Healthcare

Follow These Guidelines To Reduce Costs in Healthcare Construction Projects

One thing that has gone away with evolving technology is a busy signal—the low-tone, honk-grind sound we used to get when someone was on the phone at the other end of a call. Then, you had a real-time clue the other person’s attention was focused on someone else. Now you are directed to leave a message whether the other party is on the other line, away from the phone, or simply doesn’t want to talk. Simply put: you don’t really know if they are busy or not.

We have a big challenge in the current Texas healthcare construction market. Contractors have as much work as they’ve had in a long while. Some would say, “We are busy, but always ready to take on new work.” Everyone wants to have a predictable flow of work to keep their talented staffs engaged and productive, performing the work they are trained for and passionate about doing. Even with this apparently insatiable appetite for more work, we see prices rise and contractors struggle to complete work as committed.

Two kinds of busy signals come up due to the energized level of construction activity. One comes in determining whether a contractor has sufficient capacity to do a good job on your project. There is a tendency to take on the additional job and figure out how to apply resources later. Ideally, contractors would like to line up their projects in order, have the team finish one, and smoothly transition to the next, and so on. Contractors who do this well are in demand, taking productivity and performance gains from one project and applying them to the next. In contrast, those who get ahead of themselves and over-promise tend to leave some aspect of their commitments short, causing disappointment (and additional work for others to compensate).

The second type of busy signal is competitive interest (or lack thereof) in your project based on backlog and timing of other work. One of the reasons construction costs have been rising sharply for some trades is the “too-busy” effect. While material prices have been relatively stable, it’s the availability of quality labor that’s been the problem. Once a contractor has its best teams lined-up on projects, they bring new workers (who may not have experience with the critical nature of healthcare construction) for work acquired beyond that, creating an unknown, higher-risk approach, increasing the bid price. Attracting qualified contractors who have labor capacity and timing that fits your particular project will result in the best possible outcome for all involved.

An effective way to deal with capacity and interest challenges is to work with teams that have resources that fit with the timing and demands of the project at hand. The following measures are useful in finding the right match:

  • Company fit (total applicable employees, availability of key team, current workload, and annual record of completions) – this determines if the project is in the “wheelhouse” and specific schedule of the company being considered.
  • Experience of key leaders (lead superintendents or supervisors of the project team, past successes on healthcare projects, references indicating good sensitivity to patient satisfaction) – this helps line up specific project requirements with the people responsible to plan ahead. You don’t want to have someone learning the details of your project for the first time on your job.
  • Safety Culture (not just safety metrics, but proven efforts the company takes to ensure everyone on the project includes safety and infection prevention as part of their every-day work activity) – planning the work safely leads to better efficiency, better quality, and eliminated surprises.
  • Additional resources of the company (support staff, peer subject matter experts, and technology infrastructure to assist the project team on special project challenges) – this is important as the project goes through inevitable ebb-and-flow of work activity on the project. Having support resources shows the capability and commitment of the company to successfully deal with problems during the course of the project.
  • Financial strength of the company (balance sheet, key cash and payment history indicators) – this ensures that the company is sound enough to handle the business and cash flow needs of the project. Some contractors may be good at their craft, but fall down when it comes to the money side.

Seeking out and qualifying contractor partners to include in the planning and construction of any project using these concepts has proven to produce successful results. At the end of this review, the level of leadership involvement and focus that can be expected is revealed through summary answers to these questions:

  • Is this project one that the company is dedicated to?
  • Do they have similar example projects in the company that they can look to for lessons-learned and innovative solutions?
  • Are they a leader in the healthcare construction field – showing that they have applied resources to develop expertise in the building type?
  • Is this project right-sized and right-timed for the contractor (not a stretch risk)?
  • Are they interested in a long-term relationship?

Positive answers to these questions confirm commitment of the company resources together with attention and focus from leadership to ensure the best possible project execution experience.

There are a lot of busy contractors in the market, but none stay busy all the time. Reaching out early in the planning process to match quality contractors’ cycle for new work with appropriate capacity will help diminish unnecessary costs and align team members to achieve the expectations that define success. Getting busy on a good connection beats fighting to get through “too-busy” all day long.

Steve Whitcraft, CHC, CPC edac, is director of healthcare for Turner Construction Co. and may be reached at [email protected]

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