The Business Case for Simulation-based Hospital Design Testing; $90M Saved in Costs Avoided

Abstract

Introduction: Simulation-based hospital design testing (SbHDT) applied during the design of a healthcare facility ensures that the architectural design supports safe, high-quality, and efficient care delivery beyond applicable building code compliance. This prospective investigation assesses the financial impact of SbHDT in the form of cost avoidance. Methods: In designing a new free-standing 400+ bed children’s hospital, SbHDT identified latent conditions early in the planning process to mitigate safety concerns related to the proposed design of 15 clinical areas. Architectural modifications were made to address concerns and resolve latent conditions before construction. The estimated cost of materials and labor to make an architectural change was documented for each architectural modification. Unit cost multiplied by unit count for each design element changed was summed together as total cost avoidance. Results: The cost to conduct the simulation was $1.6M (0.01% of overall project cost). Seven hundred twenty-two latent conditions were identified, and 57% of those latent conditions were mitigated by design changes. Ninety million dollars in costs were avoided by making design modifications before construction. Twenty-eight percent of latent conditions (n = 117) would have been cost-prohibitive to modify after construction. Conclusions: SbHDT harnessed evidence-based design to improve clinical care, optimize safety, and maximize investment. SbHDT was financially practical and had a significant impact on cost avoidance. Implementing SbHDT is associated with upfront costs, but long-term savings will accumulate over time through expenses avoided through mitigation of safety threats and operational savings.