Overview..

Definition of Program Categories.

    Transition.

    Investment

    Operational or Sustainment

Definition of Project Tasks.

    Promotion.

    Moving.

    Provisioning.

    Preparation.

    Project Management

    Dual Operations.

    Military Construction.

    Planning.

    Post-BOD Initiatives.

    Operations.

    Reclamation.

    Training.

    Certification & Commissioning.

    Phasing.

Copyright William Cross, 1996

Overview

Programming and budgeting a major construction or renovation project for a medical facility requires clear understanding of the tasks to be required prior, during and following the construction itself.  Defining the nature of the tasks and providing a list of task categories learned from past medical construction projects provides an assist to the manager in preparing such budget documents and numbers.  The following identifies the major fiscal intentions of actions undertaken to support a construction project and the categories of tasks that can help in preparing a list of budget line items.  This list was developed from the author’s experience supporting numerous military construction projects while assigned with the Army, and specifically with experience from the replacement project for Brooke Army Medical Center, Fort Sam Houston, San Antonio, Texas.

Definition of Program Categories

There are essentially three types of fund categories associated with a project: 

·         Transition,

·         Investment and

·         Operations or Sustainment. 

They are defined as follows:

Transition

Transition refers to those costs that are temporal in nature.  If the result of spending the funds will not be visible after the plant is in operation and the costs are not annually recurring following operation than they are most probably transitional in nature.

Include: Ceremonies, publicity, printing costs for brochures, initial stockage of wayfinding materials, renovation of historic art, videos, the hiring of a marketing manager or Public Affairs officer, project management overhead, dual operations, phasing, moving and preparation costs.

Those “plank” costs or costs that get you from and old facility to a new. These costs are short term and end shortly after new operations are resumed.

The removal and reinstallation of old pieces of Radiology equipment may be considered as Transition requirements.

Investment

This is the bulk of costs for any project and includes any costs required to move the facility from their present state of operations to the new project level of operations. These costs are an “investment” in technology and improved efficiencies.  This includes the construction funds themselves, all new equipment costs (not necessarily timely replacement of old items with in-kind new ones), training required to educate staff on the new operations to include DPW and Facility Plant maintenance crews, TDY for staff to observe operations of like systems, facility orientation days to educate staff as to the layout of the new facility, etc.

Information Management costs are typically considered investment and not transition costs except for the use of consultants to assist in planning or configuring (project management) of systems, installers to set-up new computers (hardware and software) or to cover overtime costs to the IMD staff to perform these functions. IMO costs are typically investment costs but must be budgeted for via some vehicle.  Items to be budgeted include: the network (nodes, cabling, cards, the UPS); workstations; systems (i.e. Clinical Information systems, paperless systems, CHCS, Telemedicine, tele-video management, remote sensors, patient monitors, nurse call, interior communication systems, Closed Circuit TVs, patient educational TVs, external communicators such as Emergency Radios, pagers, cellular phones and Office equipment (copiers, faxes, shredders, etc.).

Operational or Sustainment

Those costs that keep a facility operational on a daily basis such as utilities, grounds maintenance, a sprinkler system, a shuttle bus because of relocation, housekeeping etc.  Typically, these costs are expected to be higher due to potentially higher throughput levels, larger plant, and grounds.  Cost increases due to these reasons should be offset by medical operational savings from recovered outsourced workload and re-engineered operations that may include reductions in number of higher salary employees and substituting with lower salaried staff.

Definition of Project Tasks

Project tasks identify major stages or functional groupings of actions required to successfully build, occupy and operate the recent facility project. They are defined below.

NOTE:  While some project tasks are almost completely funded by one of the above program categories (i.e. transition paying for promotion), they do not necessarily have to be entirely investment, transitional or operational in nature.  And, at the present time, transitional funds are used to support several operating and investment cost items and tasks.

Promotion

All actions and costs intended to support the public education concerning the new facility, to include marketing materials, navigational guide handouts, and the dedication ceremony and dedication week activities.

Those actions that allay public fears about a move to a new or renovated facility. These actions ensure public satisfaction during the transition and educated the target market about the advantages resulting from the move. A goal is to increase market share to the facility of family member healthcare. It will promote future growth or changes to the way we do business by publicizing additional or new services. Promotional actions can help garner cost avoidance through CHAMPUS recapture and enrollment in TRICARE Prime. It is lastly an opportunity to look at your reengineering opportunities and innovative means of providing healthcare in a managed care environment.

Moving

Moving includes those costs directly attributable to moving from the old facility to the new. Such costs include: hiring a move contractor, or leasing trucks and the necessary equipment, boxes etc. to move using your own personnel assets, the costs to remove or reinstall old equipment from the old facility to the new, and damage control materials to protect the floors or walls in the new facility. You may also see some warehousing costs within moving costs if you must relocate equipment more than once.

