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Prioritization and Cost health and medicine homework help

In respect to your facility plan -review the prioritization of projects–is yours an immediate, short-term, long -range or independent project?

In estimating the cost of your renovation or new construction -is your facility a minor, moderate or major renovation and why?

This is a 200-250 answer to the chapter below.  I am doing a Ambulatory care clinic geared towards a cancer center facility.  It will be a new construction, with specialists, imaging, labs, treatment rooms, patient rooms, and special areas for a patient to relax, like a living room.

“Identifying Specific Projects and Preparing a Phasing/Implementation Plan”

ONCE CONSENSUS HAS been reached on a long-range facility investment plan, the translation of the strategies and corre- sponding actions into defined projects can commence.
Specific projects are generally grouped and sequenced based on the fol- lowing:

Urgency, such as in response to a competitive threat, code issues, or revenue generation
Renovation or construction feasibility and cost effectiveness
Available capital at different points in time
Bandwidth of the organization to handle multiple ongoing projects
The detailed phasing/implementation plan lists each project, the required sequencing, and the corresponding capital needs over time. Various types of project planning and management software are available to track each specific project’s actual expected start date, completion date, and the person responsible for its oversight. Figure 7.1
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132 Healthcare Facility Planning: Thinking Strategically Copying and distribution of this PDF is prohibited without written permission.
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provides an example of a summary format used by a senior leadership team to communicate projects and dollars as part of the funding approval process.
Projects are generally grouped according to their priority as follows:
• Immediate priority for projects that must be completed as soon as possible (even though renovation or construction may take up to two years)
• Short-term priority for projects that must be completed within two to five years) and for which planning needs to be initiated promptly
• Long-range priority for projects where completion is anticipated to be needed beyond five years and after the immediate and short-term projects have been completed. The need for these projects would generally be reconfirmed at some point during the initial five-year time frame and may be based on achievement of critical benchmarks
• Independent projects should also be identified—for example, if a project’s timing and completion is relatively independent from the other projects or if specific benchmarks are established that would trigger implementation (such as a census increase over multiple fiscal quarters) Certificate of Need submittal
by a competitor, or donor funding
During the predesign planning stage, there is limited information available regarding construction conditions, the quality of construction anticipated, the construction bidding climate, and other factors that could influence the total project cost. Although it is necessary to estab- lish an early “order of magnitude” estimate for the cost of construction or renovation, estimates made at this time should be regarded with caution. Typically, the process for developing a preliminary cost estimate includes first estimating the base construction cost and then applying a series of factors or additional budget items to estimate the total project cost.
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To estimate the base cost of renovation, the anticipated cost of new construction can be factored as follows:
• Minor renovation includes construction with minimal demolition of existing walls and utilization of existing utilities, and it is usu- ally 25 percent to 35 percent of the cost of new construction.
• Moderate renovation assumes the reuse of the primary mechanical systems, with some demolition of existing walls, and it is usually 50 percent to 60 percent of the cost of new construction.
• Major renovation assumes the complete demolition of the existing walls and major reworking of the mechanical systems, and it is generally around 75 percent of the cost of new construction. However, some major renovation may actually be equal to or greater than the cost of new construction.
Base construction cost estimates are calculated and totaled for all facility components to be included in the project using either DGSF, if the project includes the renovation of specific departments, or BGSF, if the project includes new construction.
Once the base construction cost is estimated, the total project cost can be estimated by budgeting additional dollars for the following:
• Site work can be estimated at 10 percent for new construction.
• Multilevel parking can be estimated based on the national average of $11,315 per space (ENR 2004) and 40 percent to 60 percent higher for underground parking (Rowland 2004).
• Moveable equipment, furniture, and furnishings are some of the most difficult elements to estimate during predesign planning and may vary from 10 percent to 40 percent, depending on fac- tors such as the extent of equipment to be reused and vendor dis- counts. Typically, major imaging equipment is purchased separately from the construction budget, and it is therefore accounted for sep- arately. Alternately, a single dollar figure can be budgeted or a list developed of specific major medical equipment items.
• A building and construction contingency factor of 10 percent is usually added to allow for unknown costs that cannot be identified at the start of construction.
