Profit-versus-Mission Conflict

Posted on June 8, 2012


Last summer, I was brainstorming a way to get an independent community hospital some badly needed patient beds included in a project for an ICU. The hospital’s master plan called for replacing the remaining semi-private rooms with all private, and knowing the next building project would not be for another seven to ten years, I lobbied the now-or-never position.

The Director of Strategic Planning and Development’s response was almost apologetic when he related that, considering the looming healthcare reform, their patient mix would likely not support the move financially—even though it was in the master plan. He elaborately outlined the mission of the hospital, how the market has changed, and how painful it was that he could not deliver all-private rooms to meet the community’s expectation.

It felt almost awkward when I consoled him. My message to him:  it’s OK for a non-profit to let profit drive a decision.  After all, this is the 2010’s:  a hospital administrator is not a bad person for wanting to stay in business. I could sense the non-profit culture of mission-first healthcare wrestling with for-profit culture of bottom line-first healthcare in his head and heart.

Both mission and profit mesh together; they are not mutually exclusive.  Here are some legitimate, mission-driven reasons for a capital project:

  • New (or prevent loss of ) philanthropic gift or grant
  • Forfeiture of Certificate of Need (CON)
  • Need to provide new service to community
  • Need to increase capacity or volume
  • Need for an essential technology, safety or compliance implementation

These are smart, essential, rational reasons.  In many cases, any team can fulfill these needs for a hospital because they are core, basic performance measures.

On the other side of the administrator’s argument is profit, and equally legitimate in many ways.  These reasons are a little more strategic, and not the strength of every design-builder.  Nonetheless, an administrator should make no bones about these profit-driving reasons for their project and who they want to work with:

  • Increase revenue
  • Be faster to market / to beat out a competitor
  • Provide best value (most bang-for-buck)
  • Control costs (operations-based decisions)
  • Favorable pricing and / or negotiated cost sharing arrangement

All of these make a project more appealing financially. And a project partner who can deliver on both the mission and the profit?  Well, that’s gold for the hospital.

So, no worries about project goals. Designers and builders know it will take lessons and best practices from both the non-profit and the for-profit healthcare providers to survive healthcare reform, and projects will mirror that as well. If your architect or contractor does not hear that nuanced message, exercise patience and keep looking.