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Financial risk in healthcare design projects is easier to manage when organizations keep options open, make better use of existing space, involve builders early, and commit to procurement and scope deliberately. These steps cannot remove uncertainty in reimbursement, labor availability, material costs, or demand, but they can help a health system make informed choices before major costs become difficult to change.
The four strategies below come from NBBJ authors Andrea Rufe, Andy Snyder, and Molly Wolf, who described project examples in a 2025 article for Building Design + Construction. Their reported outcomes are examples, not independently validated guarantees. The practical question for any project team is not simply how to cut the construction budget, but how to preserve financial and operational choices as needs evolve.
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1. How can an adaptable master plan reduce financial risk?
An adaptable master plan gives a healthcare organization more than one viable path as demand, available capital, and market conditions change. Instead of treating a long-range plan as a fixed promise to build everything at once, use it to compare scenarios, identify what must be delivered now, and preserve options for later.
NBBJ describes this approach through its work at the University of Washington Medical Center. The team developed multiple inpatient scenarios. One would provide the full required area up front, leaving flexible shell space to fit out later. Another would stage smaller projects over a 20-year horizon. The first scenario required more initial capital but could reduce lifetime investment; the second offered more opportunities to adjust scope to evolving needs and available capital. The article does not quantify the difference, so these are tradeoffs to assess for a particular institution, not a universal financial ranking.
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To make a scenario comparison useful, put the alternatives side by side and ask:
- What capital is required at the start? A larger initial commitment may secure capacity or avoid some later work, but it can constrain other investments.
- What can be deferred without disrupting care? Shell space or future phases may preserve flexibility, provided the building systems and site can support later completion.
- How quickly might demand change? A staged option can respond to shifting service needs, but later phases may face different costs and operating conditions.
- What is the expected lifetime investment? Compare the long-term cost of each scenario rather than treating the lowest first-phase budget as the cheapest option.
- Which services can help fund other needs? NBBJ notes that prioritizing revenue-generating service lines may help support lower- or non-revenue-generating services. That is a planning consideration, not a guarantee of future revenue.
Teams should make assumptions visible: expected service demand, phasing dates, capital availability, and which spaces remain flexible. Revisit the scenarios when those assumptions materially change. A plan that clearly shows what can be built, deferred, or adapted gives decision-makers a more useful framework than a single preferred layout.
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2. Should a healthcare organization renovate, consolidate, or build new?
Before committing to a new building, test whether existing real estate can meet the need through more efficient use, consolidation, infrastructure work, seismic improvements, or reuse. New construction may still be necessary, but it should be compared against these alternatives using both capital and occupancy considerations.
NBBJ reports that UC Davis Health consolidated ambulatory care from three locations to one. The changes included improved exam-room utilization, refined space standards, and universal department plans. The firm’s article attributes $150 million in construction-cost savings and $1.1 million in occupancy-cost savings to the project. Those are NBBJ-reported figures; the article does not provide an independent audit, baseline, or calculation method. They should be treated as a case example rather than a savings forecast for another health system.
The broader lesson is to evaluate the capacity already in the portfolio before adding square footage. A structured options review can include:
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- Space use: Are exam rooms, clinics, or support spaces used efficiently? Can scheduling or space standards improve capacity without adding area?
- Consolidation: Could services operate effectively from fewer locations, and what changes to patient access or operations would that require?
- Building condition: What infrastructure, seismic, or other improvements would be necessary to continue using an existing facility?
- Care suitability: Is a building appropriate for the intended service level? A facility that cannot support high-acuity care may still have value for offices, telehealth, community services, or behavioral-health uses.
- Total cost: Compare construction and occupancy costs, along with the work and disruption required to adapt existing space.
Reuse does not mean forcing every building into a clinical role. NBBJ specifically describes repurposing facilities unsuited to high-acuity care for other uses, including offices, telehealth, and community or behavioral-health services. The decision should match the facility to an appropriate use rather than assume that every site must be rebuilt or retained as-is.
For each option, document what it would take to deliver the required services and what constraints remain. This lets leaders compare renovation, consolidation, repurposing, and new construction on a common basis instead of treating a new building as the default answer.
3. How can early collaboration keep healthcare construction costs aligned with the budget?
Bring general contractors and trade partners into planning early, and keep estimating active as the design develops. This gives the team more chances to identify budget pressure while scope and systems can still be adjusted.
NBBJ recommends collaborative delivery approaches, continuous cost estimating, and target-value design. In practice, the aim is to connect design decisions with current project-specific pricing, rather than wait until the design is advanced to find out whether the proposed scope fits the available funds. Early benchmarking against comparable projects can help set initial expectations; as the project becomes more defined, estimates should become more specific to its scope and conditions. The authors also suggest considering an independent review of estimates.
The OHSU hospital expansion is the article’s example of a collaborative approach. NBBJ describes an integrated project delivery model, cluster and functional teams, close relationships with trades, and a “big room” for coordination, including a virtual version during the COVID period. These are reported project practices, not proof that one delivery model will produce the same result everywhere. Their value is in creating routine opportunities for the people responsible for design, construction, and systems to resolve issues together.
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Cost alignment should not be reduced to the construction price alone. The article urges teams to consider operating costs, staffing, retention, and return on investment alongside initial construction cost. A design change that lowers first cost but makes staffing or long-term operations more difficult may not reduce the organization’s overall financial exposure.
