Steelcase's Medical Breakthrough

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Hillenbrand Industries (HB), for example, makes and rents hospital beds, and Medline Industries focuses on medical-exam equipment. So many hospitals and doctors' offices have hodge-podges of furniture collections, which can lead to an aesthetically jarring environment.

Mix and Match

While forming Nurture, Steelcase wanted to fill the need for a furniture line that could extend across the varied environments of a hospital, offering everything from sleek cabinets that neatly hide scary medical equipment in patient rooms to adjustable, easy-to-clean chairs for waiting rooms. The products shared design elements such as upholstery color palette and similar wood details so that they would create a consistent look, no matter which items of the line were used.

Rather than start from scratch, and to shorten time-to-market, Steelcase surveyed its existing family of companies to see what designs or technologies could be repackaged as health-care goods. "We saw we actually had a relative strength when we looked across brands," Carlson says. Steelcase's DesignTex arm makes fabrics that could be modified for bacteria-resistant chair upholstery for examination rooms. And "interactive whiteboards"—presentation systems that feature projected digital imagery and can incorporate hand-written notes in real-time—from Steelcase's PolyVision division could be marketed to nurses and doctors who need to share information quickly.

Still, there were gaps in the existing Steelcase inventory, including specialized items such as bariatric chairs and patient-examination tables. To quickly supplement its offerings, Nurture acquired Softcare, a 10-year-old Canadian company known for its elegant health-care furniture, in September, 2006.

Studying the Impact

So far, in the 10 months Nurture has been in business, the company has installed patient-room mockups and pilot nursing stations, among other configurations, in 10 hospitals. There are 25 patient-care sites across the nation in some stage of having actual products installed.

And Nurture has been working with top hospitals around the country, including the Mayo Clinic and the Cleveland Clinic, to research how its line of 150 pieces can best be used in health-care settings. Steelcase had already been working with the Mayo Clinic's SPARC (See, Plan, Act, Refine, Communicate) innovation lab since 2002 (see BusinessWeek.com, 10/25/05, "A SPARC for Medical Innovation").

Since Nurture was founded, it has partnered with SPARC on several major research studies. These include a report on the impact of space and furniture changes on medical outcomes, to be released in June.

Making Waves

Nurture isn't alone in striving to develop stylish, user-friendly medical equipment and clinical environments and furnishings that help patients feel more comfortable and heal faster. Top design firms such as IDEO, Smart Design, and Continuum are known for designing sleek medical devices for both clinicians and patients, from organ-transplant containers to thermometers to diabetes-care equipment. In addition, designers are also remaking the workspaces of doctors and nurses to streamline their paperwork and consultation processes, with the goal of helping hospitals avoid Walter Reed-style messes.

The Center for Health Design, for example, a Northern California-based nonprofit, has developed a research initiative called the Pebble Project—as in a pebble that causes waves when thrown into a pond—in which 43 hospitals around the country test and compare innovative furniture and architectural layouts developed via evidence-based design. The Center then measures how these designs affect patient experiences, an institution's financial performance, and caregiver efficiency (see BusinessWeek.com, 8/15/06, "How Hospital Design Saves Lives").

Focusing on the health-care industry is a wise strategy for designers looking to expand their sales. For example, a 2005 survey from consulting firm Deloitte, The Future of Health Care: An Outlook from the Perspective of Hospital CEOs, reported that 72% of hospital chief executive officers surveyed cite purchasing new equipment as a major capital need, indicating the market potential of this sector.

Wooing "Medical Consumers"

Plus, the U.S. health-care industry in general, is growing. Americans will spend $440.8 billion a year by 2016, predict the number crunchers at the Centers for Medicare and Medicaid Services (CMS). That's up from an estimated $250.6 billion spent in 2006, as reported on the Web site of the health-policy journal Health Affairs last month.

CMS predicts the cost of hospital care will exceed $1.2 trillion by 2016—nearly double the estimated $651.8 billion spent in 2006. While these numbers indicate rising expenditures, growth has been slowing for the first time since 2003. In 2005, hospital-care spending in the U.S. grew 7.9%, but in 2006, it grew approximately 6.6%. The reason for the slowdown, CMS explains, is a decline in public health-care spending. But CMS also predicts a rebound will take place in the next 10 years, as private spending—by coveted "medical consumers"—increases.

It's still too early to know whether Nurture will help Steelcase catch some of the expected windfall. While the parent company's total sales were up 9.8% in 2006, to $2.9 billion, Nurture was still a fledgling company last year and its sales couldn't have made a substantial impact. And, as Carlson points out, hospital renovations can take a year or so to plan. But with construction trends rising and hospitals competing to win medical consumers, Nurture—and Steelcase—seem poised for healthy sales.

Click here to view a slide show of Nurture furniture.

Jana is a writer with BusinessWeek.com in New York.