Provisioning

Are those costs directly attributable to supplying and equipping a new or renovated facility.

All issues related to new equipment except the management aspects of the task which fall under project management.

The receiving and technical inspections of all new equipment. This may include hiring additional Medical Maintenance personnel or overtime for current staff.

The movement of new equipment from the warehouse to the new location to include installation. This may require a special team of installers to include plumbers and electrical workers.

A Stat work crew to perform last minute workorders prior to move in.

Asundrie provisioning items: Crews to install cubicle curtains, bumper guards on new beds, hang ceiling IV poles,  install needle boxes and personal injury protective gear.

Interior Design items - include placement of furniture and design services of contractors, artwork and installation of that art, signage and plants (artificial). Although typically Transition does not fund artwork, signage, furniture or decorative items. These items are either part of the project of MEDCASE/CEEP.

Supplies are those expendable medical supplies that typically are stocked on carts, shelves in supply rooms or linen which are required prior to patient care. A means other than completely stocking with new inventory should be explored.

Radiology Equipment - these items are not Transition but are investment costs that need to be identified and monitored. A certain percentage of Radiological equipment is included in MCA construction projects. The balance must come from the MEDCASE program. Costs for networked systems, digital radiology and wet to dry processing will have to be funded within the available program. A facility must develop a system to prioritize utilization of dollars on big ticket items.

Preparation

Costs associated with preparing the healthcare facility to receive patients.  Costs should include all pre-cleaning requirements to include at least three pre-cleans - whether via contract (current contractor or new) or in-house staff.  Pest control is also included in this task.  Look for hidden preparation costs i.e. cleaning of the mechanical rooms, the interstitial space and sealing of special floors i.e. brick.

Pest Control is the requirement to perform an initial fumigation of any pests identified.

Project Management

This covers the primary functions of the Health Facility Project Office and the Transition Operations Center (TOC) plus any other management tasks incurred by the other departments of the facility.  Included in project management are any manpower to prepare the MEDCASE documents, develop specifications, work with contracting and enter the equipment on the new property book.  Contracts such as logistical support for developing contracts documents (identifying equipment needs, inventorying on-hand and comparing to JSN requirements of the project) are all considered project management.

Transition Operational Management - these are the costs directly related to developing a Transition team and the Health Facility Project Office if these entities will exist. Costs include temporary personnel costs and overtime, supplies and equipment for the offices, offices if needed, utilities, grounds maintenance and housekeeping and transportation i.e. a van or truck to move equipment and supplies and project site visitors.

Dual Operations

This is the requirement to operate two physical plants at the same time during the occupation phase covering the period from beneficial occupancy date (BOD) through facility operational date (FOD).  This may include overtime or temporary personnel such as security guards, housekeepers and safety inspectors. Utility costs may be considered here also.

Military Construction

This is the basic construction task and includes all construction funds with the exception of category E equipment which is funded by construction but is considered part of the provisioning process.

Planning

This function supports any planning actions not directly related to the project management process but which is generated by the fact that the project exists.  Such actions would include master planning the backfill plan for the old facilities, or performing re-engineering processes that are not project driven but due to timing become linked to the project and subsequently begin to effect project decisions.

Post-BOD Initiatives

As the result of the project several needs and initiatives may be identified that are not required to execute the construction, occupation or operation of the facility, but which would enhance continued operations.  Examples may include expansion of specific functions based upon mission changes, enlarging the parking lot, adding new capabilities to room functions, installing new information systems that were not originally part of the project scope but which are identified by the facility as required for effective and efficient operations.

Operations

This is the basic task of operating the facility once the staff have moved and fully occupied the building.  Costs for this task would include sustained maintenance of the physical plant and all its equipment, medical operating expenses (which may be higher or lower depending on how effectively the facility organization re-engineers itself to best use the new physical plant), housekeeping and grounds maintenance, supplies inventory, staffing, and planning actions that should be normally occurring (basic strategic and planning), etc.

Reclamation

The tasks supporting the closing and turning over of the old facility(ies). Such costs include security, utilities, movement of old equipment to DRMO or another facility, and temporary manpower or overtime to perform these functions.

Training

The initial training of staff to work on new equipment or systems. Training includes costs to perform mockups, to lease a training center, dollars to pay contractors or consultants to perform training on-site, registration fees and some TDY costs.

Certification & Commissioning

Those tasks and costs related to testing and making the building systems work. Many of these costs may be included in new maintenance costs or as part of the construction contract.  Some potential costs may include fuel to test the generators, parts and labor. The hiring of key control officer and locksmiths to install all new cores, hiring safety consultants to develop safety hazard assessments for all the functional areas, external organizational assessments (JCAHO, fire experts, etc.).

Phasing

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