Look for the article titled "Healthcare Capital Projects—How to avoid common problem areas" in the April 2011 edition of hfm.

Ensuring Success in Healthcare Capital Projects

Just three years ago, news stories were talking about the recent explosion in hospital construction, which seemed to show few signs of stopping. Construction project starts doubled between 2004 and 2006, and investment on new facilities was growing rapidly. “Growth in hospital construction has exploded in the past few years and it shows few signs of stopping.”

According to a 2007 report from Reed Construction Data/RS Means, in 2008, new facilities spending was projected to increase by 14 percent.

But 2008 and 2009 were years that sorely tested existing master facility plans. Many organizations had to postpone, cancel, or rethink projects that had been approved and were under way. Now construction projects are beginning to be revived, but at a moderate rate, and often with scaled-down scope. Healthcare providers are being challenged by several factors, including tighter capital markets and the uncertainties that healthcare reform has created. But as hospitals begin the capital thaw and replace obsolete facilities or expand to better serve their communities and the expected influx of more patients, many expose themselves to the risk of making foreseeable mistakes that can doom equipment budgets and timelines before the project even gets off the ground.

In the April 2011 issue of hfm, Darren Vianeuva addresses the eight most common problem areas. Here are two of these the areas he discusses.

Inadequate resources from the start

The best way hospitals can avoid having a capital project become a manager’s back-burner issue is by making sure the project has adequate resources at its launch. At a minimum, the project should have at least two dedicated project managers whose sole responsibility is to shepherd the capital project through its key milestones. These project managers should work in concert with department managers, ensuring that both the everyday business of the hospital and the capital project get done.

Over-reliance on equipment planners

The root cause is a misunderstanding about the role equipment planners play in the development of a project budget. Equipment planners earmark funds for the CT scanners, computerized provider order entry system, beds, and other equipment needed for the new facility. But because there is little concrete information to work from in the early planning stages of a project, equipment planners make projections based on end-user feedback (when available), professional experience, and databases about the type of equipment that will eventually be needed. In effect, they use placeholders to develop a budget. Where many organizations get into trouble is in mistaking the placeholder equipment outlined in the budget for the actual equipment that will be purchased in the project’s later stages. This mistake creates unrealistic expectations among department managers who anticipate having high-end equipment or specific brands that may not even be appropriate for the organization’s actual need.

Read about six more of the most common capital project problems in the April 2011 edition of hfm.