"Normally, the users are not aware of the time frames required to create space," says Bill Daigneau, chief facilities officer. "They go happily along, hire a new person, and then say, 'Where are we going to put him?' We'd have to shoehorn that person in, and the program would suffer until we could build the space."

Complex research space can take two to four years to design and build.

"The real challenge is not how fast we can build, but if we can be so agile that we can literally provide the required space instantaneously," he continues. "Our goal is space on demand, to have the required space at the moment it's needed to support our research and patient care initiatives."

That is a monumental task at the biggest single-site cancer treatment and research center in the world, with 536 in-patient beds and 15,000 employees occupying 9.4 million gsf. The Center has added six million gsf of technologically sophisticated space worth $3.4 billion since 1994, a rate of half a million sf per year.

Daigneau and his team created a four-part model that allows them to economically provide high-quality space in real time, without overbuilding but by building with sufficient flexibility to accommodate future technologies. The four elements of the model—an economic forecast, a space/land inventory, a master development plan, and a long-term capital plan—feed into each other to provide planners with massive amounts of data to answer five critical questions:

• Whose programs are likely to change or grow?
• What types and quantity of space will be required?
• Where should this space be provided?
• How is the fastest, best, and least costly way to acquire the necessary space?
• When is the space required and when will it be available?

The four elements are linked together by an overarching facilities strategy to respect M.D. Anderson's history, its mission, its vision, and its values. That strategy was born of the institution's philosophy that patient care is the top priority, followed closely by the faculty and caregivers, because they are inexorably linked.

"That philosophy drives every decision at M.D. Anderson, and shapes the facilities strategy," says Daigneau.

It sometimes manifests itself in unexpected ways. For example, M.D. Anderson frequently constructs its buildings according to LEED standards, but does not have one LEED-certified building. Daigneau determined that the documentation alone for LEED certification costs about one percent of a project's construction cost. It would contradict M.D. Anderson's philosophy to spend that one percent on something that does not directly impact patient care or research.

That philosophy also frequently leads them to choose function over form when designing a building, resulting in facilities that are attractive but not lavish.

Economic Forecast Model

The economic forecast model (EFM) drives the engine of M.D. Anderson by examining future patient care demand and research initiatives, and determining what revenue margins will be necessary to support what's coming down the pike. The model, which is reviewed annually, offers projections 12 years out on revenue generation, employment levels, and total space planned. It looks at the down-stream service requirements necessitated by each patient visit, particularly inpatient surgeries, which generate increased demand for x-rays, MRIs, pharmaceutical supplies, blood, even kitchen capacity.

The EFM generates various metrics, including labor productivity; bed demand; demand in various service areas such as pharmacy, surgery, radiation oncology, and animal research; financials; debt ratios; and sf per FTE. The data is used to develop a capital plan and facilities projections that go out six years, and projections for space requirements and scenario analysis 12 years out.

Clearly, there are things that cannot be predicted, even with the best projections. Perhaps the Cancer Center succeeds in recruiting a star researcher, or a current researcher lands a huge federal grant. To account for that, they retain a cushion of vacant space, and construct new labs to be as flexible as possible.

"We are now holding, in vacant space, about 50,000 sf of different categories of research labs, and we've programmed two floors of our primary research building to be shell space," says Daigneau. "You can't operate at 100 percent utilization, because then you can't take advantage of opportunities."

In addition, one building is 100 percent interstitial space, so they can renovate a lab in the middle of the floor without disrupting anyone else in the building. Another lab contains no fixed benchwork, so it can be reconfigured at any time for minimal cost.

Space/Land Inventory

The second element of the modeling process is the space and land inventories, which include the configuration, use, age, availability, and condition of every square foot of building space and every acre of land at the Cancer Center. The model tracks the projected end of life for every major building system—including the envelope, mechanical/electrical, and finishes—in every facility.

