PROJ6002 PROJECT PLANNING AND BUDGETING 1

PROJ6002 PROJECT PLANNING AND BUDGETING 1
Case Study: St. Dismas Assisted Living Facility
Project Background
St. Dismas Medical Centre, an urban, non-profit, 450-bed rehabilitation hospital began to see a
significant decline in admissions. St. Dismas’ mission focuses on inpatient and outpatient
rehabilitation of the severely injured and catastrophically ill. While the patient census varied from
month to month, it appeared to the St. Dismas Board of Trustees that the inpatient population
was slowly but steadily declining. The hospital’s market researchers reported that fewer people
were being severely injured due to the popularity of seat belts and bicycle/motorcycle helmets.
In order to get a handle on the future of the organization, the Board, and the CEO, Fred Splient
M.D. called for a major strategic planning effort to take place.
In January 2019, St. Dismas held a planning retreat to identify future opportunities. The
outcome of the retreat was that the Medical Centre needed to focus its efforts around two major
strategic initiatives. The first, a short-run initiative, was to be more cost-effective in the delivery
of inpatient care. The second, a long-run strategy, was to develop new programs and services that
would capitalize on the existing, highly competent rehabilitation therapy staff and St. Dismas’
excellent reputation in the region.
At the time of the retreat, Fred Splient’s parents were living with him and his family. Fred was
an active member of the “sandwich generation.” His parents were aging and developing many
problems common to the geriatric populace. Their increased medical needs were beginning to
wear on Fred and his family. It crossed Fred’s mind that life might be more pleasant if the hospital
Board approved an expansion of the Medical Centre’s campus to include an assisted living facility.
In March 2019, Fred had his Business Development team prepare a rough estimate of the
potential return on investment of an assisted living facility. He asked the team to identify different
options for facility construction and the associated costs. The team also did a complete
competitive analysis and examined the options for services to be offered based on St. Dismas’
potential population base and catchment area. The Business Development team visited several
facilities across the country. The team also interviewed companies that could oversee the design,
building, and operation of the facility for St. Dismas. The development team produced a
preliminary business plan based on the recommended structure for the facility, estimated capital
expenditure needs, estimated income from operation of the facility, as well as projected revenues
to other Medical Centre programs resulting from the facility’s population.
The business case was presented at the May 2019 meeting of the Board of Trustees. Fred
Splient and his team introduced the Board to the concept of opening an assisted living facility on
St. Dismas’ campus. The facility would be set up as a for-profit subsidiary of the Medical Centre
so that it could generate a profit and not be subjected to the strict guidelines of the hospital’s
accrediting agencies. As a subsidiary organization, however, the Board would still have control.
The chosen facility design was a freestanding apartment-like facility with a sheltered connection
to the Hospital for access to the kitchen and hospital services. The facility would have 100 units
with 15 to 30 of the units classified as “heavy – assisted” and built to code to house the physically
and medically disabled. The rest of the units would be “light – assisted” larger apartments. The
population would be approximately 110 to 150 residents, with most being single occupants
rather than couples. The light-assisted apartments could hold residents who required only minor
medical and social interventions. The residents of the heavy-assisted section would have more
medical needs and would require assistance getting around. The Business Development team
recommended this type of programming model, because many assisted living facilities were
erected across the country, but few had a medical focus and offered the types of services that St.
PROJ6002 PROJECT PLANNING AND BUDGETING 2
Dismas could offer — physical and occupational therapy programs, and behaviour management
programs to name a few.
The Board was assured that the facility would meet the strategic initiative of a growing
business. The business plan projected an immediate increase in the number of referrals to the
outpatient therapy programs. Another projected deliverable of the project was to enable St.
Dismas to strengthen its focus on reimbursable preventive and wellness programs for the
healthier geriatric population.
The project’s longer term goal was to increase the census in the hospital’s inpatient units by
having a location where people could age in place until they were in need of hospitalization, and
then such a facility would be right next door. Depending on the exact size of the apartments, their
equipment, and the actual ratio of heavy- to light-assisted units, Fred estimated that the entire
project would cost between $8,500,000 and $11,000,000 for the facility construction. That
estimate included the cost of land, furnishings, and a sheltered connection to the hospital. When
up and running, it was estimated that the net income would range between $9,000 and $12,000
per unit per year. The team estimated the net cash flow for the entire project to be around
$1,500,000 per year.
Fred requested the Board to approve the concept and allow his team to prepare a pro forma
plan to the Board for approval. The plan would include a recommended design for both heavyand light-assisted apartments. It would also include all costs of land, construction, furnishings,
and staffing. Income estimates would be included and would be conservatively biased. A
timetable would also be included. The Board conducted several executive sessions, and by the
middle of May voted to approve the concept. They approved the architectural-constructionmanagement firm recommended by the team, and they requested Splient to proceed with
developing a complete project plan. The Board appointed two Board members to sit on Fred’s
planning group.
In June, Dr. Splient gathered his executive team together and presented the project mission, and
scope. He reported that the board had approved a small budget to finance the planning process.
The Board also stipulated that construction could not begin until after the November 2019 city
elections because two of the Board Members were running in that election, one for a city council
seat and one as a county commissioner. The Board also stated that they would like a plan that
would allow the facility to open by June 2022, as research has shown that many adult children
find the summer the easiest time to assist their parents in finding an alternative to independent
living arrangements. The CEO and executive team were now confident that they were ready to
launch the project to plan, build, and open an assisted living facility at St. Dismas.
A few days later, Fred decided that it was time to set up the team that would take responsibility
for what he called the ALF project. He quickly decided to include the following staff at the launch
meeting:


