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Hospital construction continues to be costly, complicated

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Building a hospital requires flexibility and foresight -- as well as a substantial amount of funding, a group of health care and construction professionals agreed at a recent Daily Transcript roundtable.

"Building a new hospital in California can cost $2 million a bed," said Bill Littlejohn, CEO of the Sharp Healthcare Foundation.

Why the hefty price tag? The costs associated with hospital construction add up quickly. After all, hospitals these days have to be on the cutting edge.

They not only need the latest in medical equipment, but they also need to accommodate the infrastructure that comes with the ongoing push for wireless health care and electronic medical records.

Costs are driven up further due to regulatory hurdles for hospital builders, some roundtable participants said.

The Office of Statewide Health Planning and Development, or OSHPD (colloquially, "osh-pod"), is the state government agency that regulates hospital building.

Well-intentioned higher standards can also have the unfortunate side effects of doubled time and doubled cost.

"The cost of construction in health care is out of sight relative to what it would be if it weren't going through OSHPD," said DPR Construction regional manager Jay Leopold, who is overseeing construction of the $950 million Palomar Medical Center West in Escondido. "A medical office is exponentially less, strictly because of the regulatory process it goes through."

Also, subcontractors tend to raise their bids to price in any supposed regulatory risk, said Randy Leopold, senior architect for University of California, San Diego's health facilities.

His department had reduced some of the bids by volunteering to assume all the OSHPD risk, he said.

The average hospital takes seven to 10 years to build, which complicates the process of incorporating the newest technology.

"That's the challenge for us: Things are moving so fast, that an average hospital is obsolete by the time it's built," said David Tam, Palomar Pomerado Hospital chief administrative officer.

Building flexibility into the building as well as the design process can drive up costs even further, Randy Leopold said.

"Holding back work or making late decisions is a benefit to the facility, but it comes at a premium," he said.

Jay Leopold described the process as building a box for technology that the hospital hasn't committed to yet.

The need for flexibility has pushed the industry toward embracing "integrated project delivery," Jay Leopold said: basically, bringing together those involved in the construction and design of the hospital, with those who will manage and use the facility to build the best facility possible.

For example, Palomar Pomerado is incorporating "green" features to save on operational costs, Tam said.

Disposing of medical waste, for example, can be very costly, and rethinking the system can help save money.

Hospitals also have to be forward thinking about how aesthetics and room design affect patient psychology, healing and overall well-being.

Rooms in Sharp's newest hospital features three "zones": for the patient, the patient's family and the health care professional.

Also participating in the roundtable were Randy Henniger, director of sales for the NCE Computer Group; David Chang, director of outcomes research with UCSD Medical Center; Noel Gillespie, Procopio partner and chair of Procopio's wireless health care and medical device practice group; Martha Heubach, Vibra Hospital CEO; Ed Martinez, executive director of the San Ysidro Health Center; and Julia Running, St. Paul's Senior Home chief operating officer.

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DPR Construction

Company Website

5010 Shoreham Pl., 0
San Diego, CA 92122

DPR Construction Executive(s):

Jay Leopold

  • Regional Manager

Scott Strom

  • Preconstruction Manager

Brian Gracz

  • Project Executive

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