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The 70:30 Rule for Healthcare Facility Planning And Transformation

By Joseph Kucharz, Dave Brown

March 27, 2019

The 70:30 Rule is Ankura’s rule of thumb for hospital mega projects honed through decades of construction planning and project experience, and a simple method to drive operational effectiveness and change. This simple rule can also be of significant value to any healthcare facility seeking to improve both patient and medical staff experience, as well as implement systemic process improvements.

Essentially, when an organization is in the operational planning phase to renovate or construct a facility, 70 percent of the changes sought by management are implementable through process improvements within the existing facility.

For the remaining 30 percent, there are either impediments in systems, the organization, or the way the building was initially constructed that cannot be feasibly or economically resolved. Therefore, undertaking a renovation of the existing facility or new construction would better accomplish the operational change desired.

“In an era of healthcare reform in which providers must do more with less, healthcare executives are encouraged to first develop a future state that defines new operational flows, processes, and more efficient staffing models,” says Joe Kucharz, Managing Director at Ankura. “This is where we have seen hospitals have the most opportunity for the most significant transformation.” For example, hospital management is seeking operational changes within its emergency department (ED) to increase capacity. The initial facility plans may be composed of renovations to build more ED stations. However, using the 70:30 Rule, the facility planning team would review its organizational throughput processes relative to emergency care. Those throughput issues may manifest themselves in the bed tower, where patients may not be discharged in a timely way, leaving incoming patients waiting in the ED, unable to be placed in rooms.

Evaluating and improving that inpatient throughput issue essentially improves capacity within the existing ED. Moreover, the result is a very good example of an operational process improvement – the hospital nets an improvement prior to needing to attack the 30 percent of the equation, the physical renovation.

“Organizations following the 70:30 Rule focus around 70 percent of transformational changes on improving an existing medical facility’s system through process improvements,” adds Dave Brown, Managing Director at Ankura. The remaining 30 percent of transformational change focuses on physical renovation or new construction”.

Let the operation plan drive the facility solution. If you don’t, you won’t see the transformation you seek.