2014 1013 AIA Demystifying the Costs and Benefits of Green ...
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DEMYSTIFYING THE COSTS AND BENEFITS OF GREEN HEALTH CARE FACILITIES
PERKINS+WILL
Robin Guenther, FAIA, LEED AP BD+C
Breeze Glazer, LEED AP BD+C
CENTER FOR MAXIMUM POTENTIAL BUILDING SYSTEMS
Gail Vittori, LEED Fellow
5
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6
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Demystifying First-Cost Green Building Premiums in Healthcare
Study Authors:Adele Houghton
Gail VittoriRobin Guenther
“Hmm….cost more than WHAT?Do you mean…”
“…cost more than the exact same building without the sustainable features?... “…cost more than the capital budget or available funding?... “…cost more than other hospitals of comparable size and complexity?...
“…cost more to construct or to operate over its life span?...
Costing Green: A Comprehensive Cost
Database and Budgeting
Methodology
July 2004
Davis LangdonLisa Fay Matthiessen
Peter Morris
There is a very large variation in costs of buildings, even within the same building program category.
Cost differences between buildings are due primarily to program type.
There are low cost and high cost green buildings.
There are low cost and high cost non-green buildings.
Factors that influence feasibility and cost:
•Demographic location•Bidding climate and culture•Local and regional design standards, including codes and initiatives•Intent and values of the project•Climate•Timing and implementation•Size of building•Point synergies
“Sustainability is a program issue rather than an added requirement….
Perhaps the most important thing to
remember is that [it] is nota below-the-line item.”
12
473,000
336,000
400,000
208,000
72,000
28,000
0
100,000
200,000
300,000
400,000
500,000
Acute Care Crossover Facilities Outpatient
RANGE OF PROJECT SIZE AND TYPE
2008 LEED CERTIFIED HEALTHCARE COST PREMIUM STUDYProjects by Size
13
0%
1%
4%
5%
0.5%
3%
3.8%
2.0%
1.0%0.5%
5%
3%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
Certified Silver Gold Platinum
First Cost Premium by Level of Certification – BEFORE Grants + Incentives
2008 LEED CERTIFIED HEALTHCARE COST PREMIUM STUDY
14
0%
1%
2%
0%
0.5%
3%
3.8%
0.5% 0.5% 0.5%
0%
2%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
Certified Silver Gold Platinum
First Cost Premium by Level of Certification – AFTER Grants + Incentives
2008 LEED CERTIFIED HEALTHCARE COST PREMIUM STUDY
“….It’s telling us that all these things we hoped would happen—that we would have higher
employee satisfaction, higher patient satisfaction, better retention of clinical employees and nurses, better physician
recruitment—have scored higher due to the nature of this building.”
Richard Beam, Director of Energy Management ServicesProvidence Health & Services
The workplace supports health and well being
“Because of the integrative design process, elements of the project were incorporated if they met several criteria: they might be green, but also low maintenance or met criteria for infection control, etc.”
“The ‘first-cost premium’ inherently presents an item as a premium when it isn’t an add to the budget—in a process where we often don’t analyze the subtractions or synergistic savings. If orienting a building to optimize passive solar gain in winter reduces heating load with no impact on construction cost, where is that ‘savings’ tracked?”
The Challenges ahead…..
