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B6 – Healthy, Resilient Buildings and Infrastructure: Using Economic Analysis for Success

Music Row 5

As progressive health care facilities are designed and built with greater rigor, resiliency, and levels of sustainability, decision makers must consider all the ways in which those facilities can be completed while meeting an environment of greater scrutiny. This daunting task is made even more complex when green building and regulatory standards are integrated into investment and operating decisions, along with the financial constraints inherent in each project. Given the limited funds and increasing demand for infrastructure, more building owners are seeking to utilize economic analysis to comprehensively assess investment options to make the best use of its funds. Collaborative, risk-based triple-bottom-line cost-benefit analysis is an ideal approach to understanding the overall net benefit of infrastructure projects.

We will present case studies where Robert and Jim, as architects, will discuss how they use TBL-CBA economics to deliver optimal projects. A handful of Department of Defense (DoD) hospital projects and other recent projects have incorporated the TBL-CBA framework directly into the decision making process to enrich the design and maximize efficient resource allocation. Triple Bottom Line-Cost Benefit Analysis (TBL-CBA) is an economic method that quantifies the financial, social, and environmental impacts of a given project or proposal, all in dollar terms. This makes it possible to justify a project uncontestably to key stakeholders whether they be investors, government officials, building owners, tenants or the local community.

The intent of the presentation is to how to comprehensively assess proposed hospital and health care facilities using cost-benefit analysis (CBA), also known as triple bottom line cost benefit analysis (TBL-CBA) and Sustainable Return on Investment (SROI). These are widely-used and accepted analytical approaches that provide a systematic process for calculating, monetizing, and comparing the economic benefits and costs of a particular project by putting benefits and costs in a common metric – dollars. The approach provides an evidence-based economic business case approach to quantify and attribute monetary values to the direct financial impacts, as well as broader social and environmental impacts resulting from an investment using empirical data and peer-reviewed literature. The importance of CBA for decision makers is that its results provide a quantitative measure of a project’s worthiness.

For health care facilities, the intent with CBA is to focus on a core group of design considerations, including energy, water, waste, and health-related capital investments. Examples of relevant incremental social and environmental impacts include greenhouse gas emissions, air quality, water quantity and quality, waste reduction, employee productivity, and improved patient health outcomes. The process follows a transparent methodology that obtains data, validates alternatives, assigns risk and probability, and communicates decision rationale. The modeling framework compares the social and financial benefits of the alternatives in relation to their costs for design, capital, replacement, and operating and maintenance. TBL-CBA allows health costs and consequences to be compared with not only other health-related costs and consequences but also non-health-related costs and consequences. Since both costs and consequences are measured in monetary units, it is possible to calculate whether specific healthcare design and investments delivers an overall gain to society.

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