Private finance initiative (PFI) schemes have played a crucial role in developing the UK’s healthcare provision over the past two decades, but the funding model has come under considerable criticism.
Mounting costs and private sector operator profits accumulated from public funds means that PFI hospitals currently cost the NHS an estimated £2bn every year in maintenance and operational costs. That equates to more than £3,700 every minute.
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PFI hospitals have often performed poorly during the operational phase because the built asset has been designed and constructed within a funding model that puts commercial considerations first. Meanwhile, the operational contract, typically over 25-35 years, has seemingly involved no accurate forecasting, no accountability for the unitary charge applied and no cap on profits.
Such has been the fallout from existing PFI contracts that public-private partnership (PPP) funding models have now been revised, driven by attempts to strike a better balance between private and public funding that ensures greater NHS Trust involvement in the design, delivery and operational processes.
New PFI models for the UK – the non-profit distribution (NPD) model being reworked in Scotland, the mutual investment model (MIM) PFI alternative recently launched for Wales and a brand new PPP vehicle being developed for England – have been devised to prevent costs from escalating in the long term.
Tunbridge Wells hospital: Could BIM help future projects?
But making PFI schemes work better in the long term is not just about revising the funding models – the building information modelling (BIM) technology used to develop our new healthcare facilities will also be critical to embed long-term operational efficiency and maintenance cost management into the design process.
One of the elements that both BIM and the next generation of PPP models place at their core is an increased emphasis on early engagement from the end user during the design process.
If used to its full capabilities during model development, therefore, BIM could be critical in designing hospitals that address user requirements, perform better over time and answer financial considerations during both the build and operational phases.
The success of this approach will depend on best practice early engagement of all the private sector partners and public sector stakeholders, enabling the team that will be responsible for operating and maintaining the building to advise on ways in which the operational costs can be reduced, or at least controlled, over the contract period.
Historically, the FM provider has not usually been appointed until the build was well underway, by which time opportunities for reducing the operational costs had already been missed.
BIM offers the opportunity to incorporate feedback from the FM as part of the collaborative process, embedding requirements that more closely align to genuine occupational patterns into models that contain all the necessary data in a defined structure.
This data can then be connected to the IT systems of the operator, FM provider and hospital to provide a 3,600 understanding of how the hospital will perform as a working building.
For example, by attributing maintenance data such as the installation dates of light fixtures along with expected lamp life to model objects, FM providers can forecast replacement schedules and ensure they have enough replacement stock available at the right time.
In this way, BIM can deliver more functional and cost-effective PFI healthcare buildings by enabling architects to design them to perform (within the context of the budget) and to offer management and maintenance capabilities aligned to best value principles and real world practicalities.
The specification data within the model can be used to forecast maintenance intervals and costs, providing the Trust with greater cost certainty, improved accountability and increased operational efficiency.
BIM’s benefits in reducing capex costs, improving build quality and increasing interdisciplinary collaboration are only part of the story when it comes to healthcare PFI projects. We now need to build on these benefits by leveraging the full advantages of specification data, technology integration and whole lifecycle costing.
Burkhard Musselmann is principal and Joel Martineau is BIM operation leader at Stantec
Joel Martineau
Burchard Musselmann
