Development of a cost normalization procedure for National Health Care Facility Benchmarking Sharma, Vivek; Yun, Sungmin; Oliveira, Daniel P.; Mulva, Stephen P.; Caldas, Carlos H.
This paper presents a cost normalization framework for the National Health Care Facilities Benchmarking program developed by Construction Industry Institute (CII). Since 2009, The CII has been engaged in developing this benchmarking program with government and industry participants. In the effort, the methodology and process were developed to measure health care capital project performance in terms of cost, schedule, change, space, and best practice. Hospitals are complex building systems that are becoming more challenging with ever changing codes and regulations. Reliable comparison of hospitals built in different regions requires unique normalization approach tailored specifically for health care facilities. A single cost index had not achieved the desired results; therefore a combination of indices was employed to normalize various factors for proper benchmarking. In addition to location, time and currency, space was included for proper benchmarking and performance assessment. This paper covers the issues and challenges of normalizing the costs and spaces associated with health care capital projects, and present a practical example on how cost normalization is applied to a health care capital project. Challenges and considerations which are associated with cost indices applicable to cost normalization are also discussed. This study contributes to a better understanding of cost normalization amongst health care capital projects.
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