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%