22perkinswill.com
LEED HOSPITALSPerspectives on Cost Premiums and Operational Benefits
Research update to 2008 study
15 LEED certified hospitals completed 2010-2012
Identified capital cost construction premium of achieving LEED certification
24
RESEARCH FRAMEWORK / METHODOLOGY
Gail Vittori, LEED FellowCo-Director Center for Maximum Potential Building Systems
+
25
RESEARCH FRAMEWORK / METHODOLOGY
Intent: For respondents to provide hard data and responses in the most efficient way possible
45 questions
1-2 hour time commitment
Summary
SUBJECT HOSPITALS – 15 TOTAL
15 subject hospitals - 9 design firms
NBBJKahn AssociatesESAShepley Bullfinch
Stantec (Anshen Allen)HKSHealth Facilities GroupMahlumPerkins+Will
27
SUBJECT HOSPITALS – 15 TOTAL
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
Certified Silver Gold Platinum
Square Feet
Mercy Medical Center West Lakes Hospital
Yale New Haven Smilow Cancer Hospital
Johnston Memorial Replacement Hospital
Boone Hospital Center
Hughes Spalding Redevelopment
Rockingham Memorial Hospital
Rush University Medical Center Tower
Kiowa County Memorial Hospital
St. Elizabeth Hospital
Texas Health Presbyterian Flower Mound
Tradition Medical Center
West Bloomfield Hospital
Laguna Honda Hospital Replacement Program
Ahuja Medical Center
30perkinswill.com
WHAT ARE THE BIGGEST BARRIERS TO CONTROLLING FIRST COST GREEN PREMIUMS ON A PROJECT?
Cost Control Barriers
31perkinswill.com
WHAT ARE THE BIGGEST BARRIERS TO CONTROLLING FIRST COST GREEN PREMIUMS ON A PROJECT?
When did the project team decided to pursue LEED?
Concept Design – 26%Schematic Design – 60%Design Development – 7%Construction Documents – 7%
Yes – 47%No – 53%
Was LEED included in the original project budget?
32
COST CONTROL BARRIERSLEED Overachievement
LEED Level Achieved?
2 Certified
5 Silver
7 Gold
1 Platinum
1 underachieved
5 achieved target
9 overachieved
LEED Level Targeted?
2 Certified
11 Silver
2 Gold
0 Platinum
“Hmm….cost more than WHAT?Do you mean…”
All projects that declare zero cost premium define the cost premium as an increase to the budget
There is no consistency to the construction features that are included in a capital cost premium
There is no standard method for calculating a premium
Components of a green construction premium are continually evolving as hospital baselines change
34
LEED HOSPITALS: PERSPECTIVES ON COST PREMIUMS AND OPERATIONAL BENEFITS
Defining a Capital Cost Premium
38
CAPITAL COST PREMIUMS
LEED CERTIFICATION LEVEL
PREMIUM
LARGE SUBJECT HOSPITALS > 100,000SF – 13 TOTAL
39
CAPITAL COST PREMIUMS
LEED CERTIFICATION LEVEL
PREMIUM
LARGE SUBJECT HOSPITALS > 100,000 SF – 13 TOTAL
41
LEED HOSPITALS: PERSPECTIVES ON COST PREMIUMS AND OPERATIONAL BENEFITS
Hard cost premiumsSoft cost premiums+
CAPITAL COST PREMIUM
=
42
SOFT COST PREMIUM COMPONENTS
56% Commissioning
66% Energy modeling
53% LEED Fee - contractor
72% LEED Fee – architect / engineer
91% LEED Registration and review fees
TOP 5 SOFT COSTS
Most cited as contributing to LEED cost premium
regardless of
impact to budget
43
SOFT COST PREMIUMS COMPONENTS
SMALL HOSPITAL EXAMPLE – 100,000 sf
= .15 - .3%
56% Commissioning
66% Energy modeling
53% LEED Fee - contractor
72% LEED Fee – architect / engineer
91% LEED Registration and review fees
BEST PRACTICE / NOT LEED SPECIFIC
LEED SPECIFIC
44
SOFT COST PREMIUMS COMPONENTS
LARGE HOSPITAL EXAMPLE – 500,000 sf56% Commissioning
66% Energy modeling
53% LEED Fee - contractor
72% LEED Fee – architect / engineer
91% LEED Registration and review fees
BEST PRACTICE / NOT LEED SPECIFIC
LEED SPECIFIC
= .1 - .2%
45
