Hospitals merging design, building to cut costs

Hospitals are having to take a long list of innovative steps to preserve their scarce capital as they wait out the U.S. economic slump. One that is becoming more common, experts say, is to merge the design-and-build stages of their projects, working with a single company that supplies both the architect and the general contractor.

This can save hospitals a great deal of cash. For example, the first free-standing hospital project in New York in more than two decades, which is using this "design-build" method, expects to save one-third on expenses. The project, a $269 million facility, is being designed and built by the HBE Corporation of St. Louis.

Officials with the hospital, the Orange Regional Medical Center, say that this was the only way they could have moved ahead with the new facility, due to open in March 2011.

According to Wayne Becker, vice president for new projects at the hospital, the traditional method of hospital construction would have typically cost $1 million to $1.5 million per bed. Using the design-build method, meanwhile, Orange Regional will cost about $720,000 a bed, with the fee negotiated based on the total cost of the project.

To learn more about this approach:
- read this New York Times piece