At a time when economic worries and budget limitations for facility expansions may start to squeeze the healthcare industry, Lean processes could very well be the industry’s answer-and lifeline-for designing and constructing new projects in the future. Hospitals are always looking for innovative ways to balance the need to expand and modernize their facilities in the wake of rising healthcare costs and shrinking budgets, but the challenging economic times ahead could add a sense of urgency for hospitals to “lean” their operations in 2009.

Over the last few years, healthcare industry leaders have been watching and learning, making much needed course corrections on how future healthcare projects are designed and constructed. After all, hospitals are a custom product. They need to be delivered in a timely fashion and within budget. The hospitals of yesterday will not meet the growing needs of today if the challenges of complex designs, project durations, technology changes and limited resources are not met. That is precisely why hospitals in growing numbers have turned to Lean design.

Lean Project Delivery (LPD) seeks to create more value through greater efficiencies and less waste. Applied to healthcare facility design and construction, Integrated Lean Project Delivery (ILPD) includes a contractual combination of LPD and an integrated project team consisting of the owner, contractor, and architect.

Sutter Health, an integrated nonprofit healthcare system in Northern California, has been an early adapter and champion of ILPD. This project-delivery approach integrates people, systems, business structures, and practices into a process that collaboratively harnesses the talents and insights of all participants to reduce waste and optimize efficiency through all phases of design and construction. To date, Sutter Health has completed several projects using ILPD. The process has increased performance in many areas, from design and construction of new facilities to healthcare operations and patient care.

The difference in design

ILPD starts with a new philosophy of teamwork and a new contract that calls for collaboration and shared risk, a great motivator. The Core Team comprises individuals representing the owner, architect, and contractor. The Core Team is then supported by an Integrated Project Team of architects, engineers, contractors, subcontractors, and the owner. The leadership Core Team and the IPD Team work together to design a project that optimizes the whole, rather than the individual pieces.

The power of this approach is derived from the Toyota Production System as elucidated by Michael Kennedy in his book, Product Development for the Lean Enterprise. According to Kennedy, Toyota doesn’t manufacture automobiles-it manufactures knowledge about automobiles and applies it. Similarly, the knowledge-based design platform focuses on a few cornerstone principles centered on the flow of knowledge: streamlining the communication of complex issues, generating sets of alternatives, clearly defining the metrics of success, and letting the innovation come from everyone on the team, as opposed to a lone genius. It supports a collective culture of innovation and creativity.

A key cornerstone of knowledge-based design is set-based concurrent design, which eliminates waste and added costs created by traditional point-based design. Set-based design involves studying multiple design concepts and collapsing the sets over time as confidence around a single solution builds. Teams of architects, contractors, and clinical management staff might study multiple sets of inpatient care designs, nurse station designs, or mechanical system designs, with each team evaluating these sets against risk. In the end, the teams select the best combination of designs. The goal is to not make premature design decisions-the teams establish feasibility before they commit. Set-based design allows healthcare designers more freedom, innovation, and a proactive selection process for desired attributes, which often results in lower costs, better harmony, and sustainability. It also saves time and money since it reduces the need for redesigns. However, this approach can also prove challenging because it involves working with more team players and more opinions.

Construction: The proof

Since Sutter Health launched its first projects utilizing the Integrated Form of Agreement (IFOA) in 2004, we now have several completed facilities to study. The Fairfield Medical Office Building (figure 1) was an early implementation that tied the owner (Sutter Health), the architect (HGA), and the general contractor (Boldt Construction), into an interrelated contractual relationship. The architect and contractor combined their respective contingencies together and were held jointly accountable for all design and construction errors and omissions. This incentive meant collaboration and united problem solving based on relationship, as opposed to adversarial teams found in traditional design-bid-build delivery. The ILPD process for the Fairfield Medical Office Building demanded regular meetings to communicate and discuss issues, discover options, and find the best solution to optimize the project as a whole. Building Information Modeling (BIM) was utilized from the outset, which provided the teams with a crucial level of coordination and problem solving. Target costing also contributed to the project’s on-budget success, since the design team set the target cost for each system and then designed for that particular target. The team managed the transition from design to construction, ensuring the target cost was never exceeded. Additionally, last planner scheduling allowed the team to obtain reliable promises. Scheduling tools gave the team the ability to set milestones, specify handoffs, make readies, collect promises, measure results, and then, if needed, correct possible failures.

The 69,000-square-foot, three-story building was designed and completed in only 25 months. The project also finished under budget, despite the fact that additional exterior canopies connecting the campus buildings were added during construction (figure 2). The final cost per square foot (excluding site work) was estimated to be around $60 less than similar projects in the region, according to the contractor. Sutter Health had money returned to them as a result of the project running under its expected Guaranteed Maximum Price (GMP).

Is ILPD right for your project?

The Fairfield Medical Office Building was one of the first ILPD success story for Sutter Health, and more are expected to follow. ILPD has already caught the attention of many healthcare leaders, since it can be applied to projects of any scope and size.

Some issues, however, should be considered before embarking on an ILPD agreement. In order for an ILPD project to be successful, all parties must be willing to commit to a process that will ultimately change the way they normally conduct business. This buy-in must be agreed upon up-front, and leadership and experience with implementing ILPD must be demonstrated by the architect, owner, and contractor. If this is the first ILPD project for the team, they might consider employing a more experienced consultant to help coach them through this new methodology.

The “ILPD Way”

ILPD, along with Lean construction, has contributed to successful project outcomes not only for the owner, but for the contractor and the architect as well. The investment in up-front discussion, collaboration, detailed planning, ongoing communication, as well as shared responsibility and risk has created an atmosphere where teams truly do work together in a better way. The “ILPD Way” can help create a healthier work environment where stress is decreased, laughter can be heard, and people can stand together and take pride in their shared accomplishment.

Certainly, the next few years will look leaner as more healthcare providers search for creative ways to build newer and better facilities with smaller budgets. In the future, ILPD will not simply be considered a healthcare design trend, but an industry standard. By eliminating waste in the system and lowering operating costs, resources can be applied to areas that add value and create better outcomes for patients. HD