Making Healthcare Construction Procurement as Simple as Ordering Donuts

What if construction procurement could be as easy as getting a dozen donuts delivered?

According to Scott Creekmore, Gordian’s Vice President for Healthcare, it can. Technology and the proliferation of data have made it possible to do just about anything.

So when it comes to healthcare construction, why aren’t more health systems using data to monitor costs instead of asking for quotes and taking a contractor’s word for it?

“We use data and technology to help us with project management and to drive efficiencies in our processes,” he explained. “But when it comes to actually deriving and delivering costs, we don’t use it that much.”

Yet hospitals and healthcare systems can benefit from leveraging the power of data to make informed decisions about costs and enhance the transparency of a project, whether renovating a lobby in a medical office building or a nurse call station in the NICU unit.

So how can on-demand data be used to control and predict construction costs? That’s the question that Creekmore presented to the audience at HealthSpaces.

Actionable Insights for Decision-Making

Using the example of what it would cost to paint one square foot of a room, he walked through the thought process to obtain the essential data needed to determine the final cost of a project, asking questions like:

• What type of paint?
• Are we comfortable with what the technical specs say about the amount of square footage a gallon of paint will cover?
• What equipment do we need? A roller, brush, or sprayer? Tarps?
• What's the going rate for a painter in our area? Is it union, prevailing wage, or Davis-Bacon?

“We tend to think of construction as this whole, but if you break it down, and you use data, then to paint one square foot of wall it just comes down to material, equipment, and labor,” Creekmore noted. “So if we can put that together, we have data points to help us be predictive and analytical.”

Everyone’s data points will be different depending on factors such as location and labor rates. So that is something that has to be built specifically for your organization, and then you can expand upon it. Think of a project as a combination of little tasks.

From Data to Decisions

So, once you have all the data points, how do you turn this into action?

First, talk to the contractors, show them the data, and ask them what their markup would be. The goal is to ensure consistency and control, so you’ll want to set some parameters around those markups, such as parameters for location; working hours for acute, non-acute, or critical areas; and other price adjustment factors.

"The data boom really has made in-demand construction a reality."

“Once you have your data and your tasks, every time a project comes up, you can just grab that task, put in the quantity, the contractor puts in his adjustment factor, and that’s your total, ” Creekmore said. “You have much more predictability, much more transparency with that. Then you can use data and software to help execute it much more quickly. No longer are you guessing.

‘If 20 years ago I told you that I was going to order donuts from my phone, nobody would have believed that. Now it really is that simple. If we want change but don’t change, then we won’t change,” he concluded. “The big picture is that the data boom really has made in-demand construction a reality.”