Clinical, financial and operational challenges combined with changing regulatory requirements are taking the healthcare industry toward technology-driven “digital hospitals” to improve patient care, increase productivity and increase revenues while reducing costs.
Achieving these benefits will result in tremendous increases in networked data along with growing complexity in systems, interoperability issues and network infrastructure requirements.
A key to solving the interoperability and network issues lies in building robust, high-performance cabling infrastructures that provide reliable, unrestrictive foundations for both the current and future IT and clinical technologies that drive modern healthcare facilities.
Until now, detailed network cabling cost studies for new hospital construction have not been readily available. Belden recently completed a thorough study of these costs and the results are summarized in this article, complete with a comparative cost analysis of three performance classes of copper cabling (ANSI/TIA Category 6A, Category 6 and Category 5e cabling systems).
The results indicate that implementing the highest-performance Category 6A-based cabling plant, despite its higher initial cost, will significantly reduce (improve) TCO when compared to Category 6- or Category 5e-based systems and their respective performance upgrade costs over time.
Study methodology
Using American Hospital Directory (AHD) data, we first defined the “typical hospital model” to be used in the study as a 103-bed short-term acute care hospital, located in a major urban center. The study established that data cabling is the largest of six major cabling cost centers found in the typical hospital network, and then goes on to quantify and compare the initial costs and TCO when Category 6A, Category 6 and Category 5e cabling solutions are used for the data cabling requirements.
With these baselines established, we forecasted that the continuous advancement of both IT and clinical system technologies would inevitability require upgrades to at least some portion of the medium-/lower-performance Category 6 and Category 5e-based systems to higher-performance Category 6A technology at some point over their installed lifetime. Adopting a conservative approach, we projected that a realistic upgrade scenario would involve three upgrade events, with each event affecting a 12-bed unit and supporting areas within the hospital (resulting in upgrades to a total of 36 beds, or slightly less than 35% of the model facility’s total of 103 beds). Our study carefully calculated the direct costs (material and labor), and indirect costs (lost revenues due to bed closures during upgrade work) required to complete the upgrades to higher-performance Category 6A data cabling, and then factored these costs into our total cost-of-ownership analysis.
With the typical hospital defined and network parameters set, we contracted a recognized expert healthcare network consultant to develop the cabling design and product specifications to support the applications throughout the 103-bed facility. The project scope included horizontal distribution and backbone cabling including all racks, patch panels, cable management and conduit as required in ERs, TRs and above-ceiling spaces. The “design philosophy” focused on optimizing patient care, reducing clinician “footsteps” and improving productivity while optimizing cabling and network reliability, maintainability and operations.
To ensure industry-average, brand-independent material costs, the consultant translated the network design into product listings for four major cabling brands, and then obtained and averaged quotes for all brands from three national distributors.
Initial cost analysis
The total initial cabling cost for the benchmark Category 6 network infrastructure across the 103-bed facility was $1.8M. By comparison, cabling the same facility with a Category 6A cabling plant would cost $2.2M, or 25 percent more than Category 6; while a Category 5e solution would cost $1.5M initially, or 16 percent less than the Category 6 benchmark.
The costs of upgrades and TCO
Direct costs were calculated as the total of the new Category 6A material costs plus the associated demolition, installation, freight and project management costs. Each 12-bed upgrade event yielded a total direct cost of $50,500, or a grand total of $151,500 for the three forecasted upgrade events.
Indirect costs are driven by revenue losses due to bed closures in the upgrade area. We estimated that each upgrade event to a 12-bed unit would require 11.5 days of bed closures, or a total of (12 beds x 11.5 days x 3 upgrades) 414 days of lost bed revenues due to cabling upgrades. We then completed a detailed study of bed revenues in different types (short term, children’s rehab, etc.) and sizes (<100, 100-250, >250 beds) of hospitals. Adopting a conservative approach, we used the lowest average revenue/bed/day value of $3,300 from our study and then applied an occupancy factor of 80% to arrive at a net revenue/bed/day amount of $2,640. This allowed us to establish a total indirect cost of ($2,640 x 414) $1,092,960 as a result of lost revenues due to bed closures during the cabling upgrade events.
The strong case for Category 6A cabling in healthcare facilities
The data and results are compelling. An initial investment in Category 6A cabling will reduce (improve) total cost of ownership, provide superior network performance*, eliminate the need for performance-driven upgrades with their related bed closures and lost revenues, and contribute to improved patient care while reducing operating costs and improving employee productivity.
For complete study data and more detailed information, please download the Belden white paper titled, “Reduce Cost-of-Ownership by 35% with Category 6A Network Cabling in Hospitals.”
About the author
Rod Sampson is marketing director, Belden. For more information on Belden solutions for healthcare, go to http://www.belden.com/marketsolutions/enterprise/healthcare.cfm.
