2012 // blog.hmcarchitects.com/healthcarehmcarchitects.com/wp-content/uploads/HMC_Healthcare_News-2012.pdfinvestments related to information technology that, in many instances, have

2012 // blog.hmcarchitects.com/healthcare

FIVE FACILITY PLANNING CONSIDERATIONS IN THE FACE OF REGULATORY REFORM // PG.3

CLIENT PROFILE: SETON MEDICAL CENTER // PG.7

THE ART OF JUGGLING // PG.9

THE VALUE IN LEAN // PG.13

HMC ACQUIRES SUBSTANCE DESIGN // PG.15

03 // HMC ARCHITECTS

Facility PlanningFive facility planning considerations in the face of regulatory reform The uncertainty of the regulatory environment, particularly as it relates to impacts of reimbursement and other proposed regulatory changes, has many organizations in a “wait” mode to move forward with facility projects. Instead, many organizations have prioritized investments related to information technology that, in many instances, have been deferred for years. These investments are now taking center stage as communicating and demonstrating safety, efficiency, and effectiveness and will be critical to weathering the regulatory changes.

Since 2007, funding of capital improvement projects has slowed, representing a shifting of priorities away from facility investment. According to a March 2011 HealthLeaders’ report,* 39 percent of respondents indicated that electronic medical records will dominate their capital budget in the coming year; 42 percent of respondents expect to encounter challenges or difficulties accessing capital in the coming year; and down from previous years, only 10 percent of respondents plan to spend the majority of their capital budget on building a new facility.

Even small or specialized facility projects can lead to unexpected consequences that may result in capital budget impacts. Whether large or small, these considerations may help avoid unintended consequences in your next facility planning project.


Reduce unplanned capital expense by coordinating projects Consider the impact of proposed renovation/relocation of functions that have interdependencies on other services/functions Consider the impact a proposed project may have to ongoing operational expensesObtain estimates of required versus recommended renovation or replacement to aid in prioritizing capital investmentConduct a highest and best use analysis to prioritize capital requests, planning and budgeting. The use of objective criteria, such as the organization’s goals for return on investment, mission related goals, and cost of renovation will aid in making rational decisions.

Maintain strategic focus by integrating facility issues relative to strategic and capital planning

Guide functional planning based on operating models

Functional planning should represent not just the number of key planning spacesand their inter-relationships, but ask howthe physical environment should support thecare delivery model based on the goals forthe organization—regardless of the size of the project. Never leave an opportunity toimprove efficiency and effectiveness on the table!Care delivery and operating models arealways evolving and responding to eachmarket and organizational context. Mostorganizations and most clinical professionalsbelieve in a continuous improvementphilosophy whereby innovative approachesare considered and/or adopted as theysupport enhancements particularly related to: Patient and caregiver safety Efficiency (reducing waste) Evidence Based Design (EBD): Basing decisions about the built environment on credible research to achieve the best possible outcomes


Options for bold market strategies requiringaccess to capital for facility projects Private equity: Shrinking access to capital and a reprioritization of capital investment has increasingly driven healthcare organizations to the private investor/equity markets. Private equity firms will demand a more rigorous return on investment analysis before approving capital projects.

Consider alternative financing: Many hospitals/health systems are prioritizing

capital investment in previously deferred

information technology improvements

PPACA has spurred many healthcareorganizations to evaluate the effectivenessof their integrated healthcare deliverymodel Many are participating in variouspilot projects (e.g., Bundled Payments,Accountable Care Organizations, MedicalHomes, etc.) that represent incentivesto reward and encourage collaboration,integration, efficiency, and higher qualityof care.

Respond to market drivers for integrating outpatient/ambulatory services and post-acute services

PPACA is also expected to increase the number of individuals that will have sometype of health coverage, which in turn isexpected to put pressure on existingemergency departments. One option for many organizations is the development of Freestanding Emergency Departments (FED). Regulations vary by state on the permitting and licensing of these facilities. FEDs provide greater access and faster throughput and are no longer just for rural communities looking to bridge services to distant full-service acute care hospitals.

Private equity firms see opportunity bornfrom the Patient Protection and AffordableCare Act (PPACA) in the way of increasedpatient volume combined with reductionsin the uncompensated care achievedthrough incentives to promote moreefficient and effective care delivery.

