Deirdre Foley Woods, Healthcare Strategy & Planning, ETL
Pollie Boyle, Associate Director, ETL
Jack Goodall, Consultant, ETL

The law of gravity tells us that what goes up must come down, except perhaps in the case of space standards in new hospitals which appear to have achieved escape velocity to climb  inexorably. This, we suggest, is one of the reasons why healthcare providers across the world struggle with capital affordability when faced with the need to replace or modernise infrastructure.

In the UK between 1997 and 2010, over 100 new hospitals were built under PFI. Since then there have been few major new construction projects and according to the government’s Estates and Returns Information Collection (ERIC), NHS trust capital investment in such projects fell by 26% between 2013 and 2018, while total capital investment for new builds, improving existing builds and equipment fell by 30%. Despite the earlier wave of investment in new buildings, much of the rest of the NHS estate is past its useful life. Why then are we not continuing to replace worn out assets?

One explanation is that space standards applicable to new hospital builds have increased and average annual building inflation rose to 4% between 2002-2018, whilst trust income under UK tariff arrangements has decreased.  In this perfect storm, it has become increasingly difficult to balance expected income and expenditure. As a result, many new building projects have stalled early on in the planning period.

Increased area allowances

Under the UK’s  Consumerism initiative of the early 2000s, space standards in patient areas within hospitals increased.  Additionally, to improve flows, recommended corridor widths have increased and plant allowances have risen in line with the demand for enhanced technical space and mechanical ventilation.  Research by ETL has found that should current Health Building Note (HBN) recommendations be applied to hospitals built in the early 2000s, their net and gross internal areas would increase by around 10% and 18% respectively.

Increased costs per unit area

On top of increased space standards, high levels of annual building inflation plus increasing equipment and technical costs have contributed to the overall rising costs of building a new hospital.  Construction and scheme costs per unit area for new builds increased by over 75% between 2002-2019.

Decreased income

Additionally, the public sector faces mounting pressure to save money. NHS England has attempted to make savings by decreasing the Healthcare Resource Group (HRG) tariffs that Trusts receive for services. The Five Year Forward View also proposed that £8.6 billion of the total £22 billion efficiency savings be related to provider tariffs. Healthcare Evaluation Data (HED) suggests the income Trusts received from the HRG Tariff decreased by 4.5% from 2012-2016 and has only recently begun to increase.

Combining increased space standards, building inflation and decreased income to trusts, it is now twice as difficult to demonstrate affordability on a new hospital being planned today compared to a building with the same functional content planned 15 years ago. In this climate, it is unsurprising that many NHS building projects die an early death.

So, is there a solution?

The way forward

At the scheme concept stage, Trusts must ensure their models of care minimise waste and maximise asset utilisation to generate efficiencies that translate into construction savings, without compromising patient care.

The healthcare planning process should ensure the following:

  • Robust data modelling to accurately determine future demand and facility requirement, ensuring sufficient capacity throughout the system to avoid bottlenecks
  • Challenge existing utilisation targets to maximise the use of capital-intensive assets including theatres and imaging modalities. This leads to reduced waiting time in hospital as facilities are open for longer, and increased throughput of patients during normal working hours, which in turn improves outcomes
  • Engaging with users (including patients and their carers) to determine efficient patient, staff, and goods flows and to minimise waiting and storage requirements
  • Simulation modelling to identify the peaks and troughs in demand, and to target resources where they are most needed
  • Workspace solutions that deliver efficient modern day office environments
  • Designs favouring flexible, generic space future-proofed for multi-specialty and multi-acuity use
  • Exploit the use of technology to minimise on-site provision, assume just in time deliveries, and technology-enabled community-based care, reducing the need for outpatient provision on acute sites.

Some example projects where this approach has been put into practice include:

  • As part of a refurbishment programme, one London trust has co-located the majority of its outpatient clinics into one facility. Previously, these clinics were scattered throughout the hospital. Embedded facilities, dedicated to one specialty, tend to have poor utilisation and increased staffing requirements.  In this example, centralisation has led to improved patient way finding, increased communication opportunities for staff, and a requirement for 30% fewer consulting rooms.
  • One new build in the planning stage assumes theatres and cardiac catheter laboratories will be routinely operational 72 hours each week (compared to the existing utilisation of 40-50 hours per week). Whilst this will have rota implications, the overall number of staff required does not change, compared to having more theatres being less fully utilised. As well as reducing the number of theatres and cath labs required, the number of out of hours procedures will reduce.
  • Patients presenting with acute myocardial infarction frequently had to wait a few days for angiography and subsequent angioplasty. By providing sufficient capacity within the cath labs, patients are now treated within hours of presenting and can be discharged within 24-48 hours thus dramatically reducing the number of beds required, as well as improving patient outcomes.
  • Simulation modelling of flows within an emergency department identified that the Trust would need as much as double the current number of treatment cubicles to cope with peak attendances. This analysis focused the Trust’s attention towards investigating other models of care and length of stay reduction initiatives.
  • Initial feedback from a smaller project where staff offices have moved to a dedicated office building in order to release space for clinical expansion has been overwhelmingly positive. The scheme introduced smarter ways of working with open plan offices and hot desking for staff who are not office based, dramatically decreasing area requirements.

Delivering patient focused models of care and generating efficiencies that translate into scheme and construction cost savings will go a long way to reducing the ever-increasing affordability challenge that new healthcare projects face.

For more information on planning new healthcare projects visit