Chief Financial Officer (CFO)
Vice President of Business Development and Marketing





Rehab Services Medical Director
Construction Project Manager for capital facilities projects
Chief Operations Officer (COO) (nursing, facilities, food services, and housekeeping)
Director of Information Services
Director of Support Services (central supply, purchasing, and security)
Two members of the Board of Trustees, one with construction experience and the other a
probable representative of the city council.

PROJ6002 PROJECT PLANNING AND BUDGETING 3
Even though the department directors from Support Services and Information Services would not
be involved until later, Fred decided to include them from the beginning. Fred knew some
members of his team had a tendency to become obstacles to progress if they felt left out.
Fred named the group the ALF Project Steering Committee and held the first meeting. Fred
presented his vision for the facility. He told the group that he personally would be managing this
project. He led a discussion of all the major steps that must be included in the project plan, and
asked each team member to identify the areas for which they would accept responsibility. The
hospital’s Construction Project Manager took responsibility for the construction of the facility,
and the COO volunteered to oversee the building design, as well as define the needs for food
services, housekeeping, staffing, and policy and procedure development. The CFO agreed to
develop the budgets for each area of the project as well as the operating budget for the facility.
The CFO also agreed to create the payroll and accounting systems necessary to operate the
facility. The IS director accepted responsibility to define and set up all the telecommunications
and information system needs of the facility. The VP of Business Development agreed to create a
preliminary marketing plan, and a communication package for the community and hospital staff.
In addition, she discussed organizing a major ground breaking event. The Medical Director said
that he would design an assessment tool for determining residents’ level of medical needs upon
moving in to the facility. He felt this was the first step in defining what clinical services should be
offered to residents. Fred told the team that he would develop the management structure for the
new facility and work with in-house counsel to identify all governmental regulations as well as
all industry standards that pertain to an assisted living facility and govern the facility’s practices.
Splient gave the team two months to come back with their detailed action plans for their areas of
responsibility.
Project Planning
The steering team meeting held June 1, 2019 went quite well. Fred felt that his team members
had worked well together at determining the steps and the associated costs of the program. The
CFO presented the program budget first, and then project team members presented their draft
project plans. The COO presented the following project plan:

ID Task Name Duration Predecessors Resource
Names
1 Operational Implementation Plan
1.1 Develop Management/Organization structure 30 days CFO, Legal, VP
Mktg
1.2 Recruit & hire Executive Director 1.4 wks 1.1 Splient
1.3 Interior design issues decided (furnishings, etc.) 20 days 1.2 COO
1.4 Determine what was provided with lease and what was
furnished in some units
2 wks 1.3
1.5 Determine budget for interior 10 days 1.3,1.4
1.6 Carpet and wall finish determined 2 wks 1.5
1.7 Furniture and room layout 2 wks 1.5
1.8 Facility and equipment needs defined 4 wks 1.7 COO
1.9 Staffing determined 2 wks 1.2 COO, Dr. Link
1.10 Office space for physicians 4 wks 1.7 Dr. Link
1.11 Medical staffing needs determined & Director appointed 4 wks 1.9 Dr. Link
1.12 Food service planning 45 days 1.2
1.13 Menus selected 8 wks 1.12
1.14 Waiting and service staffing needs determined 4 wks 1.9,1.12
1.15 Additional equipment needs 4 wks 1.13FS (3wks
before)
1.16 Telecommunications services 45 days 1.8
1.17 Investigate phone service options 45 days 1.8 Chief Engineer
1.18 Certification/Accreditation requirements 42 days 1.11

PROJ6002 PROJECT PLANNING AND BUDGETING 4

1.19 Approve requirements & timing of applicants with Dept. of
Health to open facility
0 days 1.18 Legal
1.20 Develop clinical and operational quality monitoring
systems
30 days 1.8
1.21 Develop financial systems (billing, etc.) 6 wks 1.8 CFO
1.22 Workforce planning 60 days 1.2 HR Director
1.23 Workforce management recommendations 6 wks 1.22 HR Director
1.24 Project plan for recruitment developed 2 wks 1.23
1.25 Policies and procedures developed 45 days 1.2
1.26 Obtain ‘samples’ of assisted living policies& procedures
from other institutions
4 wks 1.25 Legal
1.27 Investigate assisted living laws proposed in other
states/federal
10 wks 1.26 Legal
1.28 Technology & information systems identified 15 days 1.2 CIO
1.29 Develop plan for technology access for residents (TV,
Cable, PC ’s)
3 wks 1.28
1.30 Investigate software/technology options for residents 12 wks 1.29 CIO

The Chief Legal Counsel for the medical centre presented his project plan. Fred had asked him
to join the team when it became apparent that there were significant compliance and legal issues
associated with this project. As the proposed program was the largest in the St. Dismas’ history,
the legal team found that the legal and licensing requirements were more complex. Moreover, it
was also forecasted that the upcoming elections would likely delay the council approval and other
legal processes. As a result, the team expected the worst to be up to 50% of the forecasted
schedule.