Donor campaign: Continued decline inannual and major gifts was reported by the Association for HealthcarePhilanthropy’s annual survey, but moretargeted special event fundraising andemployee giving were up in 2010.

Many organizations have focused on pieces of these models, but recognize that a physical improvement will support their goal to achieve more coordinated care, particularly in the ambulatory (e.g., medical homes, outpatient therapy, etc.) and post-acute settings (e.g., skilled nursing facilities, long-term acute care, acute rehabilitation facilities, etc.)


Enhance communication/reduce “rumors” and questioning of prioritiesBuild cooperation among common goalsBring current care delivery practice to the table to discuss best practices and explore innovations that can be supported through the built environment (such as EBD)Engagement is achieved through an assortment of techniques: Visioning sessions Town hall meetings Project charrettes (staged throughout the planning project) Multi-disciplinary planning teams

Engage stakeholders: Uncertainty is the buzzword for the healthcare industry

today. Healthcare organizations can manage the

expectations of various stakeholders board—members,

staff, physicians, and community members through

deliberate communication plans and active engagement.

Additionally, engagement can facilitate buy-in and a sense

of shared decision making.


Seton Medical Center is taking steps to plan and design a $360 million seismic rebuild of their Daly City, Calif., hospital. Owned by the Daughters of Charity Health System, the new 192-bed inpatient tower will open by January 1, 2020, thereby complying with state seismic requirements. HMC Healthcare News sat down with CEO Lorraine Auerbach to better understand their challenges and how they’re being addressed to move forward with new development.

1. How did State legislation SB1953 (seismic standards) and SB 306 drive the need for a replacement hospital, and how did Daughters of Charity Health System respond to the legislation?

As a mission based not-for-profit medical center, we remain steadfast in our commitment to ensuring we have a safe and seismically compliant facility that protects all of our patients, physicians, and staff. Consistent with state regulations, Seton Medical Center and the Daughters of Charity Health System continue to press forward with our efforts to meet the 2020 seismic deadline as required by the State of California. Seton and Daughters of Charity were among several California hospitals and health systems that previously advocated for an extension to meet the State of California seismic retrofit requirements. Seton along with other California hospitals was granted that extension and thus must complete construction of our new inpatient tower by 2020.

Client Profile:

Seton Medical Center


3. What challenges did you face in putting your team together?

Healthcare is a highly competitive and complex environment these days. Attracting the best and brightest talent has always been fundamental to Seton and the Daughter’s of Charity. I was looking for a unique combination of world-class design but with practical, down-to-earth ability. This is a challenging project because it is an iconic site that requires a great design and with limited funding. We also wanted to do a collaborative process putting the hospital team, the project management team, and the contractor together so planning and concept are done collaboratively and cost effectively from the beginning.

4. How will the new building respond to meet your operational challenges?

Seton has undergone organizational restructuring in recent years to not only help us staff for the right size of patient volume, but also to operate as efficiently as possible. As a not-for-profit, mission-based hospital and health system, Seton and the Daughters remain committed to being the best stewards possible of the limited resources entrusted to us by our community. The new building will improve operational efficiency, increase awareness of Seton and its services, and introduce many new innovative and impressive healthcare technologies to the people of the San Francisco Bay Area.

5. What impact on the local community will this project serve?

The simplest and easiest response is continual focus on improving the quality of care to the people of our area. Not only will our community benefit from the improvement in the quality care offered, but it will also help fuel our local economy by providing new jobs and resources to local residents during a difficult economic time.

2. How will this replacement hospital affect your position in the marketplace?

For nearly a century, Seton Medical Center and the Daughters of Charity have served the people of the San Francisco Bay Area by providing high quality care. The replacement hospital will enable our healthcare ministry to continue its longstanding mission of extending the healing ministry of Jesus to any member of our community who turns to us for care. The new facility will help us continue to meet our commitment to providing innovative technology and heartfelt care.


The urban sprawl of Los Angeles has resulted in numerous hospitals located in a dense, urban fabric. HMC Architects recently worked with one such hospital, a multi-specialty academic medical center, to expand its emergency department, which has more than 75,000 annual patient-visits, and is just one of many ongoing construction projects occurring at the busy campus.

It finds itself having to adapt to meet technological changes, be competitive in the marketplace, and attract and retain new staff, among others challenges. To meet these demands, the campus is under a constant stage of construction. How do they handle it all, while ensuring projects are completed on schedule and on budget?

