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Mitigating Risk

Article by Chris Kay, President and Chief Operating Officer of Hammes Company

The stakes have never been higher for healthcare executives contemplating major capital facilities projects.

Business practices are being transformed. It used to be enough for providers to differentiate themselves on the basis of delivering the best quality healthcare. But in this era of disruptive change, they also need to compete on price and do so in a highly unpredictable environment fraught with strategic, financial and regulatory risks.

Fortunately, when it comes to capital facilities projects, mitigating risk and reducing costs go hand in hand. In this article, we will examine:

  • where and why healthcare capital facilities projects go awry
  • several ways to overcome inherent hurdles and turn them into milestones,
  • key questions to ask that will keep your mind set on a successful project, and
  • effective and strategic steps to take that ensure you, your team and your project will stay on track and on time.



Perhaps the most important tactic to employ when embarking on a new capital facilities project is to let history be your guide. By identifying and understanding the problems and issues that might have been experienced with previous projects, you will be better able to avoid those same pitfalls on your current projects.

Few healthcare executives enjoy thinking about what could go wrong with their projects. But those who ignore potential risks do so at their own peril. A more prudent approach is to take a frank look at the results of previous facilities projects, including both what has succeeded and what has failed – especially what has failed.

This learning process might require going outside your own system, experience and comfort zone to enlist the aid of individuals and organizations with a more comprehensive and global view of healthcare facilities development. Tapping these external resources can better enable you to plan your projects in a way that better mitigates risk and contains costs.

When we consider where and why healthcare facility capital projects go wrong, we can often identify some general trends. Projects that go awry usually do so because they are:

  • Approved too early, before there is clear definition of scope
  • Approved before performing a thorough review of potential risks
  • Based on faulty or overly optimistic market assumptions
  • Based on incomplete and/or overly conceptual cost information

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