30 Jan 2025, 17:22
The Parliamentary Budget Office has just published a note on Hospital Construction Costs. The note explores the complexities of hospital construction and includes a dataset of 356 hospitals, detailing construction costs, number of beds, and area in square meters.
Read the full report HERE.
Annette Connolly, Director of the Parliamentary Budget Office said, “the note provides an in-depth analysis of hospital construction costs, highlighting key factors and the associated risks.”
Some of the key findings from the analytical note are:
- New Children's Hospital (NCH): The cost of Ireland’s new NCH is above average when compared with other children’s hospitals in the dataset. It is not the world's most expensive hospital, whether measured by cost per bed, per square meter, or in total.
- Elective Hospitals: The indicative up-front costs of the proposed new elective hospitals in Cork and Galway appear to be high on a per square metre basis when compared with other similar hospitals in the dataset.
- Whole Lifecycle Cost of Hospital Buildings: The whole lifecycle cost of hospital buildings (i.e., capital expenditure plus operating expenditure over 30 to 100 or more years) is primarily driven by operational costs (particularly labour costs). Capital expenditure for a new hospital building is equivalent to circa 5% to 10% of its lifetime operational expenditure.
- Design Maturity: Developing a high-quality, peer-reviewed, and mature design before commencing a major construction project reduces the risk of a cost overrun.
- Project Management: Effective project management for large-scale capital projects requires expert personnel. It also requires planning, internal controls, change management systems, a formal gateway process, and an assurance framework.
- Flexibility: Hospitals should be designed to allow for future alterations and expansions.
- Medical Equipment Planning: Integrating medical equipment planning, alongside new facility design reduces late design changes, delays, and cost overruns, while also allowing flexibility for accommodating new technologies.
- Brownfield Sites vs Greenfield Sites: Urban or brownfield sites pose challenges such as site clearance, decanting, and remediation works. There can also be limitations on access for materials delivery. Building works in urban areas may contribute to congestion and the need to temporarily relocate services to create the necessary space to build. Greenfield sites offer fewer constraints and greater flexibility for phased construction but may lack the synergies, clinical benefits and workforce access found in co-located or urban sites.
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