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Part 1: Blue Ocean Medical Center

The mirrored-windowed facade of Blue Ocean Medical Center (or Blue Ocean Med) only just catches the watery October sun as it sinks below the city skyline. Situated between the edge of a mid-size city and the Atlantic Ocean, Blue Ocean Med is a hub for regional healthcare. Like most hospitals it is also among the biggest employers of the region.

In the particular case of Blue Ocean Med, they are only outmatched by the local tinning plant. As an organization, however Blue Ocean Med has no match for complexity. The hospital aims to serve the regional community on all relevant aspects of specialist care. They offer all regular diagnostics and surgical interventions, but also prevention programs, radiotherapy, e-health and research and development. For anyone familiar with hospitals: a truly wonderful organization and a wholly unremarkable general hospital. It is actually almost identical in organization, size and offering to both of the two nearest general hospitals.

These also deliver (in about equal measure):

  1. Extensive high-tech facilities

  2. A comprehensive care offering

  3. Fee-for-service

  4. E-health

  5. Qualified and caring personnel

  6. R&D and cutting edge medicine

Blue Ocean Med, like all general hospitals, is struggling with issues of quality, cost and profile. Focused clinics are taking more of their market, insurers are tearing down tariffs, real-estate cost is through the roof and the media are just waiting for anyone to slip up. In order to stand up to all this while delivering ready access to high quality yet affordable care, they know they must make some fundamental changes. They need to move from marginal improvement to far better ways of doing things. But how? What can they do differently with real impact? Can they afford to? And how can they do this without doing the exact same things everybody else is doing?

Follow Blue Ocean Medical in a series of blogs as it tries on alternatives on the above characteristics. Each article will feature one characteristic, yielding one alternative Blue Ocean Medical. There are three reasons for following these thought experiments. First; the dramatic changes Blue Ocean Med goes through may inspire those of you in healthcare to start doing things a little differently too. Second; I hope you will challenge and build on the presented ideas, working toward a greater truth and having fun while at it. Third I hope that some of you may one day join me in actually building Blue Ocean Med.

BOM One: Hospital without a home It is hard to imagine Blue Ocean Med without its mirrored-windowed facade, the hum of the analyzers, MRI’s and the air conditioning. We are all familiar with the single-bed rooms, the professional men and women in white hurrying along grey-green corridors and the understated waiting rooms. Most of us are also familiar with limited access to physicians and their high-tech equipment and facilities. Here’s a fun fact: most of those facilities stand idle most of the time (except for the air conditioning). A large amount of Blue Ocean Med’s real-estate is also actually quite general. It comprises of thousands of square meters of office space, bedrooms (low-complexity care wards), bathrooms, kitchens and parking lots. And facilities only seem to grow.  All these facilities need management, scheduling, servicing and regulating. But surely this is a prerequisite for high quality care? Well; it’s not.

Many aspects of hospital care do not need specialized facilities or high-tech equipment on site at all. Then there are the really expensive specialized facilities like high-field MRI’s and radiology bunkers. Almost all general hospitals have these things nowadays. But…why? Is it not far more efficient to share such expensive resources?

In typical style, Blue Ocean Med’s CEO started wondering what would happen if he’d sell the real-estate on the edge of town and go nomad. First of all he figured he would make a killing by transforming it into luxury ocean-view condos. Second he would be out of business. There is just no organizing the complexity of hospital care without some physical and managerial structures. Instead of selling off everything, he did three things.

First he determined which facilities were generic and which were specialized medical facilities. He also analyzed the utilization of all facilities and asked himself: ‘Do I really need to own and operate this facility myself? Are there better or more cost effective options outside our organization?’ and ‘Can we optimize utilization and the cultivation of skill and knowledge that comes with focus and volume?’. The generic facilities proved to be little more than very expensive office space. They soon found out that the city had thousands of square meters of vacant office-space. They rented half the building across the street at half the cost of their own facilities. That building now houses management, support, e-health and knowledge transfer workers. Most of the outpatient care is also organized there. They also found the utilization of their labs to be just as poor as that of the nearest other hospital. They downsized the lab to a stat-lab only, subcontracting bulk testing from the other hospital. Next the kitchen and facility management were

Second, he de-concentrated low-complexity specialist care. The idea of transforming these practices into ambulatory care units actually came from a Dutch entrepreneur. Meet Ivo Knotnerus ( He offers and organizes low-complexity specialist care in GP’s offices and local care centers in the Netherlands. A hospital without a home! This organization not only halves (!) the cost of care, it also literally brings physicians and patients closer together. It works a charm for Blue Ocean Med increasing trust, lowering barriers and greatly improving efficiency.

But the bricks were still there eating up space, money and time. Blue Ocean Med started to sublet space to private partners. The hospital now features a pretty comprehensive medical mall, guesthouses for families of patients and they actually did put in some condos, gratefully occupied by staff members and their families. The rest of the facilities are to be written off and torn down in time. If CEO’s are measuring success in the number of cranes going up, this Blue Ocean Med measures it by the number of wrecking balls going in.


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