Nowhere in the nation do the three components of healthcare’s Triple Aim—better patient experience, better health of populations, and lower per capita costs—become more visible than in rural communities. Local hospitals play an important role in improving health and managing healthcare and patient costs by providing primary care, diagnostics, and outpatient services directly to their constituents. In reciprocal fashion, these facilities, providers, and users contribute substantially to a rural community’s economy. But sustaining local healthcare is arduous: It’s not easy to recruit top physicians to rural areas, and patients often migrate to more urban healthcare centers for perceived better care. Additionally, small communities rarely have access to the finances necessary to build and sustain facilities outfitted with modern medical technologies, procedures, and equipment. In an era of increasingly limited resources, how can healthcare design professionals create and deliver facilities that achieve the Triple Aim? Coquille Valley Hospital in Coquille, Ore., provides an example of what might be accomplished.

A community vision
High up an Oregon coastal hillside, among former log mill director home sites, stands the original 1969 Coquille Valley Hospital (CVH). Built by a consortium of three regional logging mills for the care of their employees and families, this rural critical access hospital has been modified considerably over time to include outpatient diagnostic and surgical services. The facility serves three aging communities: Coquille, Myrtle Point, and Powers. Key stakeholders at CVH wanted to ensure their community had a hospital designed to meet and evolve with its growing outpatient and inpatient care needs. They also needed an attractive recruitment tool for new physicians, as several of the hospital’s doctors were prepared to retire. The vision was a hospital capable of providing the Coquille Valley communities with sustainable, local, quality healthcare, featuring new medical procedures and technologies, and the most respected physicians in the region.

To accomplish that vision, CVH enlisted three advisers to help with the initial planning: Stroudwater Associates (strategic and business planning), The Neenan Co. (space planning, site assessments, and design-build services), and Dougherty Mortgage (financing services). These advisers formed a team with key CVH stakeholders to collect and evaluate market data, and to subsequently design alternative operational strategies and facility solutions within a sustainable financing threshold. Leadership, including physicians and staff, participated in a planning session to align uponmarket data, market capture, possible strategies for growth, enhanced service lines, forecasted financial/operational models, sustainable borrowing capacity, a targeted capital budget, and a conceptual design to deliver on the operational strategy.

The Stroudwater, Neenan, Dougherty, and CVH team tested and retested each scenario against the hospital’s specific strategic, financial, and operational goals, which included:

  • Increasing nursing efficiency with a common nurses’ station for med-surg, obstetrics, and the emergency department
  • Improving patient experiences
  • Delivering private patient rooms
  • Enhancing patient access
  • Recruiting internal medicine physicians
  • Increasing orthopedic procedures.

Based on this collaborative design process, the project team developed 3-D architectural animations, staff and patient flow simulations, and BIM models to supplement financial operations forecasting, staffing, and capital costs models. Ideal for flexibility and quick manipulation, these models evaluated multiple facility design solutions capable of meeting an overall targeted annual staffing and debt service budget. This process saved a tremendous amount of time, increased engagement, and reduced the costs of misunderstanding and re-work.

It also resulted in a $24.6 million replacement facility sized within the hospital’s financing capacity and capable of increasing:

  • Patient days and average daily census by 6 percent
  • Outpatient surgery by 7 percent
  • Radiology cases by 3 percent
  • Lab cases by 4 percent
  • Cardio pulmonary cases by 4 percent
  • Emergency department visits by 6 percent.

Next, the project team sought facility funding through the U.S. Department of Housing and Urban Development (HUD) and the Office of Insured Healthcare Facilities (Section 242 Mortgage Insurance Program), which results in a capital cost substantially below what a rural hospital could accomplish independently. CVH’s cost of borrowing was reduced to a net interest rate of 3.56 percent at a time when taxable debt was trading at 6 to 7 percent.

Meeting the goal
Opened in 2012, CVH today is a three-story, 60,000-square-foot facility with private patient rooms; obstetrics and emergency departments; imaging services including CT and MRI capabilities; a three-room surgical suite; pharmacy, lab, physical, cardiac, and respiratory therapy services; administrative space; educational area; and 9,000 square feet of covered parking. CVH’s glass-walled atrium lobby enables physicians and users access to both the upper and lower hillside clinics as well as the hospital’s collocated diagnostic and procedural services. The patient rooms are positioned with views of a timbered ravine and the lush, open meandering Coquille River Valley to the west.

These design features have enhanced patient access to private medical services as well as efficient staff to patient ratios, improving the amount of care provided by each full time equivalent (FTE) employee. CVH’s average daily census has also doubled (significantly more than the projected 6 percent growth) while patient care volumes and market capture have also significantly surpassed projections in every service live. Even with increased volumes, CVH has held staff and staff salary increases to 2 percent annually, after an initial planned 10 percent increase in the first year. Finally, CVH has been able to recruit two of the region’s top internal medicine physicians and an established orthopedic surgeon to commit his entire practice to CVH.

Setting an example
Understanding and sustaining the profound connection between healthcare facilities, local economies, and communities is paramount if healthcare leaders are to improve population health and manage total healthcare expenditures. An active collaborative design process for replacement facilities enables stakeholder buy-in, improved operational performance via facility design, and access to sustainable financing. It also creates a facility capable of attracting and retaining healthcare providers and providing competitive care. Early indications on year-to-date statistics at CVH for 2013 substantiate continuing operational growth and success, yielding an example for the potential future of investment in rural healthcare facilities.

Michael Curtis is vice president of The Neenan Co. (Fort Collins, Colo.) and can be reached at Brian Haapala is managing principal
at Stroudwater Associates (Portland, Maine) and can be reached at