L’Ospedale Nel Terzo Millenio

1. L’Ospedale Nel Terzo Millenio • Major Investment Planning • for the Hospital Sector • Barrie Dowdeswell • European Health Property Network

2. The agenda Three themes • European perspectives on capital investment • Trends in hospital investment • The changing role of the hospital in a regional health setting Context - Regional devolution is now the principal tool of reform in healthcare throughout Europe

3. European perspectives - as we enter the third millennium – investment priorities Needs between 8% and 12% of total health spend p.a. • Most countries have not been replacing outdated hospitals quickly enough - but replacement will now be very different • Governments are reconsidering the historical focus on acute hospitals for healthcare • There is increasing emphasis on alternative capital investments in local communities • Chronic care • Aged care • Mental health • Public health • Local community diagnosis

4. European perspectives – money supply • State ‘capital’ money is in decline • Increasing dependency on ‘private & commercial money’ • All loans for capital will need to be financed out of hospital income - which will be dependent on payment by results • Capital investment is now moving into the risk category – and banks have much tougher borrowing standards • Hospitals will need to adopt business standards for capital management

5. European perspectives - capital and population health A strong sustained trend towards some form of regional structural planning / regulation • Responsiveness to the changing needs and values of citizens - giving people a say in local priorities • Using disease management (care) programmes to plan and implement change • Using new technologies to make care more widely available • Applying these techniques to rationalise services and health infrastructure Many governments are moving from being providers to regulators of healthcare

6. Population Health - Sustainability “shifting health systems away from the current emphasis on acute care towards improved chronic and long-term care, in response to the transitions generated by epidemiological and demographic changes, will be essential in sustaining a balance between affordability and the principle of universal access” Alexandre Kalache, World Health Organisation Netherlands Presidency – ‘Shaping the EU Health Community’ September 2004

7. The third age (transition) in healthcare Morbidity Compression Co- Morbidities Care Community, Lifestyle Re-emergence & revitalisation Diversity Hospital Hospital Public Health - 1950 Acute Care 1950 - 2005 Chronic Illness 2005 - Aged Care 2010 -

8. Hospitals

9. Patterns of change – delivering the new hospital agenda Three distinct models • The centralist (national or regional government) structure planning systems • Northern Ireland • Skane Region Sweden • Tuscany • The free markets – largely insurance fund based • Netherlands • Slovakia • Artificial markets • English NHS • Germany – the privatisation of public hospitals There seems to be a strong trend towards free market principles for hospital provision Many governments are making it easy for new specialist operators to challenge public hospitals

10. Best in class new hospital models – service led emphasis • Hospital design based on care models – care pathways – to improve the relationship between the workforce and the working environment • Effective clinical governance – clinical outcome and safety audit to reinforce pathways • A strong integrated quality ethos - including high level focus on new threats e.g. opportunistic infectious disease • A premium paid for designs that • Are adaptable • Enhance workforce effectiveness and safety • Create a healing environment • Maximise the potential of new technology This will create new challenges for safety and complex engineering technology

11. Best in class – business emphasis • Risk management of capital investment • Ability to service capital debt • Ability to meet and finance changing need – over ever shorter timescales • Workforce responsiveness to change • Capital financing models that provide long-term flexibility • Leading examples – service and business effectiveness • Sittard Netherlands • St Olav Norway • Hospital la Ribera • Spain • Rhon Klinikum Germany • Coxa Finland • Northern Ireland • ITALY – you may decide

12. Example - Service led-design Average public hospital cost per case - Euro 3,870 Average RK hospital cost per case - Euro 2,660 Rhone Klinikum Multi-disciplinary Team working Public hospital capital element E 270 RK hospital capital element E 722 Technology phase Level 1 care Level 2 care Ambulatory follow up Rehabilitation Progressive (care pathway) patient care

13. Example - Service-led adaptability • Utilising technology to manage care transitions • Widening the scope of care pathways Digitalised Information Transfer systems External hospital networks Technology transfer to other settings Digital follow up Rehabilitation Level 1 Level 2 ‘Agile space’ Digital Portal (community) Technology phase R.K. completely refurbish all company hospitals on a 10 year cycle – technology according to return on investment, based on Quality & Cost Effectiveness

14. Care pathways - European evidence • The twin aims – • Hospital design and operational effectiveness improved by internal treatment (care) pathways • Contributing to population based integrated disease management pathways. • A care pathway is an evidence based prediction of the treatment plan for patients with similar diagnosis – it provides a focal point for the planning and allocation of resources, measuring effectiveness and auditing outcomes – it is also a risk management tool EuHPN EU 17 Country Survey – There will be a rapid and significant growth in patients treated within care pathway-based protocols – an increase from 5% to 60% within 5 years Despite the clinical, quality and planning benefits there is little evidence that capital planners / designers understand or use care pathway models in State health systems