"In 2010, for example, we are going to have the end of life on our major finishes in our major hospital," says Daigneau. "We know from that model that in 2010 we will likely be required to take certain beds offline in order to begin to renovate and refurbish those rooms. We need to provide space for those displaced beds."

M.D. Anderson had been putting buildings on AutoCAD when Daigneau arrived, and the institution now requires all architects who work for them to submit their drawings in AutoCAD.

"We also had to convert all the old drawings to AutoCAD," he says. "Then we bought ARCHIBUS to link AutoCAD to the space inventory. It took us four years to do that. Just keeping it current is a major effort."

Master Development Plan

M.D. Anderson has taken master planning beyond what Daigneau calls the "pretty pictures" of traditional site plans showing where future buildings might be located.

"Those things really have little value to us in our master plan," says Daigneau. "Of greater value to us are diagrams that show utilization of our buildings, both current and future. We know how we are going to use every square inch of our land. We have studied all future sites to know how much we can build as well as how we can recycle existing buildings for new uses."

The Comprehensive Master Plan includes:

• Overall and site specific information
• Land use zoning, density
• Building use zoning
• Circulation, transportation, parking
• Utilities infrastructure
• Massing and appearance
• Building life and replacement

Even more unusual, the plan maps out the decision-making process that will be required to achieve their goals. The master plan projects out 10 years based on data from the EFM, and 20 years based on site studies and future land-use opportunities.

Long-Term Capital Plan

The next step is to know what you will do with the information in the Master Plan and the Space/Land Inventory. The Long-Term Capital Plan projects the next six years of facilities requirements, including new construction, renovation, reinvestment, equipment replacement, IT, and land acquisition, as well as financial projections for the construction and on-going maintenance of the facilities.

"We create a cash flow chart which shows when the capital is required, how that requirement would be funded, where the money would come from, and if there are any surpluses or deficits generated in that year," explains Daigneau.

Using in-patient beds as an example, here's how the four models interact: Administrators project through the EFM that the Center will need a certain number of beds. The first step is to look at the inventories of existing space to determine if they can accommodate those requirements, and, if so, what reinvestment would be required based on the condition and type of space available. If that doesn't pan out, they look at new space. That brings them to the master plan, which helps them determine how and where they would develop the new space. That information is then incorporated into the long-term capital plan, which begins the process of testing whether or not the institution can afford to do the project.

"To do that, we will take the long-term capital plan and feed it back into the economic forecast model, because as we bring the new space online it has an economic impact," says Daigneau. "It generates revenues and research dollars, which starts the whole cycle over again."

A Scientific Approach to "What if…"

A solution doesn't become a reality until it goes through two more steps: scenario planning and risk assessment.

The scenario planning approach Daigneau uses is based on the book, "The Art of the Long View: Planning for the Future in an Uncertain World," by Peter Schwartz.

To test proposed facilities solutions, Daigneau has developed four widely divergent scenarios about what M.D. Anderson might look like in the future, with different possible directions in technology and regulation, patient breakthroughs and protocols, and finances.

"One scenario is called the research institute, where M.D. Anderson becomes a research enterprise that distributes its knowledge and transfers its technology to other caregivers," says Daigneau.

"From that process we are able to evaluate risk," he says. "You are looking for what is called no-brainers, no-gainers, no regrets, and those that have contingent liability."

The "no-brainers" are decisions which, no matter what happens in the future, it is a good investment. The "no-gainers" are things which don’t make a lot of sense in any of the four scenarios. The "no regrets" are decisions which could possibly show a return on the investment, and, most importantly, probably won't lose any money. The "contingent liabilities" are the decisions which may generate a great return, but also have the potential of great risk.

"It is those we try to focus on," says Daigneau. "In focusing on those, we look at our long-term capital plan after we have looked at the four scenarios and say, 'Is this the right decision? Is this the right investment?' If we determine that there is too much risk, we will look at the alternatives and start that process again. We look at the alternatives, the use of existing space, the future development, aspects of ownership, all of that, and we re-run that process."

By Lisa Wesel

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