• Article
  • February 15, 2018

What to Plan for When Tackling a Multi-year Building or Construction Project

Account for changes in the industry, technology and demographics. Here's what one hospital learned during the process.

By Christopher G. Dawes

More than 15 years passed between the time the administration at Lucile Packard Children's Hospital Stanford made the decision to build a $1.2 billion, 521,000-square-foot extension to when it opened at the end of 2017. That's a lot of time for the industry, technology and demographics to change. With this project, we knew there would be significant challenges along the way. As a learning health system and part of Stanford Medicine's academic medical center, our goal of continuous improvement was put to the test. Here's what we learned:

Envision a future you can't predict

Technology changes rapidly. For example, the iPhone, which debuted in 2007, didn't exist when we began this project, but it has changed the way the world connects, communicates and functions. To anticipate leaps in progress, the management and architectural teams made flexible design a top priority. For example, the latest MRI equipment is just six inches larger than the equipment it will replace. Accommodating those six inches could cost hundreds of thousands of dollars in renovations if not for the flexibility of our new design.

Consider the dramatic change in the geography of pediatric care

Like adult care, children's care continues to shift from the inpatient to the outpatient setting. In 2004, we were one of the first hospitals to obtain FDA approval for the Berlin Heart ventricular assist device (VAD) to support children awaiting transplant. But the device could only be used inside the hospital. Today, kids awaiting transplant can go home on supervision with a small, portable VAD.

This taught us that building a hospital expansion would, by necessity, also require us to develop into a multi-site pediatric and obstetric health system with new locations and partnerships to serve the needs of inpatients and outpatients.

In the last six years, we grew from Lucile Packard Children's Hospital into an enterprise now known as Stanford Children's Health. We simultaneously built an 80,000 square foot outpatient clinic, developed seven pediatric specialty clinics around the Bay Area, and developed partnerships with community hospitals to increase our presence in San Francisco and other Bay Area locations.

Beware of budget and labor issues

Growth looks different for every hospital depending on the challenges presented by location, business model and other factors. Hospitals are complex to construct and they are especially expensive undertakings in California due to compliance with seismic performance criteria, rapidly evolving medical technology, and strict patient safety standards. We also built during a construction boom in the Bay Area. This presented a variety of challenges, including a shortage of qualified local labor, especially electricians. This affected productivity, which in turn affected cost and schedule.

Shaping our new enterprise and expanding our hospital depended on our leadership's budget planning and fundraising. As a nonprofit care system, Stanford Children's Health is committed to providing the highest-quality care to children, expectant mothers and their families, regardless of their ability to pay. To shape our growth around this commitment, we prioritized efforts to improve operating efficiencies and optimize providers' ability to deliver the best care. More efficient operations lead to shorter hospital stays and result in fewer procedures, which reduce overall costs for patients.

Prepare and persist

As a nonprofit hospital, we care for patients covered by Medicaid, the Children's Health Insurance Program (CHIP) and other sources of health care coverage for low-income families. Throughout the years of our expansion, we've worked through the changing tides of health care policy in the U.S. Like many children's hospitals, we've had to prepare financially for these uncertainties and learn how to manage risks and changes knowing children and expectant mothers rely on us for care. The future of medicine depends on us to fulfill the research and education missions of the Stanford School of Medicine.

Listen to staff, faculty, patients and families

We learned to be flexible as new staff, faculty, board members and others with new ideas joined the team. Clear leadership has meant balancing the need to make inevitable changes, like accommodating slightly larger MRI machines, with staying confident and committed to the deeply vetted design plans from 10 years ago. These include advances in family-centered care, an award-winning, environmentally sustainable green design, state-of-the-art surgical diagnostic suites and more.

In December, we opened the doors of our new hospital. Our hope is to share the knowledge we've gained across the many years of our project, and contribute to considerations of other hospitals and health care systems as they change and adapt in the evolving industry.

Christopher G. Dawes recently announced his retirement as president and CEO of Lucile Packard Children's Hospital Stanford and Stanford Children's Health.

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