The Bridge

Providers have new facility planning priorities—and cost isn't the top concern. Here's what is.

by Viggy Parr Hampton, MPH and Lindsay Conway

We all know provider margins are shrinking and that hospitals are looking to cut costs wherever possible. So it would seem that cost would be the number one factor driving hospital capital purchasing decisions, from equipment purchasing to facility planning.

Except in the case of facility planning … it isn't.

What providers prioritize in capital planning

As a part of our capital planning research, the Facility Planning Forum (FPF) surveyed provider leaders involved in capital decisions (e.g., COOs, Directors, VPs, etc.) at a variety of health care organizations to better understand their request for proposal (RFP) processes for facility projects. Among other things, we asked providers about their top three considerations when evaluating RFP submissions now and five years ago—and the results were surprising.

Like facility planning firms, we expected that hospitals would place cost as their enduring number one priority. However, as we see from the results in the graph above, our expectations did not align with reality.

Five years ago, cost was indeed the top priority for providers fielding RFP submissions for new building projects and renovations. Today, cost is still important (making the top three in 50% of responses), but taking its place in the number one spot is health care knowledge and expertise—and the gap between the new number one and number two is considerable: a difference of nearly 30%.

Other priorities have shifted in the last five years. For example, the majority of the decline in the importance of cost is attributable to the rising importance of facility design to improve workflow and efficiency.

Why? As the rise of value-based care pushes providers to refocus their efforts on patient experience, staff satisfaction, and operational efficiency, health care organizations are placing less emphasis on the cost of a new facility now, and more emphasis on the incremental cost savings they’ll accrue over time from an efficient, well-designed facility.

What do our findings mean for facility planners?

In short, the re-prioritization suggests that providers are focused not just on cost, but on the overall value that the facility planning team can bring to the organization. The design teams with the most health care expertise and experience will fare well, especially if their submissions showcase solutions to improve workflow and attract patients.

These data are just the tip of the iceberg—our surveys and interviews revealed surprising insights about providers' RFP decision-making processes that could have considerable implications for your future RFP submissions. To learn more about the future of the RFP, join us on Wednesday, September 12, at 1:00 p.m. ET for The New Era of Capital Decision-Making for Facilities, a live webconference and Q&A that aims to answer all of your lingering RFP questions.

Learn more: 5 new decision makers driving patient traffic—and how to win them over

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