The medical center’s program management handles a large volume of projects and their successful approach can be applied at medical facilities of differing scales and locations.

The Art of Juggling:How one of the busiest hospital campuses in the country juggles ongoing multi-phase construction projects

By: Ward Thompson, Sr. Project Manager, HMC Architects


Steps for Success

Work with a systematic program management process

Start with the basics—with hundreds of projects and tens of millions of dollars involved, select a sophisticated, yet flexible program management software—it does what you want it to, not what the software programmers want. Clearly this is both a time and dollar commitment, so research options carefully before making a decision.

Program management tools can provide reports on a daily basis and at any logical regular point to respond to administrative demands and requirements. There are many types of reports but an informative “dashboard” summarizing the status of cash flow and project variances is critical for quick and easy reference leading to “deeper digging” when variances are not within agreed tolerances.

Start with the basics— with hundreds of projects and tens of millions of dollars involved, select a sophisticated, yet flexible program management softwareFor instance, a project with a 20 percent variance in cost that represents only $3,000 may prompt a request for a project manager’s explanation. However, 3 percent variance in cost that represents $55,000 may be worthy of more in-depth research. Remember, this is a tool for management and the reports must assist the managers to do their job.


Hire experienced management, design, and construction professionals who work collaboratively

A program and construction management effort involves three strata team—your own employees, your design professionals and your construction professionals. In some cases the design and construction professionals may be retained under one design/build contract but the expertise remains divided. One of our clients uses most commonly accepted project delivery methods, but for remodel projects, such as the expanded and renovated Emergency Department (shown above), the usual method is design-bid-build. In healthcare and especially in regulation-heavy California, experience is essential.

The most successful program management includes experienced project management where anticipating the issues and problems saves both time and money.

Equally, collaboration between all parties working in an interactive and non-adversarial relationship will produce measurably better results on any project. Putting effort into getting the job done rather than protecting self-interest is a guarantee of reducing costly change orders affecting both time and money.

Build trust with governing agencies, such as OSHPD/AHJ

In California, the governing agency for acute care facilities is OSHPD—the Office of Statewide Health Planning and Development. Other states have similar but perhaps less regulated “Authority Having Jurisdiction” due to the lack of seismic safety influences.

Within these agencies are professionals who have expertise in building code and licensing issues. Very often they have come from private practice and understand the design and documentation process but their focus is ensuring code compliance and public safety.

A vital part of a relationship between a design and/or construction professional and the OSHPD/AHJ professional is trust. Trust breeds cooperation and as a result can speed up the process especially during the construction phase when time quite literally is money.


Project duration is always a challenge. With a con-tingency, the impact to the budget is lessened if chang-es are required to meet new technological demands.

Have a built-in construction contingency

Healthcare projects are one-of-a-kind ventures. Often, there are “lessons learned” that can be applied to influence actions and decisions, but inevitably the details are different and lead to new lessons learned. Any program management system must allow for changes during both design and construction within their budgeting process. Clearly a remodel project will have a different approach than a new build project, but the need for design and construction contingencies is common.

Healthcare staff must deal with technology changes, and not surprisingly want to have the most up-to-date conditions when the project comes online. Healthcare projects require years of design and construction effort. In California, it is not unusual for a major project to take ten years from initial strategic planning to patient treatment. Project duration is always a challenge. With a contingency, the impact to the budget is lessened if changes are required to meet new technological demands.

Remodel projects must deal with field conditions. The design professional begins with field investigation to identify as many conditions as possible that may affect documentation and construction. However, concealed conditions only revealed once construction begins often result in additional work, additional time, and require added documentation to comply with code related requirements. An appropriate contingency plan will mitigate the impact of cost increases.


When Universal Health Services (UHS) looked to build a new greenfield hospital in Temecula, Calif., they were challenged to do more with less. They set forth on a journey to design and construct a 140-bed acute care hospital with their pencils sharpened—a mere $144 million budget.

With construction costs on the rise, and hospitals being increasingly more expensive to build—most hospitals in California now cost nearly $2 million per bed—inefficiencies equate to dollars lost. At Temecula Valley Hospital, a groundbreaking process based on Lean principles is making it one of the fastest, and most cost-effective to construct hospitals brought to market in California.

