Aging Infrastructure: Space Challenges

Host: We're broadcasting live at the AAMC in Baltimore, 2015 and this year's conversation is about change. What needs to change in health care and I know there's a ton of things, but we're asking each person what specific thing is on their mind right now.

Announcer: Asking questions. Seeking solutions. Algorithms for Innovation. Live from Baltimore at the WMAC 2015.

Douglas, Jr.: Good afternoon. My name is Walter Douglas and I'm the Chief Operating Officer at the Rutgers, New Jersey Medical School.

Host: Walter, what is something at your institution that has to change?

Douglas, Jr.: At this time we have a variety of challenges that we're faced with, but one of the bigger ones is looking at our aging facilities. More specifically we have an aging and an overcrowded faculty practice building.

Host: Yeah, how old is that building?

Douglas, Jr.: Thirty years.

Host: Yeah and what kind of challenges do that present you with, the fact that you've got a 30 year-old building and it's overcrowded?

Douglas, Jr.: The number one challenge is in technology. The technology has been aged and there is only so much cutting and upgrading and modernization you can do to really be relevant in today's health care market. The second thing is the way the treatment in the practice of health care has evolved. Especially with the emergence of electronic health records and how those are used in the patient waiting room. Patient care room.

Host: So you're looking at a building that's old and outdated. What are some of the options that you're exploring?

Douglas, Jr.: We're looking at a total gut and renovation, which is one option. We're looking at transforming the building into another type facility and then acquiring new property. And then the other is starting from scratch and building a brand new building.

Host: And how do you make that decision?

Douglas, Jr.: The best way to make the decision is to consider all the factors and the way you do that is by data. Data collection that allows you to do financial projections, service projections, demand, space needs. So it's really a data driven, data informed process for us.

Host: Yeah, so talk me through what types of data for this particular project are going to be important and what you're getting out of those pieces of data because I think our audience, they're doctors, they probably don't understand kind of what you're talking about here.

Douglas, Jr.: So I'll simplify it into probably three areas. First is very simple when you talk about the building and that's square footage. Do you have enough space to do the work you need to do? And understanding again, how health care delivery has evolved, do you have the right type of space within that what we often call usable square footage? So square footage is one piece of data.

The second one is always very easy to look at or at least to consider and that is revenues. So how much money can you make based on the investment that you put into a facility? The type of practices that will go into that facility, the number of patients you can see, so forth and so on.

Most importantly, quality indicators. How well are the patients being seen? What are their outcomes and do you have a facility that supports the best outcomes for your patients?

Host: And what are you learning so far? What's kind of appearing to be the best option for you? Building a new building, renovating the space, going somewhere else?

Douglas, Jr.: I'll let you know that in about six months. But, more seriously what we're learning is that the rate of change is really at lightning speed and so the ability to make good projections and understand the return on the investments is a bit challenging. Especially in the very tough financial environment.

So what we're really doing now is trying to understand what's the best option and what are the best financial streams to fund a decision and we've not quite gotten there. There are some other variables that may lend itself to coming to a decision soon, but we're not quite there yet.

Host: Are there some barriers you're facing as you're facing renovating or building a new building?

Douglas, Jr.: Finance is always the number one barrier. Number one because you don't want to disrupt service delivery, but you still need to do something to change it. And then technology, because of an aging infrastructure technology is a barrier we're looking to overcome.

Host: I wish I had a big checkbook. I'd just write the check for you right now.

Douglas, Jr.: I know you would if you could.

Host: Yeah. Does that weigh into it? I would imagine that maybe a donor would be more inclined to want a new building built as opposed to a renovation. So I suppose where your financing comes from might also influence these decisions.

Douglas, Jr.: Absolutely, that's actually one of the biggest challenges in our environment is people like to see new. Very few people want to rehab or gut or modernize.

Host: Yeah. Even though it's probably more price effective?

Douglas, Jr.: It depends.

Host: In some cases it might not be.

Douglas, Jr.: Exactly. It depends on the bones of your building as they like to say.

Host: Yeah, yeah. Probably also depends on if you think is it going to be outdated in another five years or ten years and you're just going to have to redo it because things are changing so fast.

Douglas, Jr.: Exactly.

Host: So tell me, you're still early into this process, if somebody else is going through a similar situation where they have to make a decision on an upgrade or a new building, what have you learned so far that would help them go through this process a little bit more smoothly? You ran into any issues that you're like, wow if I did this again I'd change that?

Douglas, Jr.: There are probably three really good examples I could cite. Number one is get everybody involved from the beginning. It's always good when you have a charismatic leader with a vision, but when you get everyone involved who's going to be affected by the change, is very helpful.

Host: That seems like you hear a lot of people talking about that but yet that's always the advice people give. So you didn't do that initially?

Douglas, Jr.: I don't know that we did it soon enough. I think it is always a challenge of how soon do you bring everybody into the room? So based on this experience I think I would have favored bringing people into the room sooner.

Host: Yeah, is there like a point that you could identify in the process?

Douglas, Jr.: No, not necessarily.

Host: Like even just the talking about it point, like almost at the beginning? Is that when you'd bring people in?

Douglas, Jr.: It's difficult to bring people in in the beginning because typically it starts with a notion in somebody's mind that they share with another person. I think to your question, I think once leadership decided that this was the direction we wanted to go in which was, what do we do about our facilities, I think that was the point we probably should have identified a team to come together to look at it from all angles.

Host: Great. What other advice do you have? You had a few.

Douglas, Jr.: Right, the second advice is I would say is do very good financial analysis. You really have to look at the financing of your operation and understand not just the one time cost, but ongoing cost. And that's what's often lost in considering these types of transactions. The third thing is, get the patient involved quick and often because they're the ones who will benefit or not benefit, if you don't do this well.

Host: Yeah. Any final thoughts? Anything you wished I'd have asked or anything you feel compelled to say?

Douglas, Jr.: I think what's important to share is that you always have to an optimistic outlook on what you want to achieve and even if you're not completely clear on what you want the outcome to look like, know that you're trying to do something positive and encourage people to contribute to that positivity.

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