Selling the Numbers to the Board

1
(No Transcript)
2
Selling the Numbers to the Board

• Case Study
• The Heart Hospital

Jeffrey S. Kent Director Facility Planning,
Design, Construction SwedishAmerican
Health System
3
SwedishAmerican Board

• Board style is one of governance by policy and
  not that of micro-management of the Leadership
  Team
• Board Members have 15 year tenure
• SAH has had a history of being slow in approving
  the spending of capital on new facilities

4
Project Background

• SwedishAmerican Health System
• Located in Rockford, Illinois 1 hour from
  Chicago
• 395 Bed Community Hospital
• 1 in Hearts in Northern Illinois
• Cardiology Service Line has a sustainable growth
  of 15 per year for past 5 years
• In 2001 Cancelled the Non-Invasive Center
  construction that was part of Phase I

5
Defining the Project

• Phase II of Hospital Master Plan
• Expansion of Non-Invasive and Outpatient
  Cardiology Services
• Facility to support the regional growth of the
  Cardiac Service Line
• Expansion and Replacement of ICCU/CCU
• Desire to get the Hospital to all Private Rooms
• Need of additional Medical Surgery Beds

6
Project Challenges

• Project represents largest project ever presented
  to a SAH Board
• Project needed to be built in one Phase
• Just finished 32M Phase I addition
• Uncertainty of SAH bond borrowing capacity

7
Project Team

• Project Development Team
• Design Team
• Architects Engineers
• Nurse Program Managers
• Industrial Engineer
• To Review Operations
• Cardiac Consultant
• Assist in developing a business plan
• SAH Team
• Physicians
• Senior Management
• Staff
• Cost Accounting Department

8
Goals of The Master Plan

• Evaluate the Growth needs of the Cardiac Center
  of Excellence
• Study how SAH can develop a more Patient/Family
  centered delivery of care
• Develop a plan for SAH to achieve 100 Private
  Rooms
• Create a Business Plan to support this growth

9
The Process

• Update of Campus Master Plan
• Programming for Cardiology and Surgical Centers
  of Excellence
• Growth Projections for market area Cardiology and
  Surgical Centers of Excellence
• Evaluated and project Future Med-Surg bed needs
• Investigate alternate means of patient/family
  centered care
• Complete Operation assessment Hospital Operations

10
Project Time Line

• Started Fall 2001
• Completed Summer 2002

11
The Plan

• Identified potential market growth and how that
  would translate to SAH volume growth
• Identified how that growth would translate into
  future Telemetry Bed needs
• Identified operational cost saving solutions
• Master Plan look at an integrated Heart Hospital
• Master Plan Project Cost Projections

12
Board Presentation 2002

• Presented the updated Campus Master Plan
• Plans for the new Heart Hospital and Surgical
  Expansion
• Business Plans and Growth projections for Centers
  of Excellence
• Master Plan Project Cost Estimates

13
Failure

• Board liked the Master Plan and the plans for the
  Heart Hospital
• Accepted the Growth Projections
• Did not accept SAHs ability to fund the project
• Did not accept the cost of the project

14
What Next?

• After 4 months of Wandering in the Desert
• Realized the Plan met the Organizations Strategic
  Goals
• The elements of the design were right
• Growth projections were fuzzy but growing
• Development Costs were at a high Master Plan
  level and needed better refinement

15
Embellish the Plan

• Design Team Brought back to create Master Plan
  Schematic Drawings
• Estimating and CM Firm hired to provide more
  complete estimates
• SAH Team reassessed the Business Plan
• Senior Leadership Reassessed SAHs borrowing
  limits

16
Board Retreat 2003

• Presented Plan with 2 Options
• Version 1 3 story Facility with one new floor
  of Private Telemetry Rooms
• Version 2 4 Story Facility with two new floors
  of Private Telemetry Rooms
• Presented increased Borrowing power to support
  either option

17
Semi- Failure

• Board Approved the new 3- Story Version
• Board Failed to Accept projected volume growth
  projections and Bed Needs Assessments

18
Final Steps

• Started a campaign to sell the Telemetry Bed
  needs to our CFO
• Completed another round of cost estimates for the
  potential costs of adding the 2nd Floor of
  Telemetry Rooms at a later date
• Investigated the Constructability issues of
  adding another floor in an occupied hospital

19
Success February 2004

• After presenting the Board with the facts that if
  our Growth projects are correct we will be out of
  Telemetry beds before the hospital initially
  opens and that the cost for the new floor will
  cost several M more.
• The Board Approved the Final Project

20
Lessons Learned

• Know your Board and their capacity to take on new
  debt
• Must Tie the Architecture and the Business Plan
  together
• Senior Leadership present positive Funding
  Methods

21
The Heart Hospital at SwedishAmerican
22
Current Project Status Open Spring 2006
23
Questions

• Open for Questions and Comments

24
End Presentation