National Healthcare Capital Project Benchmarking-An Owner's Perspective
Kahn, Noah, HERD : Health Environments Research & Design Journal
Few sectors of the economy have been left unscathed in these economic times. Healthcare construction has been less affected than residential and nonresidential construction sectors, but driven by re-evaluation of healthcare system capital plans, projects are now being put on hold or canceled. The industry is searching for ways to improve the value proposition for project delivery and process controls. In other industries, benchmarking component costs has led to significant, sustainable reductions in costs and cost variations. Kaiser Permanente and the Construction Industry Institute (CII), a research component of the University of Texas at Austin, an industry leader in benchmarking, have joined with several other organizations to work on a national benchmarking and metrics program to gauge the performance of healthcare facility projects. This initiative will capture cost, schedule, delivery method, change, functional, operational, and best practice metrics. This program is the only one of its kind. The CII Web-based interactive reporting system enables a company to view its information and mine industry data. Benchmarking is a tool for continuous improvement that is capable not only of grading outcomes; it can inform all aspects of the healthcare design and construction process and ultimately help moderate the increasing cost of delivering healthcare.
Key Words: National Healthcare Capital Project Benchmarking, metrics, benchmarking, external benchmarking, data-based, process-based, comparative analytic tools, collaborative process, benchmarking project cost, project metrics, casual benchmarking, data-driven best practices, Construction Industry Institute, CII, cost metrics, normalization, performance metrics, functional metrics, Kaiser Permanente healthcare facilities benchmarking, data mining, construction costs, capital planning, capital facilities costs
Few sectors of the economy have been left unscathed in these economic times, leaving many feeling uneasy, as though they are passengers on a small craft in a full gale. The design and construction industry has been experiencing the full force of this battering wind. Healthcare construction has been less affected than the residential and nonresidential construction sectors, but it is now starting to bend under the heavy economic pressures. Increased strains on the healthcare construction industry began in 2003 with accelerated construction cost escalation along with increased construction volume and localized overheated markets. In 2008, this pattern reversed as the money supply dried up and the country found itself in a severe recession. As a result, healthcare projects were put on hold or canceled. In conjunction with these problems, the high likelihood of impending healthcare reform is driving a re-evaluation of capital building programs throughout the healthcare industry, which is searching for ways to improve the value proposition for project delivery, process controls, and bricks and mortar. Ways to assess adequacy and effectiveness and to determine best practices have moved up a priority level.
In other industries, benchmarking of component costs has led to significant, sustainable reductions in total costs and cost variations. Within the petrochemical industry, which has been benchmarking its capital projects for years with the Construction Industry Institute (CII), performance has been shown to improve with the length of time a company is involved in the program. In the healthcare industry, a focus on management metrics and external benchmarking is emerging as one of the tools of choice to help plot the course of capital expenditures through these uncertain times. This article outlines the volatile economic environment in which healthcare design and construction finds itself and makes a case for an industry-wide effort to focus on data analysis and sharing to provide decision makers with metrics to make the most of the increasingly scarce capital dollars for healthcare. …