The project, currently under construction, is based on a number of conditions of satisfaction set forth by the entire team, including being one of the safest and most patient-centered care environments—as well as one of the most operationally efficient—in the entire UHS system. Crucial to this success, was the adoption of Lean principals. This method allows the owner, architect, and contractor to participate in the design and decision-making process from the onset of the project.

The Value in LeanApplying Lean Principles at Temecula Valley Hospital

By: Steve Wilson, Principal, HMC Architects

Originally Published in Healthcare Construction + Operations News


“Traditionally, project delivery systems create silos, where designers and contractors put personal or company goals ahead of the project,” says Bill Seed, Staff Vice President for Design and Construction for UHS. “This type of collaboration resulted in an accelerated construction timeline and reduced costs,” he adds.

First introduced in Japan with the Toyota Production System, the Lean approach serves as a framework for continuous performance improvement. The goal is to achieve operational and financial excellence, which includes best cost, quality, efficient delivery, empowered employees, and a consumer-focused culture. When applied to healthcare construction, this process is all about preserving value while eliminating waste, and it begins with the right team.

Comprised of HMC Architects, DPR/Turner, Southland Industries, and Bergelectric, the integrated project delivery team is utilizing target value design to drive toward the $144 million total project cost for the 140-bed hospital. According to the Lean Construction Institute (LCI), in lean construction, collaboration beginning early in design is extremely important. Everyone becomes a stakeholder in the project and is held accountable.

At Temecula Valley Hospital, this collaboration took place early on in what the team refers to as “The Big Room,” an off-site meeting room where weekly meetings are held with the entire project team present. Here, the team is able to discuss timely issues and problems are solved. “The combination of collaborative thinking, co-location, and transparency of costs are the key elements for establishing a Lean design team,” says Seed. “We’re on target to meet all of our cost estimates. This will be one of the lowest cost new hospitals built in California, coming in at nearly half the cost of a hospital of similar size and program.

The shared commitment of the project team drives many innovations, including financial incentives. At Temecula Valley Hospital, Lean principles drove the development of a contract that reflected shared goals and performance metrics. In this structure, the team has an incentive to beat the established project schedule and budget goals, which results in shared profits for everyone involved. Here, the DPR-Turner Construction team agreed to deliver the project at a specific cost and a specific schedule. When the team meets those objectives, they are rewarded. Every dollar saved by wasting translates to shared cost savings. On the other hand, if the team goes over budget, they stand to lose.

While on the surface, Lean principles seem largely about eliminating waste, they also add much to the design process. At Temecula, this process led to improved functionality and operational efficiency that will save the client long-term costs throughout the life of the facility. In the Consolidated Treatment Unit, for example, cost, effort, time, and operations efficiencies were gained. “At Temecula Valley, diagnostic services and other patient needs are met with the patient remaining in one place and services brought to them, which is not your typical model, where often departments are silo-based and patients go from place to place,” says Seed. “These types of operational strategies will prove to yield long-term cost savings over the life of the hospital. The benefits accrue back to us in better service, healthier patients, and a happier staff.”

As in life, in Lean construction nothing will ever be perfect. However, there is a continuous improvement process that will take place to create further value for our clients, their clients, and eliminate waste while creating improvements and innovation.


HMC Architects recently merged with Phoenix-based Substance Design Consortium. Founding principals Donna Barry and Jose Pombo joined HMC’s corporate leadership, strengthening the firm’s capabilities to serve its clients in Arizona. Barry joins the firm as Design Principal; Pombo’s corporate title is Associate Principal, Sr. Project Manager. The new firm is known as HMC+Substance Design and operates from its existing studio in downtown Phoenix.

“Having started my career in Phoenix in 1983, this merger reflects a spirit of homecoming for me. One of my earliest mentors and friends in the industry includes the modernist architect Al Beadle.” says Randy Peterson, FAIA, LEED AP, NCARB, President and CEO of HMC Architects. “By joining forces with Substance Design, we are gaining the talent and resources of an emerging design firm who shares the same commitment to client service that we value so much at HMC. Donna brings a passion for design that is consistent with our firm’s culture. I look forward to her being a key leader in our continued growth in Arizona,” he adds.

