Top 5 Risks & Mitigation Strategies: Healthcare Facility Owners

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e-Builder.net 800.580.9322 info@e-builder.net 03/27/18 WHITE PAPER 2 Healthcare facility owners managing capital improvement programs face a diverse range of risks that can negatively impact schedule and a cost-effective project delivery. Typically, these programs involve large expenditures, bring together parties with competing interests, and must address complex conditions and potential public scrutiny— all of which adds risk to already difficult undertakings. In a time where capital is tight, proactive owners have taken steps to minimize the chance for delays or overruns by enabling better project controls that provide measurable cost reductions. This white paper will identify the top 5 risks facing healthcare owners managing ongoing capital construction projects and provides a summary of the strategies taken to mitigate these risks. For the purposes of this white paper, RISK is defined as an event, variable, process or activity that can create liabilities for an owner leading to: 1. Damage to reputation 2. Cost overruns and schedule delays 3. Claims and disputes 4. Regulatory noncompliance According to Dodge Data & Analytics 91% of owners report having projects exceed budget. • About two-thirds (65%) report infrequent cost overruns (on less than 25% of their projects). • 17% say that a majority of their projects exceed budget. Healthcare Construction—It's Risky Business Defining Risk as It Relates to the Construction Industry How Much Over Budget? Among the projects where healthcare owners reported exceeding budget over two thirds (67%) are 5% or more over budget. Know the Numbers! Owners Exceeding Budget Amount that Projects Exceed Original Capital Allocation Projects that Exceeded Budget Percentage of healthcare owners in each of the five performance brackets for how often the final construction cost exceeded the budget anticipated at the time of captial allocation on recent projects. 5%-10% over budget 38% Less than 5% over budget 33% More than 10% over budget 29%

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