15. Some observed effects of cost-led capital concepts for new hospitals • Hybrid capital models • Tendency towards standardised (low cost) benchmarks resulting in poor design (there are some exceptions) • Appears to inhibit the effectiveness of the crucial triangle of - workforce - work systems – design • Underinvestment in technology • Project decisions are often remote from the workplace • Cost pressure is weakening commercial interest In the 1970,s the built environment represented 75% of project cost Today technology represents 75% of project cost

16. Capital models and effectiveness preliminary EuHPN survey hypothesis PPP Workforce shares PPP Public shares Independent Not for Profit PPP Conventional Public Procurement PFI • Dominant influence on • effectiveness • Scale of care pathway • based planning • Degree of clinical • workforce • engagement • Supportive capital funding models * * Models * * Co-relation to Hospital Infection Rates ? * * low high Sustainable lifecycle effectiveness clinical and utility

17. Example – design and hospital infection risk, survey of new hospital projects Single room ratios – confidence parameter between 50% and 100% ref. EuHPN international ‘expert report’ • Service led models – achievement well above minimum standard • Cost-led models – almost all fell well short of confidence parameters Some countries e.g France, Finland, Italy already have a strong cultural disposition to ‘privacy and family rooms’

18. Capital investment in the future is about – risk management • Clinical risk – changes in technology and models of care • Workforce risk – availability, change management • Demand risk – markets, consumerism and healthcare transitions e.g. chronic care • Political risk – policy shifts, public opinion • Financial risk – debt servicing and capitalisation Implicit is health and safety risk There will be a new and sustained focus on cost benefit analysis

19. Risk management and Design The key is the adaptable hospital and its place in society • Elasticity – demand volatility • Functionality – changes in service type • Sustainability – lifecycle economic value • Transferability - technology platforms for knowledge and treatment exchange • High value sustainable design impact The future effective lifespan of most modern hospitals will be around 10 years Refurbishment and adaptation may be the new growth area for capital

20. Regional structural planning

21. Why we need structure plans • Healthcare is not a commodity it is a fundamental societal value and right • There is a continuing need to ensure equality and accessibility across populations • There needs to be controlled management of policy shifts e.g. • Transferring more care into local community settings • more progress on hospital rationalisation and role delineation – this should not be a provider led exercise • Maximising the benefits of scarce resources Pooling and sharing resources within economic population groupings is the best way of avoiding cost-led damage to hospital investment

22. The evidence for structural change in acute hospitals is compelling • 8% of average daily acute bed usage can be saved by better primary care / hospital integration • 10% can be saved by concentrating specialist expertise e.g. hip replacement • 15% to 20% can be saved by providing better chronic illness support in the community • On average there are between 5% and 15% of patients awaiting discharge because there are inadequate community facilities Most of these inefficiencies will be overcome as integrated care pathways are introduced This evidencepoints to a continuing decline in acute hospital beds This does not take account of the long-term benefits of knowledge transfer and new public health investment – the health campus resource

23. There are plenty of integrated structure models – changing the psychology of care The benefits of the best centres of excellence – delivered locally Regional knowledge centres ICT based technology, information and knowledge pathways Community hospitals Specialist centres Polyclinics Community resource centres Technology based equality of care for all citizens Home support E health Population size 1 1 million

24. We need structural coherence Hospital free for all OR Structural frameworks Acute networks Core services Chronic care contestable choice ‘tariff’ based contracts Markets Cataracts Hips

25. Making the capital system work better • Note: • Most countries have one dimension • Some countries get two out of three right • Few countries match three out of three • The issues - • balancing hospital autonomy and efficiency • and incentivised regional frameworks Structural planning systems and frameworks balance and equity Work process based hospital planning and design Capital financing and procurement models A need for strong synergies between the systems, and mutual confidence and accountability between the agencies

26. Conclusion - Investing in societal capital “Strategic capital asset planning and investment maximizes the performance of fixed, physical or capital assets that have a direct and significant impact on achieving corporate objectives. Companies and organizations depend on vital assets to drive their business; however, they often see them as individual, stand-alone objects operating independently. In reality, companies are a collection of strategic assets that exist as a single system.” Harvard Business School - capital investment symposium, 2003

27. Health, the State and the economy genetics lifestyle productivity education labour supply HEALTH healthcare education capital formation wealth environment other socio- economic factors ECONOMIC OUTCOMES McKee et al LSHTM

28. Grazie per la vostra attenzione barriedowdeswell@aol.com www.euhpn.org