Best Practices: How Lean management can slash hospital construction costs

Four years ago, the leaders of Akron (Ohio) Children's Hospital faced a pressing question as they began planning a new facility to house their neonatal intensive-care unit, outpatient surgery and other growing service lines. Should they undertake such a major capital project through traditional design and construction methods, or take a risk and try a new approach that could save money and produce a better result?

The hospital had been using Lean Six Sigma process-improvement methods to boost quality and reduce waste in its clinical and business operations since 2008, even sending some employees for Lean training at Johns Hopkins Medicine. Using a Lean approach to the design and construction of a facility seemed like a logical next step, said Bill Considine, Akron Children's longtime CEO.

“We knew if we did it right, we could put a building up for 20% less cost without sacrificing anything,” he said. “We said, 'Let's do it and let's not second-guess ourselves.' ”

What they ended up with was a seven-story, 369,000-square-foot facility known as the Kay Jewelers Pavilion, completed two months ahead of schedule at a cost of $180 million, $60 million under original cost estimates. “It exceeded all of our expectations,” Considine said.

While most hospital leaders still opt to construct new facilities in the traditional way, a growing number of hospitals are turning to Lean principles to guide building projects, said Dan Heinemeier, executive director of the Lean Construction Institute, a not-for-profit based in Arlington, Va. “It's a natural progression because so many of them are using Lean in their hospitals already,” he said.

Akron Children's began by assembling a team of companies that would work on the project, including Dallas-based architecture firm HKS and the Boldt Co., an Appleton, Wis.-based construction manager. Both firms have expertise in Lean principles. The hospital's leaders also chose Welty Building Co. and Hasenstab Architects, both based in Akron, to work collaboratively on the project.

“Our local contractor and local architect had not done Lean projects before, so it was a huge learning process for them,” said Linda Gentile, Akron's Children's vice president of construction and support services. “One of our goals was to educate our local trade partners so they could support us in future projects.”

What differentiates Lean projects, Considine said, is the focus on collaboration and extensive planning long before construction begins. That collaborative process included not only hospital leaders, architects and contractors, but also front-line clinicians, patients and their families. “The key to this process is the front-end planning,” he said. “It looks like you're not doing much of anything for a long time. But actually, you're doing everything.”

In a local warehouse, the team built full-scale cardboard mock-ups of each floor of the new facility. That allowed clinicians to simulate patient-care scenarios and see firsthand whether the planned spaces worked well. The design and construction team then was able to make adjustments that improved patient and staff flow.

Based on those simulations, the decision was made to construct six operating rooms rather than the proposed eight—at a substantial cost savings. The design team also changed the placement of emergency department entrances to avoid congestion, created alcoves in hallways to keep equipment out of the way, and added windows to provide plenty of natural light.

Boldt and the other companies negotiated shared pay and incentives ahead of time, said Dave Kievet, a Boldt group president. That way, any additional expenses raised the hospital's total bill but provided no additional profit for the companies.

The design and construction team was able to trim more than 34,000 square feet of building space from the original plans, he said.

Once construction began in mid-2013, the workers used the so-called train-car method to ensure the building process flowed smoothly. Each floor of the facility was divided into four sections, and a single crew—for example, electrical—worked exclusively in one section, performing a predetermined amount of work per week. “We tried to pace the project so it moved as fast as the slowest worker and we could avoid stops and starts,” Kievet said.

The process was not without challenges, especially because it entailed such extensive planning and collaboration among so many different groups. “But it was worth it,” Gentile said.

The new facility opened May 5. “We're so pleased with the end result,” she said.