Substance Design Consortium merged with HMC’s existing Arizona office, led by Principal-in-Charge Erik Hanson and Design Principal David De Valeria. Hanson continues to manage the combined downtown Phoenix studio, which will benefit from the added resources of the firm’s 411+ employees located in 12 offices throughout California, Nevada, Arizona, and South America. “The new partnership is mutually beneficial,” says Hanson. “By combining our employees, we’re gaining new perspectives and a great energy that will inform our clients and projects moving forward.”

HMC Acquires

Phoenix-based Substance Design Consortium

With the merger, Substance Design Consortium can offer clients planning, architecture, and interior design services in new markets, including healthcare, justice, corporate/commercial and civic design. Notable projects by Substance Design Consortium include the iconic Hayden Flour Mill in Tempe, Ariz., Phoenix Theatre Mainstage, and the Glendale Community College Public Safety Science facility.

“We are very excited by the opportunities this merger represents in terms of dramatically increasing the depth of talent, experience, and project delivery resources that we will now be able to offer to our clients,” says Barry. “We believe this will open possibilities to us that are increasingly reserved for larger local and national firms and we look forward to successfully competing head to head with the biggest and best in our market,” she adds.

Barry and Pombo founded Substance Design Consortium in 2007 and have focused their practice on creating high-performance architectural solutions that maximize program requirements while responding to the natural environment. Their concentration on public and community-based facilities complements HMC’s 72-year history of specialization in the healthcare, education, civic, and justice markets.

HMC+Substance Design is located at 1001 North 3RD Avenue, Suite 2; Phoenix, Ariz., 85003.


Banner HealthFour New Health Centers // Phoenix, AZ

Children’s Hospital of Central CaliforniaKitchen Upgrade and Security Improvements // Madera, CA

Community Regional Medical CenterMaster IDIQ Agreement // Fresno, CA

Kaiser Fresno Medical CenterTotal Health Environment Campus Refresh

Upgrades to Central Plant

Security and Remodel Upgrades at (7) M.O.B. Pharmacies

Renovations to ED discharge offices // Fresno, CA

Kaiser Permanente Pasadena, Medical Office Building Tenant Improvements // Pasadena, CA

Kaiser Permanente San Diego Medical CenterEmergency Department and LDR Master Plan // San Diego, CA

Kaiser Permanente South Bay Medical CenterTower Addition // Harbor City, CA

Rady Children’s Hospital Conference Center // San Diego, CA

Rady Children’s HospitalPsychiatric Care Center Expansion Study // San Diego, CA

Santa Clara Valley Medical CenterNew Main CT Scanner Relocation

Fluoroscopy Rooms 1 & 2 Equipment Replacement

New Stereotactic Room

SPEC/CT Equipment Replacement

MRI 1 Equipment Upgrade // Santa Clara, CA

UC Davis Medical CenterGamma Knife Replacement

Mammography Renovations // Sacramento, CA

VA Medical Center, FresnoMental Health Psychosocial Rehabilitation and Healthcare for Homeless

Veteran’s Center // Fresno, CA

VA Medical Center, San DiegoRadiology Master Plan, Kitchen Remodel // San Diego, CA


Since 1940, HMC Architects’ timeless and functional designs have impacted communities across the Western United States. HMC is one of only five firms in the world to be a founding Member of the Planetree Visionary Design Network, reflecting its understanding of the effect design has on the healing process. The firm is consistently recognized by Modern Healthcare, Healthcare Design, and ENR magazines as a national leader in healthcare planning, design, and construction administration. HMC is honored to be the recipient of the 2011 AIA Academy of Architecture for Health Unbuilt Award for its design of the First People’s Hospital, China, and was recently named “Best AEC Firm to Work For” by Building Design + Construction magazine.

To contact one of our healthcare design and operational experts, please find a relevant leader below, or call 800-350-9979.

01. Jerry Eich, AIA, ACHA, LEED AP

Principal; Practice Leader, [email protected]

02. Bob Kain, AIA, ACHA

Principal, Healthcare Business Development [email protected]

03. Raymond Pan, AIA, LEED AP

Design [email protected]

04. Chin Lee, AIA, LEED AP

Managing [email protected]

05. Trisha Clark, LEED AP

Vice President, Strategic [email protected]

06. Kim Schillig, MHA, FACHE

Principal, Senior Healthcare [email protected]

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Documents

2012 // blog.hmcarchitects.com/healthcarehmcarchitects.com/wp-content/uploads/HMC_Healthcare_News-2012.pdfinvestments related to information technology that, in many instances, have