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Panduit Healthcare Congress probes risk and reward of 3P funding model

CHICAGO -The 388-bed North Bay Regional Health Centre is not your traditional hospital building project.


July 1, 2008  


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CHICAGO -The 388-bed North Bay Regional Health Centre is not your traditional hospital building project.

The state-of-the-art facility, now under construction, falls under the Public Private Partnership or 3P funding umbrella, which the Toronto-based Plenary Group, a public private partnership company, describes as an infrastructure project where the public and private sector work together to create a community asset.

In this case, Plenary Health Consortium has partnered with North Bay Regional Health Centre and Infrastructure Ontario, a crown corporation that manages the province’s large infrastructure projects, to design, build, finance and operate and maintain the facility.

The consortium includes Plenary Group which is responsible for ownership and development, PCL Constructors, Deutsche Bank, which is financing the deal, and Johnson Controls Inc., which is responsible for facilities management. Under terms of the deal, Plenary will be paid $551 million over 30 years to build, finance and maintain the new hospital.

According to Infrastructure Ontario, PriceWaterhouse Coopers has “estimated projected savings of $56.7 million under the alternative financing approach compared to a traditional delivery model.

The 3P model, which was first launched in the U. K., began in Canada in British Columbia and over the last few years has quickly picked up momentum across the country

The Canadian Council for Public Private Partnerships (CPPP) describes it as a cooperative venture between the public and private sectors, built on the expertise of each partner “that best meets clearly defined public needs through the appropriate allocation of resources, risks and rewards.”

At the Canadian Healthcare Congress 2008 held here in mid-June, Eric Corej, Panduit Canada Corp.’s district sales manager, said that when it comes to this “avante-garde” approach to funding, “the growing pains are over and the action has started.”

The two-day conference, which included a tour of Panduit’s Executive Briefing Centre in Orland Park, Ill., a working laboratory and showcase for technologies enabled through the Panduit Architecture for Unified Physical Infrastructure (UPI) initiative, zeroed in on healthcare facility risk factors, particularly at the physical infrastructure level.

“You have the tools, the equipment and the expertise,” said Corej. “There is really no reason why you cannot have a long-term IT strategy when it comes down to the physical layer.”

He added that while most healthcare organizations maintain various physical system infrastructures such as power, communication, computing, security and control through a silo approach, an increased demand for IP communications is leading to the convergence of these systems. This at a time when IT organizations are under immense pressure to improve availability levels and support business processes.

Convergence, said Corej, requires physical and logical system integration, which affects system performance.

The stumbling block is incidents of network downtime, many of which, according to a report from Sage Research Inc., can be attributed to physical layer connections.

“It is the least glamorous part of the network infrastructure — the cabling, the connectors, the cabinets, the raceways and the racks — but they can cause a great deal of downtime if not installed properly,” he told delegates, which included hospital IT managers, construction executives and healthcare.

An engaged partner ecosystem, said Corej, mitigates risk. Chuck Dykstra, account manager with Fluke Networks Canada, pointed out that hospitals today face the need to cut costs, increase efficiency, become more accountable to the public and manage multiple converged operations.

He added that the overall trend and mandate for hospitals is to “go digital” to meet these demanding needs.

Examples of this include orderlies receiving patient information via a wireless network, maintenance staff having the ability to track mobile equipment using RFID tags attached to devices and the ability for a doctor to dictate into a PDA, PC, cell phone or IP phone and have any information transferred over a network to a transcriptionist.

Having a sound infrastructure and data centre is critical. “Today’s data centres contain hundreds of active devices,” Dysktra said. “Servers, mainframe and midrange computers, storage disk, tape backups, firwalls, load balancers, network switches, routers and transport equipment all interconnected via a structured cabling system. Malfunctions in the copper and fiber infrastructure at the 1-gig or 10-gig layer can be catastrophic.

“Structured cabling is not just for computers anymore. Advances such as IP phones, Wi-Fi access points and IP security cameras all place additional demands for storage performance and transmission with the data centre.”