With M&A activity continuing to grow in health care, many newly formed health systems find themselves left with duplicative facilities and services catering to the same population.

“As the pressure to control costs increases, this is a real challenge for health systems,” said Craig Acosta, senior partner and director of Kurt Salmon’s Facility and Capital Assets Practice. “The right strategic direction can actually enable the system to cut costs and increase capacity.”

A major regional referral center and Kurt Salmon worked together to address this problem and ensure the center is well-positioned for the future.

Issue: An acquisition left the referral center, a nearly 800-bed regional medical center in the Southeast, with two campuses right next to each other, separated only by parking lots. The first campus had inpatient cancer care, psychiatry, some general medicine and surgery beds, vascular surgery, and some diagnostic and support services. The second campus had more than 500 of the system’s nearly 800 beds, most of its operating rooms and key diagnostic and support services, plus the emergency department, an outpatient cancer center, and all other key service lines.

The physical separation between the two campuses presented significant challenges—about 11,000 one-way patient transfers between campuses every year, duplication of support services, patient confusion and dissatisfaction due to vast differences in quality of the physical environments, and disparate utilization of capacity due to physician preference for one location over the other.

As this organization prepares for changing demographics—like an aging population and increasing comorbidities—that will increase future demand for services, and the potential reimbursement impacts of the Affordable Care Act, it was determined that both campuses should be consolidated into a single campus.

Solution: We helped this hospital make this goal a reality by developing a strategic master facility plan for clinical integration through physical consolidation of the two campuses. This started with extensive interviews of executive and service-line leadership, physicians and patients, and a deep assessment of existing facilities on each campus. In close coordination with all constituents, the Kurt Salmon team completed 10-year volume projections that were translated to future room and square footage needs for the referral center.

Using those projections, we developed a master plan that includes a consolidated campus with the capacity for over 900 inpatient beds to accommodate future growth; a new 84-room emergency department with an 18-bed clinical decision unit; an interventional platform that integrates operating rooms, cardiology, cath/EP, interventional radiology and endoscopy; a distinct identity for the women’s and children’s hospital; and right-sized clinical and nonclinical support services. After the board approved the master plan, we helped complete functional and space programming for the new building and backfill areas.

Results: As a result of the project, which was finished on time and under budget, this major regional referral center will be able to accommodate up to a 3.5% annual increase in its surgical caseload, a 25% increase in discharges over a 10-year horizon, and a reduction in unnecessary and duplicative costs from operating in two distinct facilities.