Unique Way To Cut Down On Capital Cost In Building Hospitals

G D Kunders

By one reckoning, the broad range of total costs of building a hospital facility are found to be 78 – 81 per cent for construction which includes built-in equipment, 12 – 15 per cent for depreciable and non-depreciable equipment and six to eight per cent for fees. The last item includes legal fees as well as fees paid to architects, consultants and other professionals. Depending on the kind of hospital and how advanced and hi-tech it is, the cost of depreciable equipment in today’s hospitals may be more than 12 to 15 per cent of the total cost.

The typical units of cost of a hospital facility may be divided into two parts. In the first part, they are for the acquisition of site, land development, off-site improvements, legal fees and expenses, preliminary survey or feasibility study, setting up of a permanent organisation and community and public relations exercise and fund raising.

In the second part, costs relate to site survey and soil investigation, work covered by construction contracts (as specified in the drawings and specifications which include fixed equipment, contingencies for minor alterations, extra work etc), supervision and inspection at site, depreciable and non-depreciable equipment, professional fees and payment to statutory bodies.

The major costs in building a hospital relate to land, construction and equipment. And within the facility, the per square foot cost varies greatly – from the cost of storage space, which is the cheapest, to such areas as surgical suite and radiology which are the most expensive. Cost of construction in its turn depends on the total square footage required for the hospital. The number of beds, the extent of primary, secondary, tertiary care and other specialised services, the number and types of specialties, the degree of sophistication and use of cutting edge equipment and technology determine the total cost of the hospital building.

How much space is required for a hospital? In the earlier times, a simple method – a rule of thumb as it were – was used to estimate the space requirement: Space required for one bed multiplied by the number of beds the hospital is going to have. The minimum space occupied by one bed itself and access is approximately 100 square feet. It is seen that the total hospital area is eight to ten times that for the beds. For example, the total space required for a hospital of 200 beds on this basis is 100 sq feet x 8 to 10 x 200 = 1,60,000 to 2,00,000 sq feet.

Regardless of how carefully one has studied and taken into account all factors in the planning phase, total space requirements will to a certain extent represent some guesswork. It is impossible to predict accurately the degree to which new services will develop and used and what other factors will appear in the overall picture. It should also be remembered that the actual space required for a hospital could be estimated only when the programmes, activities and services that the hospital is going to offer and the space required for these programmes and services are known.

There is one unique way of computing and actually cutting down the required space in the hospital thereby significantly cutting down on the cost of building the facility without compromising on the quality and efficiency that very few hospitals in this country, if at all, may have tried. This is based on the premise that the solution to meeting space needs does not always lie with acquiring more space. The method that we are talking about is a careful study of available time and occupancy time in certain departments, and maximising use of space and equipment by extending hours and days of service.

When considering space requirements for a department, the planners should carefully look to the hours and days of operation as another alternative to acquiring more space simply because space, equipment and furnishings represent a costly investment. Once acquired, they are available 24 hours a day and seven days a week, which means a total of 168 hours per week. Given that our hospitals by and large work six days a week and 8 hours a day, services in most areas of the hospitals are offered 48 hours a week. This means that the costly investment, which is at the disposal of departments for 168 hours a week, is utilised for less than 30 per cent of the total available time.

A study done in three large US naval hospitals showing the several components of occupancy time of their physical therapy department, such as attended time, preparation and clean-up time, and non-attended treatment time, for an extended list of physical therapy activities threw up some interesting facts. Noteworthy was the time when the facility remained idle. The lesson learnt from this exercise could be put to good use in space planning in hospitals.

Experts say hospitals of the future wanting to maximise their utilisation potential and reduce construction and equipment costs, must give serious consideration to extending periods of service. For instance, areas like the operating rooms, outpatient and physical therapy departments can extend their utilisation by working 12 hours or more a day by staggering staff working hours and lunch break, and working in two shifts. It is beneficial to patients too. Most physical therapy patients, for example, are outpatients. As working people, they would want to utilise the services of outpatient and physical therapy departments outside their normal working hours and so would welcome extended hours. Visiting and part time medical consultants who practise in more than one hospital would also welcome the move as they will have greater freedom of choice of hours of work.

Many hospitals in the West have responded to these demands and are offering extended hours and days of service. Some of the innovative staffing arrangements are staggered hours of work, compensatory time off for staff working on weekends (Western hospitals work for five days a week), the 10-hour, five-day-week concept, and use of part-time and visiting staff in the evenings and on Saturdays and Sundays. This can be more easily accomplished in large and medium-sized hospitals in cities where staffing is not such a problem as it is in smaller and rural hospitals. For the hospitals, it is doubly rewarding. On the one hand, they save on their investment on space and equipment. On the other, they have the satisfaction of meeting the special needs of their patients. This can also be used as a strategy for marketing the hospital and for building a strong brand image and brand loyalty. Besides, it is incongruous, they say, to think that a patient hospitalised for physical therapy should go without these services on weekends. Times are changing in our country too. Many hospitals now keep their outpatient departments open till late in the evenings. But that is not done for the purpose we are talking about. This practice would have started long after their investment on construction was made.

Considerations of the available time and space become all the more significant when one realises that in designing a modern hospital, the space required for corridors, circulation, mechanical equipment, architectural requirements and access to various functional areas takes priority over others things. That reduces the space that could be allotted to departments. The constraints imposed by construction costs, which can be formidable, take a heavy toll of the ultimate amount of space that is apportioned to various departments of the hospital.

Although space requirements vary from the small one-storey rural hospital to the sophisticated and high-tech urban medical centre, these differences are diminishing. For one thing, standards are becoming more and more common in our country and are bound to pervade all hospitals in the long run. More importantly, today’s rural middle class population with a fair amount of disposable cash is becoming so health conscious that it demands the same high quality healthcare services and facilities that are available to its counterparts in larger cities.

The writer is a Hospital Management Consultant and Author.
Email: gdk@vsnl.net