In California, hospital construction is also being spurred by SB 1953, the mandated seismic upgrades to the state’s acute care facilities that could cost as much as $60 billion to complete. A recent report by RAND concluded that “only a fraction of California hospitals will be able to marshal the financial, organizational and logistical resources to carry out large-scale construction programs to meet the law’s deadlines.”

Nonetheless, RAND has concluded that there are currently 61 large-scale construction projects in California related to SB 1953. Among them in Southern California are replacement hospitals for UCLA and City of Hope National Medical Centers; three projects involving Kaiser Permanente hospitals and a new main medical building for White Memorial Medical Center.

In California, pressure from labor unions is also a factor in rising construction costs. The belief is that dragging out construction projects will make hospital operators more compliant in collective bargaining. Sal Roselli, president of the Service Employee International Union’s United Healthcare Workers West (UHW), has pledged to delay some projects, particularly those of Sutter Health, the state’s largest not-for-profit operator.

Resistance has been strong so far. Sutter has devoted a portion of its website to listing capital projects that are being subject to labor interference, including construction of Novato Community Hospital north of San Francisco; Sutter Maternity Surgery Center of Santa Cruz; and the planned construction of a new facility for Palo Alto Medical Foundation. More recently, the California Health Facilities Financing Authority required Sutter to contribute $8.5 million to clinics and rural hospitals as a condition of approving a $958 million bond application. UHW took credit for the imposition of the condition, which it claimed was unprecedented.

Protracted delays in getting state approval for hospital construction projects are a costly hassle. Receiving and following input from the Office of Statewide Health Planning and Development (OSHPD) can take months, if not years. Getting OSHPD approval of drawings can take up to 16 months. And anticipating what OSHPD inspectors may request during a renovation where new construction interfaces with structures governed by older building codes can be even more difficult.

Construction plans are also very closely examined to squeeze out any workplace inefficiencies, a practice known as evidence-based design, which is a conscious effort to design hospitals and other healthcare facilities with employee productivity and efficiency and the patients and their families in mind. Savings come from less employee turnover, more efficient care provided and potentially shorter lengths of stay.

Aside from evidence-based design, hospital managers and architects are tinkering with ways to streamline the building process. For example, non-medical structures, such as food service, are physically removed from the acute care facility construction. These portions of the projects aren’t subject to OSHPD jurisdiction and are often less expensive to build. Another trend is three-dimensional informational modeling of the hospital building and its infrastructure on computers. This practice allows the various contractors and project managers to weed out physical conflicts between the ventilation, plumbing and electrical systems.

Lastly, purchasing building materials well in advance of constructions starts is proving to be a cost-effective strategy. In the El Camino project, for example, the new hospital’s steel was purchased nine months ahead of schedule, avoiding some significant price increases. Such pre-purchases are likely to occur more frequently in the future.