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• Project-related fees for programming consultants, architects, equipment planners, construction managers, interior designers, and so on may total 10 percent to 15 percent of the base construc- tion cost.
• Other costs, such as the cost of land acquisition, testing and inspections, administrative and legal fees, and financing costs, should be added as appropriate.
An inflation factor may need to be added to adjust the base construc- tion cost to reflect future construction conditions. Most contractors will adjust their construction estimates to the midpoint of construction to account for anticipated inflation in labor and materials if the project is large and to be constructed over a multi-year time period—for example, a 1 percent to 2 percent increase to the midpoint of construction.
After additional costs for all of the above factors are tabulated, they should be added to the base construction cost to arrive at the total proj- ect cost. Just as confusing net and gross space can lead to misunder- standings (as described in Chapter 2), confusing the base construction cost and project cost can also lead to problems. Facility planners, archi- tects, and even construction specialists often refer to “cost” without qualifying whether it is simply the base construction cost or the total amount that must be funded (project cost). This can be disastrous, because the project cost may be 50 percent to 70 percent higher than the base construction cost.
The preparation of a project cost estimate at the predesign (and schematic design) stage often presents a Catch-22 situation, where the desired outcome is difficult to attain because of inherent but well-intentioned conflicts of interest. Project cost estimates may be provided by one or more people involved in the facility planning process, including the architect, the construction manager, a profes- sional cost estimator, the hospital-based facility manager, or a facility planning or project management consultant.
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If asked to prepare the project cost estimate, an architect who may eventually be awarded the design contract may understate the com- plexity and cost of the project for fear that the project might be derailed or downsized and the design concept jeopardized. A construction man- ager who may eventually be charged with delivering the completed project on budget may provide an overly conservative estimate. Construction managers are most comfortable and confident with pro- viding cost estimates based on a set of detailed architectural drawings and specifications, and they naturally overcompensate when only limited information concerning a potential project is available. If the project cost estimate is too high, the potential project may be deemed infeasible or the project may be literally sent “back to the drawing board.” Valuable staff time and professional fees are wasted when the project is appropriate and affordable but derailed because of a conserv- atively high cost estimate. The same thing can happen when the project cost is understated and requires redesign midstream, resulting in expensive “change orders.”
This push–pull situation can be modulated with an adept facility manager who has experience at the particular healthcare facility. A hos- pital-based facility manager can provide historical comparisons based on previous renovation or construction projects at the specific campus. A knowledge of unique construction conditions, the quality of construction anticipated by the organization’s leadership, and the organization’s corporate culture regarding decision making have a major impact on the accuracy of early predesign project cost estimates. At the predesign planning stage, professional cost estimators will have little to contribute and, like construction specialists, may be overly conservative. Input from an experienced facility planning consultant will provide objectivity and will help an organization focus on the broader question: Can the specific organization implement its imme- diate and short-term projects with the available capital resources? As the facility planning process progresses and an increasing amount of detail is developed, some projects will require more dollars, but others will require less such that the overall budget will be appropriate.
Ultimately, a healthcare organization should hire planning, design, and construction professionals who can assist the owner in getting the best project within a fixed budget by evaluating various trade-offs and weighing the advantages and disadvantages. This may range from
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decisions related to operational concepts and their impact on staffing, equipment, and space needs to evaluating alternative architectural design solutions and comparing trade-offs between the quality and the quantity of space.
The planning of a replacement hospital or a new freestanding health- care facility requires a different approach, because the entire facility becomes the project. Although in some cases phased construction may be planned, a master project budget is generally developed that addresses all aspects of the project from start to completion. John Kemper’s (2004) book Launching a Capital Project provides an example of a sample master project budget that addresses the various costs associated with the planning, design, and construction of a new or replacement healthcare facility.”
 (Hayward 131-137)

Hayward, Cynthia. Healthcare Facility Planning: Thinking Strategically. ACHE Management Series Book, 20051101. VitalBook file.


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