The results are in. For the past three years, the Construction Industry Institute at the University of Texas, Austin has been building a secure national database of healthcare facility project metrics.
The results of this work were made available recently to facility owners who contributed data to the benchmarking project, and are both useful and fascinating. They promise to vastly improve the accuracy and outcomes of planning and delivering hospitals and other healthcare facilities.
The initial benchmarking report, published in May, included data from nearly 90 healthcare construction projects. The findings, some surprising, included:
- Hospitals in seismic zones 3 & 4 are 54 percent more expensive to build than those in zones 1 & 2.
- It’s 26 percent more expensive to build on an existing medical campus than to build elsewhere.
- Hospitals that require environmental impact statements are 19 percent more expensive to build than ones where none is required. This might seem obvious but these statistics will assist in budgeting for these projects.
- Construction schedule growth for hospitals using BIM was half of that for hospitals that did not use BIM.
- LEED hospitals are less expensive to build than non-LEED projects. That’s not a typo — less expensive.
Appreciating the value of having objective benchmarking data against which to compare our own performance, Kaiser Permanente contributed to the database, and is an enthusiastic champion of the tool. The CII database allows healthcare companies, architects and contractors to confidentially compare its projects to similar projects from across the industry on up to 200 measures, including cost, schedule, delivery method, contracting method, sustainability and more.
Kaiser Permanente has internal historical data against which to compare current projects, as well as ad-hoc studies, but this ongoing collection of self-reported, independently validated data is the first of its kind. It will be invaluable when building business cases and proposing capital investments.
Benchmarking and LEED
The CII benchmarking data showing LEED hospitals and medical offices are less expensive to build than non-LEED buildings is valuable information to have, as we continue to socialize a commitment to the guidelines with people who still don’t believe green buildings can cost less than traditional construction. The idea that LEED isn’t cheap is still a widely held assumption in the industry. Business leaders who may value environmental stewardship, but whose focus and expertise is elsewhere, are hardwired to want to minimize capital costs.
Kaiser Permanente’s commitment to pursue a minimum of LEED Gold certification for construction of all new hospitals, medical offices and other major projects was bolstered by the success of its first LEED Gold hospital, the Westside Medical Center, which opened in August 2013 in Hillsboro, Oregon. The hospital achieved LEED Gold certification for a net additional cost of less than 1 percent of the total cost of construction, and those additional up-front costs are expected to pay back fivefold in operational savings over the medical center’s lifetime.
We have opened additional LEED buildings since then, but without industry data to validate our experience, these early successes could be considered anecdotal.
The LEED findings coming out of the CII database reflect the experience of roughly 50 projects — statistically significant information, but nevertheless preliminary. The idea that LEED hospitals and medical office buildings could be significantly cheaper to build than non-LEED projects goes against conventional wisdom, but the information is so promising and compelling, we are on the edge of our seats waiting to see if, with more data from more projects, the results hold true.
The truth is we’ve found that unless LEED is included from the beginning as an integral part of the design and acquisition process, there can be an adverse cost impact, losing valuable opportunities to make sustainable choices. That’s why Kaiser Permanente offers LEED training to everyone from real estate managers to facility engineers. Everyone is in the habit of thinking about buildings more holistically. It sets up project directors to hire and manage contractors effectively and to require LEED solutions as part of the bidding proposals.
Let’s face it, turning the tide on the long-held notion that green buildings cost more is a process. Having industry data that suggests otherwise is needed to build momentum for healthier buildings of all kinds, and to encourage owners to measure building decisions not only by economic value, but also the effect on people and the environment.
The CII database will raise the sophistication of conversations with contractors, as well as with board of directors who scrutinize and approve every large capital project. This information will greatly assist the industry and other participating healthcare organizations to:
- Assess the credibility of estimates
- Compare the impact of project-delivery processes and market conditions
- Incorporate best practices to support continuous improvement
Additionally, architects and contractors can use the database to stay competitive.
Effective benchmarking leads to better performance, including reduced costs and faster project delivery. With healthcare spending consuming nearly 18 cents of every U.S. dollar, the industry has a responsibility to manage capital investments wisely, and build world-class hospitals at the lowest possible cost to consumers.
The CII database costs nothing to use, but to obtain information organizations must first provide data regarding healthcare facility projects completed in the last five years. The project-specific information is safeguarded by CII and not revealed to other participants.
The CII database will only get better as more organizations participate and add projects. More than 20 Kaiser Permanente hospitals and medical office buildings from around the country have been submitted. The more input provided, the more useful the output will become.
To learn more about the National Health Care Benchmarking project, visit healthcarebenchmarking.org