are achieved through the centralization of key diagnostic and support functions on the lower levels of the building, grouping medical office suites on upper levels around a multi-level lobby.

Since the master planning work began, Magee has experienced several changes including joining the University of Pittsburgh Medical Center system, the growth of inpatient bed need, a doubling of emergency room visits, and growth in several other key service lines. The master plan continues to facilitate actionability by recognizing the need for flexibility and consequently, the importance of criteria to serve as a guide for determining how changes could be implemented in the context of available resources.

University of Chicago Hospitals (UCH)
The Duchossois Center for Advanced Medicine (DCAM) is the first step in the consolidation of ambulatory services and is the result of two major changes in UCH’s delivery methodology: the shift to an ambulatory care environment and the shift to a patient-focused care environment. The DCAM provides a single place for outpatient care and one stop for the patient. It also provides a place where physicians can examine, diagnose, and treat their patients. Finally, the building is an ambulatory teaching environment that accommodates the University’s leading medical education program. The implementation of these initiatives, combined with the selection of a highly visible site, resulted in an actionable programming and master plan.

The UCH campus is a large aggregate of buildings from varying eras and original uses, and has remained true to its collegiate Gothic historical precedence over time. The design required that the DCAM be architecturally sensitive and responsive to the existing campus fabric. Subsequent phases of the master plan include the design of a pediatric inpatient facility that mirrors the DCAM’s footprint and massing on the adjacent site to the east.

Thomas Jefferson University Hospitals
The purpose of this master plan is to provide a roadmap for future growth, restoration, and modernization for both the University and the hospital. Together, the two comprise approximately 3.5 million sf of existing built space over nine city blocks in Philadelphia’s Center City district. The principal challenge of the master plan was to create a campus vision that integrates clinical and university functions and instantiates Jefferson—University and Hospital—as an enduring element in the urban fabric of the city. The resulting master plan combines operational efficacy with a flexible, multi-phased site and building development program. With this particular approach to actionability, the plan provides Jefferson with the tools it needs to remain responsive to change while evolving into an integrated and interdisciplinary education, research, and clinical environment.

The Ohio State University Medical Center (OSUMC)
Ohio State University (OSU) is one of few AMC campuses on which the medical center is co-located with all of the Health Sciences Colleges as well as the main university campus. The master planning effort presented the team with multiple challenges. One challenge necessitated organizing the substantial building densities and circulation requirements that are the result of OSU’s legacy as a land grant university. The charge was to conceive and strategize the attainment of a true 21st-Century health sciences environment in which education, research, and clinical care can flourish through interdisciplinary collaboration between and among missions and colleges.

The master plan for OSUMC established an aggressive vision comprised of a doubling of space over 10 years for the education and clinical missions, fundamental reorientation of the campus, and replacement of most medical school and hospital buildings. However, actionability hinged on an initial phase of site development in which operational efficiency favored a highly complex, flexible, and expandable clinical services chassis over easier, less capital-intensive options. A desirable ambulatory destination—for those specialties most dependent on proximity to the academic core—was created through a dramatic realignment of the vehicular and pedestrian circulation system on the campus.

UNC Hospitals and School of Medicine
A road map for development over the next 20 years, the UNC Hospitals and School of Medicine master plan involves an evaluation of existing facilities and infrastructure, along with an assessment of healthcare and research trends and their impact on future facility needs. The hospitals and the School of Medicine share a 125-acre district on the contiguous Chapel Hill campus. The site is distinguished by significant topographic variation, long travel distances for patients and visitors, and a congested primary access road crossed routinely by a growing student population, so strategic and facility growth required a fundamental rethinking of site access, both locally and regionally. A central challenge of the planning process was to evaluate the capacity of the existing Chapel Hill campus to accommodate growth and change among the education, research, and clinical missions and to comply with the goals of the overall University master plan, as well as the town of Chapel Hill’s zoning laws and no-growth policies. As such, the planning and logistics of building replacement, parking development, and appropriate implementation phasing is paramount to actionability in this particular case.

Cleveland Clinic
The facilities master plan addresses the Cleveland Clinic’s current and projected needs by assessing the square feet of the existing facilities on the main campus and the additional square feet on nine regional hospital campuses to determine which buildings will best support their future mission. The master plan resulted in the development of proposed site options that represent near- and long-term campus growth. The plan for the main campus makes the recommendation for an early phase to address clinical services with high growth that require expansion consistent with overall strategic goals. Replacement of beds from older buildings with failing infrastructure and poor functionality is also recommended in the early phase of the plan.

At the Cleveland Clinic, a key actionability initiative was a 4,000-car parking garage with underground service dock and tunnel connection to the hospital. This development was necessary to free up a site for hospital growth and building replacement, and to provide adequate parking to support the institution’s staff growth and physician recruitment goals. This initiative was well into A/E design by the time the master plan was complete.

© 2008 Tsoi/Kobus & Associates Inc. Reprinted with Permission.

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