ID Task Name Duration Predecessors Resource
Names
2 Legal and Licensing Requirements
2.1 Research licensing requirements for residential care
facility
38 days Legal
2.2 Uniform accessibility standard compliance (#disability
accessible beds)
2 wks 2.1
2.3 Investigate law firm and outline services 4 wks 2.1
2.4 Prepare project plan for license 2 wks 2.3
2.5 File license-by opening date 0 days 2.4
2.6 Curb-cut approval from county (access to County Rd.) 53 days 2.1 Legal
2.7 Investigate corporate structure for assisted living 115 days 2.3 Legal, CFO
2.8 Determine Board of Trustee membership 3 wks 2.7
2.9 Appoint Board of Trustees 4 wks 2.8
2.10 Prepare draft Code of Regulation 4 wks 2.9
2.11 Prepare document and filing of governance structure 12 wks 2.10
2.12 Draft service agreement with St. Dismas for services
provided
4 wks 2.11 Legal
2.13 Lease issues 110 days 2.12 Legal
2.14 Research Long Term Care insurance requirements 12 wks
2.15 Facility “rules” defined (i.e., smoking, firearms, pets,
financial planning)
4 wks 2.14
2.16 Spell out changes for residents in moving from “light” to
“heavy” assisted
6 wks 2.14
2.17 Lease template prepared 6 wks 2.14, 2.15,
2.16
2.18 Review all marketing materials for compliance 10 days 3.11 Legal

The Vice President of Marketing presented her project plan and stated that she and her staff
were responsible for every step in the plan. She was still working with her staff to determine who
does what. The Marketing VP made it clear to the team that she needed five months for the
PROJ6002 PROJECT PLANNING AND BUDGETING 5
marketing plan implementation to be able to meet the occupancy requirements at start-up. She
restated that her team must have this lead time to the completion of the construction and
furnishing phase of the Program.

ID Task Name Duration Predecessors Resource
Names
3 Marketing
3.1 Community mailing about construction project 30 days
3.2 Initial informational meetings 16 days 3.1SS (15 days
after)
3.3 St. Dismas volunteers meeting 1 day 3.2
3.4 Community groups meeting 4 days 3.2
3.5 St. Dismas staff (all shifts) 3 days 3.2
3.6 Presentation prepared for Speaker’s Bureau 2 days 3.2
3.7 Provide updates to community 0 days 3.4
3.8 Inquiry log established 10 days 3.2
3.9 Ground breaking ceremony-during National Hospital
Week
0 days 3.2
3.10 PR firm contracted 4 wks 3.2
3.11 Marketing plan developed 8 wks 3.10
3.12 Determine name and signage for facility 0 days 3.11
3.13 Hire Marketing Director 4 wks 3.11
3.14 Marketing plan approval 0 days 3.11,3.13
3.15 Implementation of marketing plan-5months before light
assisted units ready
20 wks 3.14, 4.5SS

As Fred was explaining that the next job of the group was to complete a final full version of all
project plans and firm up the schedule of the Program, it required him to revisit all project plans
and ensure that all long-duration activities must be broken down with details of sub-activities as
well as more milestones.
The Construction Project Manager stated that it was his turn to present his broad project plan
for construction of the facility.

ID Task Name Duration Predecessors Resource
Names
4 Construction & Furnishing
4.1 Phase 1 – Foundation & excavation (basement/1st floor
slab)
95 days 2.4, 2.6, 2.15
4.2 Phase 2 – Structure (steel/framing) 113 days 4.1FS (28
days after)
4.3 Phase 3 – Enclosure (masonry/windows/roof) 134 days 4.2
4.4 Phase 4 – Interiors (drywall/ceiling/flooring/case goods) 234 days 4.2SS (1 wk
after)
4.5 First 45 (light assisted) units readiness to prepare for
occupancy
10 days 4.4FS (1 wk
after)
4.6 First 45 units ready for residents 8 wks 4.5
4.7 Remaining 57 units (light & heavy) readiness to prepare
for occupancy
10 days 4.4
4.8 Construction complete 0 days 4.7
4.9 Building ready for residents 8 wks 4.8

* You have been delegated by Fred to complete the required schedule details of each project as
well as prepare the most likely and the worst case scenarios for the Legal and Licensing
requirements Project. Each scenario will be presented in 2 separate program schedules for the
next Board meeting along with the scope and time management plans (**Maximum of 2 students
are allowed in this assignment).

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