Abstract: The architectural design industry is confronted with dual pressures from a downturn cycle and the widespread adoption of AI tools, resulting in the continuous compression of the value of design creativity. Meanwhile, hospital reconstruction and expansion projects present complex characteristics, including numerous constraints of old buildings, uninterrupted operation, dynamic changes in demands, tight design schedules, and low design fees. Plagued by fragmented responsibilities and information asymmetry, the traditional design management model undermines the interests of three parties: hospitals, design enterprises, and designers. To address the aforementioned industry predicaments and project pain points, this paper aims to explore the value realization path and operational mechanism of the on-site labor dispatch design management model (referred to as the "on-site model" for short).This study employs a combination of theoretical analysis and case study methods. Firstly, it systematically sorts out the advantages and disadvantages of existing hospital design management models; secondly, it conducts a comparative analysis of the differentiated advantages of the on-site model; thirdly, it dissects the operational logic of the on-site model by applying the project governance theory and flexible human resource management theory; finally, it selects 5 typical hospital reconstruction and expansion projects for empirical analysis to verify the practical adaptability and application effect of the on-site model. The results indicate that the on-site mode can effectively address the pain points of traditional modes and balance the interests of all three parties; Designers transition from simultaneously coordinating 3-5 projects to providing comprehensive services throughout the entire lifecycle of a single project, in order to obtain stable employment security and income expectations; Design enterprises to alleviate business pressure and reduce risks, with a monthly fixed income of 10000 to 20000 yuan for single on-site services, reducing the proportion of accounts receivable; Hospitals can obtain more accurate design services and process control rights while meeting the requirement that the total number of dispatched labor does not exceed 10% of their own employment.As a product of the alignment of the three parties' needs amid industry hardships, the on-site model marks the industry's transformation from "qualification competition" to "competence competition". It provides new career development paths for surplus design talents, effectively promotes the refined implementation of medical architectural design, and serves as an important supplement and innovation to the traditional design management model.