VALUE-BASED BRIEFING, DESIGN AND MANAGEMENT OF HOSPITAL BUILDINGS

misbe2011 Tracking Number 27

Corporate or Public Real Estate Management is usually defined as the management of the real estate portfolio of a corporation or public authority by aligning the portfolio and services to the needs of the core business, in order to obtain maximum added value for the business and to contribute optimally to the overall performance of the organization. Recent paper explores the concept of adding value by real estate and related performance indicators in connection to organizational goals and objectives, and the way it is or could be applied in value-based briefing, design and management of buildings. The conceptual framework is being illustrated with research findings on hospital buildings. In the Netherlands, healthcare real estate is increasingly perceived as a strategic resource due to alterations in healthcare legislation and finance system. During the last decade the government transformed the old budgetary system into a so-called regulated market system. In the former system the proposal for a new hospital building or renovation of an existing building had to be approved by the government to fit with the planning regulations (number of beds per 10,000 inhabitants), the maximum number of square meters per bed or per function, the maximum budget for investment costs per square meter, and permit requirements laid down in the national Building Code. After approval all running costs related to the building were guaranteed by the government and paid by the insurance companies during the life-time of he building, independent of healthcare production. In the new system hospital organizations have to reimburse all real estate investments by production of healthcare products and services i.e. treatment-diagnosis combinations. Decisions on hospital real estate have a strong impact on organizational performance, both with regard to benefits such as creating a healing environment, satisfaction of patients, employees and visitors, labor productivity and image, as with regard to the costs of health care delivery and real estate life cycle costs. Political decisions, demographical and economical developments, innovations in medical technology and a continuously changing market of demand and supply are all part of a dynamic and unpredictable context, whereas healthcare real estate decisions have a long term impact. The ever changing context with new opportunities and risks and the involvement of a growing number of stakeholders necessitates to changing traditional hospital real estate management into a more businesslike and integrated approach. Although most healthcare organizations are aware of the necessity to change, many of them lack sufficient knowledge and tools to steer on the added value of corporate real estate in connection to organizational performance. Based on literature review, interviewing stakeholders, analyzing documents such as strategic accommodation plans, findings from Msc graduation projects and a PhD study into hospital real estate strategies in a changing context, a conceptual model is presented that links organizational objectives and possible added values of real estate. The research findings show how different hospitals prioritize different added values, depending on their overall organizational policy, its position in a network of health care providers and local context. A number of added values is elaborated on by opening the black box and showing which real estate interventions may cause a positive effect on patient satisfaction, labor productivity, marketability of the building and competitive advantage. The conceptual framework and research data may be used to support complex decision making in briefing, design and management of hospitals and other health facilities.