A practical cost-control rhythm can include:
- Set a shared basis for the budget. Define the scope and assumptions behind the target so designers, builders, and owners are pricing the same project.
- Benchmark early. Use comparable projects to identify an initial cost range, recognizing that early comparisons are not a substitute for project-specific estimates.
- Update estimates at design decisions. Price the developing project as scope and systems become clearer, and flag potential gaps while alternatives remain possible.
- Review independently when useful. An outside estimate review can provide another perspective on assumptions, scope, or cost exposure.
- Assess lifecycle implications. Consider operations, staffing, and retention as well as capital cost when weighing alternatives.
When an estimate exceeds the target, the team needs choices rather than a last-minute across-the-board cut. A clear record of scope priorities and cost implications makes it easier to decide what to change, what to preserve, and whether the budget itself needs reconsideration.
4. What should a healthcare project order early, and what should it defer?
Early procurement can help manage exposure to price changes and coordinate complex systems sooner, but it also commits the project before every detail may be settled. Teams should weigh schedule and price benefits against design certainty, storage, handling, and the cost of changing or holding an item.
NBBJ identifies elevators, HVAC equipment, and chillers as examples of major items that may be bought early. Its OHSU example included trade contracts during design, design-phase submittal coordination, and shop drawings integrated into permit packages. These practices can help align procurement and design work, but their suitability depends on the project’s scope and readiness.
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Prefabrication is another possible tool. The authors describe it as a way to improve consistency, reduce site labor, and shorten schedules. At Atrium Health Carolinas Rehabilitation Hospital, they report that headwalls and toilet pods were prefabricated and stored locally. The same strategy can create new costs and logistical needs: bulk purchases and early orders may require storage space, incur storage expenses, or lock in a design before requirements are fully settled.
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Before authorizing an early purchase or prefabricated component, assess:
- Price and schedule exposure: Is there a meaningful risk that waiting will affect price or timing?
- Design certainty: Are the requirements stable enough to commit without costly changes?
- Coordination: Can the item’s submittals, interfaces, and installation requirements be coordinated with the design and permit process?
- Storage and handling: Where will it be held, for how long, and what costs or risks does that create?
- Labor and consistency: Could off-site fabrication address a site-labor or quality-consistency concern, and what dependencies would it introduce?
- Cost of commitment: What happens financially if the project schedule, design, or demand assumptions change?
Not every future need should be treated the same way. In the OHSU example, NBBJ distinguishes a future chiller option from reserve emergency-power capacity built in at the outset. The contrast illustrates a project-specific decision: defer some equipment while preparing infrastructure or capacity for another need. It is not a general rule that chillers should wait or that emergency power should always be sized in a particular way.
Early procurement is most useful when the team understands the tradeoff and has a plan for storage, coordination, and change. If requirements are still uncertain, the cost of preserving flexibility may be lower than the cost of an early commitment that later needs to be altered.
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Each strategy addresses a different source of exposure, but the strongest planning process connects them. An adaptable master plan identifies what can be staged. A real-estate review tests whether the need can be met without a new building. Early collaboration checks whether the preferred scope fits the budget. Procurement decisions then determine when the project should commit to specific items and systems.
For example, if a service demand forecast changes, the organization can revisit the master-plan scenarios before funding a later phase. If existing capacity can be improved or repurposed, that may alter the amount of new space required. If new construction remains necessary, repeated estimating and early builder input can help make the scope and cost consequences visible. Finally, only components with sufficiently stable requirements should be considered for early order or prefabrication.
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The underlying discipline is to preserve decision points. Avoid treating every early estimate, space assumption, or procurement choice as fixed when the evidence is still developing. At the same time, flexibility has a cost: staging may require later investment, holding space may require infrastructure, and delaying a purchase may expose the project to future price or schedule changes. The right approach is the one that makes those tradeoffs explicit for the organization’s actual needs and capital limits.
As the NBBJ authors put it, “Financial uncertainty is inevitable, and it’s impossible to predict the future.” The implication is not to guess more confidently; it is to plan for more than one future and decide deliberately which commitments are worth making now.
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Frequently Asked Questions
Can another hospital expect the same savings UC Davis Health reported?
No. The $150 million construction and $1.1 million occupancy figures are NBBJ’s reported project outcomes, and the article does not give a calculation method or independent validation. A different organization would need its own baseline, scope, and cost analysis before estimating potential savings.
Is the $45 billion healthcare construction figure a current forecast?
No. The 2025 article refers to an estimate of $45 billion in construction projects in 2023. It should be read as a dated figure for that year, not as a current pipeline total.
What reference can help a team plan healthcare facility projects?
The Joint Commission’s Planning, Design, and Construction of Health Care Facilities, 5th Edition covers healthcare facility requirements and topics such as risk assessment, commissioning, planning, design, and construction. It is a professional reference, not a substitute for project-specific financial and technical advice.
Is there a healthcare facilities project-management book for the full project lifecycle?
Dana E. Swenson’s 2023 Facilities Manager’s Handbook for Health Care Project Management addresses planning, design, construction, and operations. The bibliographic record identifies the publisher as the American Society for Health Care Engineering of the American Hospital Association.
