Designing the Academic Health System of the Future: Facility Planning Considerations

Dan DeBehnke and Lindsley Withey, The Governance Institute

The challenges academic health systems (AHSs) face — from margin erosion to increased consumer expectations around access, convenience, and the patient experience — are daunting, but they also present tremendous opportunity. How can AHS leaders strategically position their organization not only to survive in a transformative environment, but also thrive? One critical place to begin: designing the AHS facility and network of the future.

The factors that have contributed to AHS success in the past — such as their affiliation with a medical school and university, strong research capabilities, and the ability to provide high-end clinical care — could also be hindering operational performance. Research shows AHSs trail non-AHSs across cost and quality measures, with costs per case that are 5.8 percent higher. Meanwhile, operating margin pressures are forcing AHSs to explore new revenue streams to ensure survival.

These are just some of the reasons why facility and network planning is a strategic exercise AHS boards and leaders must embrace to determine their path forward. It’s a process that enables leaders to determine how to allocate scarce capital resources to meet the changing expectations of consumers and adapt to the shift toward lower-cost settings for care. Facility planning also offers the opportunity to forecast the community’s healthcare needs, gain an honest assessment of the organization’s ability to compete in its marketplace, and evaluate the steps needed for future success.

Learn about the key considerations that will guide decision making for board members and senior leaders in this article from Guidehouse’s Dan DeBehnke, MD, and Lindsley Withey. 

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