Examining The Real Cost Of Expedited Healthcare Construction
Schedule, quality and budget — you can only pick two. This is a common construction industry cliché, but it is often not that simple. It may be true that speeding up a schedule can lead to a stretched budget. However, when it comes to healthcare construction, it is important to examine more than just the basic costs.
“Healthcare providers need to do a different kind of math when it comes to expediting a construction schedule,” Clune Construction Vice President Derek Lemmon said. “They also need to factor in how much revenue they will lose when space is out of commission. For example, how much will it cost to shut down an operating room for an extra week, or to lose access to an MRI? That’s where the true cost lies.”
Unlike an office renovation project, where employees can work from home for the duration of the project, construction on a medical facility puts patient care on pause. According to Lemmon, this is a prime reason an expedited construction timeline may be worth the cost.
Additionally, patients and doctors have options when it comes to where they receive and provide care. If a cardiovascular operating room is down for 16 weeks for construction, a doctor may choose another facility to perform a procedure. If they have a favorable experience at that other facility, they might choose it more regularly moving forward, costing the hospital an important physician client.
Clune's healthcare team has many years of experience building both inpatient and outpatient facilities. They understand the unique cost considerations that come with renovating and constructing all types of healthcare real estate. This experience enables Clune to help healthcare clients understand these considerations so they can make informed decisions about how to approach their construction timeline.
“A hospital’s operation always comes first over our construction project, so we will work around a provider's schedule to allow them to fit in as many procedures as possible,” Lemmon said. “However, eventually, this work needs to be done. So we need to work with the client to find the best possible scenario for making it happen.”
One factor healthcare providers need to keep in mind when making a decision about construction timelines is the revenue they might gain by getting a new addition up and running faster. At the same time, they need to consider the additional costs of not expediting the construction schedule.
For example, some facilities may have to spend extra money to move equipment into a storage facility during renovations. Lemmon said many hospitals, particularly those in urban settings, have limited storage space. There often is not enough space to accommodate existing hospital machinery and the necessary construction equipment. As a result, healthcare facilities have to spend additional funds on storage.
“Hospitals can struggle to make a profit,” Lemmon said. “Emergency services typically don't bring in revenue, but they are essential to the community. On the other hand, MRIs, CT scans and surgeries bring in much-needed income to support other departments that provide vital care. We understand it is crucial that hospitals are able to get back to performing these procedures as quickly as possible.”
Lemmon referenced an operating room project that Clune is working on. He said Clune understands the client is losing a tremendous amount of revenue for every week the room is under renovation. When the team is able to expedite schedules, however — be it by three weeks, a month or even six weeks — it can recoup some of that revenue.
Clune expedites timelines by allowing superintendents and subcontractors to work overtime on nights and weekends to get the job done as quickly as possible. Additionally, Clune can accelerate otherwise long lead times on certain materials by paying a premium or exploring different manufacturers and putting materials on dedicated trucks, among other options.
“We can offer clients a variety of options to help speed up timelines depending on a project’s unique parameters and the client’s needs,” Lemmon said.
Of course, Lemmon and his team understand that expedited timelines come with additional upfront costs that healthcare facilities may not anticipate. However, there are strategies for helping to mitigate some of these expenses. The first step is bringing on the Clune team as early as possible. This ensures the team can have additional time during the pre-construction phase to strategize the best path forward.
“If we are brought in during the early stages of the project when design decisions are still being discussed, we can advise the client on how much each aspect will cost, assist them in making key decisions and avoid sticker shock,” Lemmon said. “If we can partner with the design team and mechanical, electrical and plumbing subcontractors early on, we can also drive the cost down. The key is to always be communicating with the client, so they are always fully informed.”
Regardless of whether a project was completed on a traditional or expedited timeline, Lemmon made it clear that Clune never sacrifices quality.
“Clune's first priority is to help healthcare providers work through different construction scenarios to make the decision that's right for them,” Lemmon said. “Our goal is to determine what kind of schedule works best with a client's budget and then bring the highest level of quality possible. Quality is always a given.”
This article was produced in collaboration between Clune Construction and Studio B. Bisnow news staff was not involved in the production of this content.
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