The cost of Ireland’s new national children’s hospital (NCH) is above average but it is not the world’s most expensive hospital, whether measured by cost per bed, per square meter, or in total, according to the findings of a new report.
The report on hospital construction costs, which was authored by Peter O’Connor, a senior economist in the Parliamentary Budget Office in the Oireachtas, looks at 356 hospitals and examines the complexities of hospital construction.
An updated programme of building works for the NCH has been agreed, paving the way for the project to be completed this summer. Building on the site at St James’s Hospital in Dublin began in 2016 after years of disagreement over the location of the hospital.
The following eight years saw the cost balloon from €987 million to €2.2 billion, with repeated delays exacerbated by an increasingly fractious relationship between the builders, BAM, and the board overseeing the project.
The analysis of hospital construction costs shows the NCH is above average compared with other hospitals in the data set, whether measured by cost per bed, per square meter, or in total. However, it is not the highest cost hospital in the data set.
Of 41 new children’s hospitals built or being built across the world, it was the sixth most expensive in terms of cost per bed. The most expensive was a new children’s hospital in Dallas, Texas.
The second most expensive was in Adelaide, Australia while the new children’s hospital at the Royal Victoria in Belfast, due to open in 2030, is also more expensive per bed. These figures are based on both actual construction costs or tender price.
The new children’s hospital in Belfast is also more expensive per square metre than its Dublin counterpart. Of those measured, the Dublin hospital is thirteenth most expensive per square metre, while the Belfast hospital is the tenth most expensive.
The report also said the facility is expected to deliver a 60-70 per cent reduction in energy running costs compared to the existing children’s hospitals.
Separately, it found the proposed new elective hospitals in Cork and Galway have relatively high upfront costs per square meter compared to similar hospitals elsewhere.
The report said the whole life cycle cost of hospital buildings, encompassing both capital and operational expenditures over 30 to 100 years, is predominantly driven by operational costs, particularly labour costs.
Capital expenditure for a new hospital building constitutes only about 5-10 per cent of its lifetime operational expenditure.
“This underscores the importance of considering long-term operational efficiency and sustainability in hospital design and construction,” the report said.
“Developing a high-quality, peer-reviewed, and mature design before commencing a major construction project reduces the risk of cost overruns. Effective project management supports the successful delivery of large-scale capital projects.”
The report said flexibility in hospital design is another key consideration.
“Hospitals should be designed to allow for future alterations and expansions, integrating medical equipment planning alongside new facility design to reduce late design changes, delays and cost overruns,” it said.
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