Healthcare organizations need to focus more on single-source delivery options like Design-Led Construction in order to capture speed-to-market advantages and minimize cost and risk moving forward.” That’s the core message of Deb Sheehan’s newest piece for Modern Healthcare, “Integrated approach is a best practice in health facility development.”
Poor Performance Creates Time for New Ideas
The piece highlights that while the historical delivery model of design-bid-build (this model has an owner contract with designer and contractor as separate entities) has driven strong results in the past, there is increasing pressure for new ideas. A 2015 KPMG report states that 53% of owners reported having suffered one or more underperforming projects relative to budget and/or schedules in the previous year and only 31% of the owners’ projects’ came within 10% of budget in the previous three years.
The Power of Design-Led Construction
Fortunately, healthcare organizations have been receptive to change and are beginning to try new single-source delivery models like design-led construction (DLC). These models allow the owner to contract one entity that is both the designer and the constructor – minimizing risk and streamlining performance and communications. Models like DLC are better routes for healthcare organizations – they allow CFOs to realize the most cost-effective solutions and maximize investment via real-time price tracking against target project cost throughout design and construction. They allow COOs to leverage concurrent actions across the design/build process to eliminate redundancies. They allow legal teams to feel better about contracts.
Success at Allegheny Health Network
Allegheny Health Network (AHN) in Pittsburgh is a paragon of the successful results DLC can achieve. AHN turned to DLC to create its Wexford Health & Wellness Pavilion. Having identified a need for diverse options focused on coordinated wellness in the Western Pennsylvania market place, AHN wanted to bring a transformational healthcare facility – that would improve patient convenience, care coordination and quality – to market as soon as possible. The DLC model allowed them to achieve a 22-month design and construction schedule (construction completed on time in 18-months – an estimated 30% faster than the DBB model would have achieved) while also adhering to an early established $57.4 million guaranteed maximum price and incurring $0 in error and omission change orders.