Development of a Cost Normalization Framework for Healthcare Facilities Cost Elements

Abstract

Healthcare facilities (HCFs) are complex building structures that are becoming more challenging with ever-changing codes and regulations. Previously completed projects become a basis for future guidance regarding costs and scope. A robust normalization framework to assess previously completed projects with today’s costs and location will benefit various stakeholders. The current study provides a complete picture for normalizing the overall project cost and phase cost by life cycle and HCF cost elements. This study aims to develop a cost normalization approach tailored to HCF-specific cost elements to extend the normalization framework for the overall project cost. Further, the researchers developed a distinct framework for normalizing the effect of shell space on the normalization of Total Installed Cost (TIC) to establish fixed cost adjustment rates for cold and warm shell spaces in HCFs, which can increase the accuracy of cost normalization of the overall project cost. This study identified an appropriate set of cost indices for normalizing HCF cost elements using publicly available indices. The cost elements identified for normalization included HCF-specific and Construction Specifications Institute Master Format (CSIMF) cost elements for assigning individual normalization procedures. This study provides individual and unique approaches for normalizing all identified cost elements, such as mechanical, concrete, etc. The initial framework was evaluated through a case study analysis that developed into the proposed approach built upon the collaborative efforts of academic researchers and industry experts. This study introduced shell space cost adjustment rates for warm and cold shell spaces to further develop a space normalization framework. This paper addresses the challenges of normalizing HCF project costs using the breakdown of HCF cost elements. Moreover, the paper provides the HCF’s overall cost normalization approach, emphasizing cost elements that allow accurate comparisons between various HCFs for early scope and cost guidance.