Bisnow's 4th Annual Boston Healthcare Summit: Take I

Healthcare faces unknowns: the economy, the Affordable Care Act and declining reimbursements. (And whether someone will finally develop a pill to let us live forever.) But Boston's medical institutions are investing billions in new buildings while their architects and builders are streamlining development, according to the experts at yesterday's 4th Annual Boston Healthcare Summit at the Westin Waterfront. 

They discussed cost-cutting by consolidating downtown operations while expanding in the 'burbs; employing new technologies, lean development techniques and constructing new buildings to promote greater operational efficiency. (You probably don't want a lab that's older than the disease you're studying.) The panel: moderator Goulston & Storrs director Darren Baird, Cushman & Wakefield executive director of the medical/academic practice Frank Nelson, Spaulding Rehabilitation Hospital prez David Storto, Brigham & Women's Health Care VP finance and real estate Vinnie McDermott, Boston Medical Center VP facilities Bob Biggio, Suffolk Construction VP healthcare Tony Nigro, and Steffian Bradley Architects CEO Kurt Rockstroh.

There are benefits to leasing space, says Frank. Healthcare providers can sign-up for back office space that's far enough off the main campus to be economical but close enough for staff to still feel like part of the mission. Frank recently did a deal in which 50% of the TI went back to the hospital for technology, which will continue to be a game changer in the industry. At Spaulding's new $225M hospital in Charlestown designed by Perkins + Will--sustainable and universally accessible--it will help cut costs by delivering more care at home and by providing more mobile devices that minimize the time-skilled pros spend running and fetching. (Robot doctors are coming, folks, and they will not need lab coats.)

Instead of leasing, Vinnie (with NBBJ's Samantha Lucas and Kerrianne Graham) says that Brigham & Women's expects savings on rent of $180M over 20 years by developing its own $500M, 600k SF Building of the Future in the LMA. It also could cut the cost of operations by consolidating in one location various neurologial services now scattered in old, inefficient quarters. (Talk about a scatter brain.) It's also projected to boost the efficiency of care delivery in clinics from 45% to 65%. This means physicians will have to change how they practice; something they've agreed to but still must implement. Another cost-saving strategy: push cases from the LMA out to local communities.

BMC will save $25M to $30M a year with the $270M consolidation underway of two nearby campuses, Bob says. With a footprint that's 350k SF smaller, it will save on expenses like energy and ambulance service between the two campuses. Once the building opens, a big challenge will be making sure it operates as intended. The new sustainability report card the City is instituting will be a difficult process to adopt but will reveal important information, he says. (Though it's still gonna be a pain getting your parents to sign it.) A simpler but still significant tactic: the new food and cooking demonstration kitchens will help prevent childhood malnutrition that leads to illness and sick visits.

To deliver the facilities that healthcare providers want with more technology, flexability and connectivity, a firm like Suffolk Construction has to build the right kind of project team with all the players: owner, architect, designers, engineers, and other subs, Tony says. To keep costs down, the team works from Day 1 to stay within a 2% swing of the budget. When they add Integrated Project Delilvery, it reinforces the relationships to further enhance collaboration. Tony says that LEED certification has served an important purpose by getting facilities managers talking and thinking about greener buildings.

Charles, seeking city approval to build a new clinical building in the LMA and an office, retail and garage facility in the Fenway, says hospitals are going in two opposite directions at once. They're trying to cut back by adopting more lean operations. Children's also plans to spend about $1B over five years to improve technology. A plus of the ACA, it's rewarding hospitals that adopt more efficient electronic record keeping. (That way the ink doesn't bleed when you spill your coffee.) At the same time, it's expanding by building facilities downtown and by growing their network elsewhere. In October, Children's acquired facilities in North Dartmouth and expects to add some in New Hampshire in the next year or two.

In designing, the development team benefits from working out of the same office, at least part-time, and under IPD (or IPD-light) agreements, according to Kurt. Owners gain deeper insight into how new spaces will function when the architect provides real-scale mockups the users can walk through. Otherwise, some clients have difficulty visualizing how plans will translate into reality. Kurt says it's the only way they really understand what they're getting. LEED has transformed from a cutting-edge idea into standard operating procedure. For Steffian Bradley, their baseline building is LEED silver, Kurt says.

We'd also like to thank our sponsors--Newmark Grubb Knight Frank, Suffolk Construction, Steffian Bradley Architects, RDK Engineers, JACA Architects, NStar and Cushman & Wakefield--for making this great event possible. Stay tuned for more coverage Tuesday.