Optimizing Cost Management in a Hospital Construction Project Lifecycle

Thesis Abstract

Despite substantial capital investments in hospital facilities, cost overruns and schedule delays remain pervasive challenges that compromise patient service delivery and fiscal sustainability. This study investigates how an integrated cost management approach can optimize expenditures across the hospital construction project lifecycle, from pre-design through commissioning, by examining governance, procurement, design management, and on-site controls within a large metropolitan healthcare system. The aim is to develop a robust cost-management framework that reduces cost overruns by at least 15% and shortens decision-making cycles during critical milestones. Specific objectives include (1) identifying main cost drivers and their interdependencies across project phases, (2) assessing the effectiveness of current cost-management practices and governance structures, (3) developing and validating a composite cost-performance model, and (4) formulating pragmatic recommendations for practitioners and policymakers. The study employs a mixed-methods design anchored in realist and contingency theoretic perspectives, enabling both explanatory and context-sensitive insights. The population comprises completed and ongoing hospital construction projects within the CityCare Health Network over a ten-year period (2015–2025), including five major capital projects and two major expansions, with a total project value range of USD 120 million to USD 720 million. A stratified sampling approach yields a quantitative sample of 40 project records supplemented by 20 in-depth qualitative interviews with project managers, cost engineers, architects, facility directors, and main contractors. Instrumentation includes a structured project-performance audit checklist, semi-structured interview guides, and cost-tracking datasets (budgets, earned value, change-orders, and finalities). Validity and reliability are addressed through triangulation, pilot testing of instruments, inter-rater reliability checks on coding, and Cronbach’s alpha for scale-based items, aiming for ? ? 0.80. Data will be analyzed using regression-based cost-performance modeling, structural equation modeling (SEM) to test the relationships among governance, risk, design management, and cost outcomes, and thematic analysis for qualitative data to identify contextual mechanisms. A module-based model specification will integrate quantitative findings with qualitative insights to produce a pragmatic cost-management framework. Key findings are anticipated to reveal that (i) early-stage cost governance quality and scenario-based budgeting substantially predict final cost performance, (ii) scope changes driven by design evolution disproportionately impact budgets when linked to late-stage procurement processes, (iii) integration of BIM-enabled cost verification and robust change-control procedures mitigates overruns, and (iv) organizational alignment between hospital governance bodies and construction teams moderates the effectiveness of cost-controls. The study expects to demonstrate that a combined mechanism—pre-award risk-adjusted budgeting, concurrent design-cost integration via BIM, formalized change-management, and continuous value-for-money assessments—produces superior cost outcomes compared to conventional management practices. The study's contribution to knowledge includes (i) a theory-informed, context-specific cost-management framework for hospital construction projects, (ii) empirical evidence on the relative importance and interaction of governance structures, design management, procurement strategies, and on-site controls in mitigating cost overruns, (iii) methodological advancement by applying SEM to quantify complex causal pathways between organizational factors and project cost performance in healthcare construction, and (iv) practical guidance to hospital boards, project sponsors, and construction professionals on implementing a cost-optimized lifecycle approach. The research is expected to conclude that an integrated, governance-aligned cost-management model—grounded in realist understandings of how context shapes outcomes—significantly improves fiscal discipline without compromising functional and clinical requirements. Recommendations include instituting formal early-cost reviews at milestone gates, adopting integrated BIM-based cost management dashboards, refining risk-transfer and procurement strategies, and establishing continuous post-occupancy financial reviews to sustain value realization beyond project completion.