36% Stormwater Management - Quality
44% High Performance Roofing
50% Low Flow Bathroom Fixtures
50% Optimized Energy Systems
62% Bicycle Storage
HARD COST PREMIUMSTOP 5 HARD COSTSMost cited as contributing to LEED cost
premium regardless of impact to budget
46
HARD COST PREMIUMS
0
2
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100%
50%
In total, 40 different hard cost components were noted by at least 1
LEED Credit / Compontents
48
36% Stormwater Management - Quality
44% High Performance Roofing
50% Low Flow Bathroom Fixtures
50% Optimized Energy Systems
62% Bicycle Storage
HARD COST PREMIUMS
OPERATIONAL PERFORMANCE+MUNICIPAL BENEFIT
49
OPERATIONAL PERFORMANCEEnergy and Water Savings
-20%Energy Cost
Savings Reduction
LEED Gold
0% Reported Cost Premium
=
SUBJECT HOSPITAL
$7 million Operational Savings
2012-2022
50
OPERATIONAL PERFORMANCEEnergy and Water Savings
-20%Energy Cost
Savings Reduction
LEED Gold
0% Reported Cost Premium
=
SUBJECT HOSPITAL
49,000 tonsCO2 Avoided2012-2022
51
OPERATIONAL PERFORMANCEEnergy and Water Savings
-20%Energy Cost
Savings Reduction
LEED Gold
0% Reported Cost Premium
=
SUBJECT HOSPITAL
37,000 acresof forest offset
2012-2022
52
OPERATIONAL PERFORMANCEEnergy and Water Savings
-20%Energy Cost
Savings Reduction
LEED Gold
0% Reported Cost Premium
=
SUBJECT HOSPITAL
37,000 acresof forest offset
2012-2022
53
MUNICIPAL / COMMUNITY BENEFIT
Stormwater, 4
Energy, 2
General, 1
What Kinds of Benefits?
ROCKINGHAM MEMORIAL HOSPITALLandfill Gas Project
LEED NC Gold / Reported 4% Cost Premium
Yes – 47%No – 53%
54
FINANCIAL INCENTIVES
LEED projects in the 2008 study received green building related financial grants / incentives
– Local Utility– Private philanthropic– municipal
LEED projects in 2012 study received green building related grants
“no respondents reported that the lack of a grant or incentive prevented them
from achieving a desired LEED certification level”
62%
20%
55
Rush University Medical Center• Chicago, IL• 806,000 sf• 386 patient beds• 2012 completion• Perkins+Will
0% reported capital cost premium
56
• LEED was included in Basis of Design but didn’t inform a budget increase
• Targeted LEED Silver, achieved LEED Gold
• Largest LEED Gold hospital at the time
• LEED costs were never isolated because the project stayed within original budget
• Hospital was provided substantial financial benefits/ incentives to achieve LEED
• Direct Incentive tied to LEED Silver min.
RUSH UNIVERSITY MEDICAL CENTER
57
Green Roof required for
Chicago Green Permit Process
(fee waiver and expedited) + staff/patient amenity
59
Kiowa County Memorial Hospital• Greensburg, KS• 50,000 sf• 15 patient beds• 2011 completion• Health Facilities Group
5% reported capital cost premium
60
KIOWA COUNTY MEMORIAL HOSPITAL
• 2007 - Original Kiowa Hospital was destroyed by tornado w/ 95% of the town
• Town dictated all municipal buildings were required to achieve LEED Platinum
• Hospital was not required, but decided to meet the same standard
• Public infrastructure destroyed = opportunities for project synergies
61
KIOWA COUNTY MEMORIAL HOSPITAL
• LEED was included in Basis of Design
• Targeted LEED Gold, achieved LEED Plat
• LEED costs were never isolated due to special nature of the project
• Received substantial grants, incentives and corporate sponsorships for “green materials”– FEMA 75%– Kansas DOE 10%– USDA 15%
• Team estimated cost premium of 5%
62
On-site Wind Turbine provides 40% of base load electricity,
new town wind farm provides remainder. Reduces energy load
on municipal electricity generation
63
On-site bioswales treat stormwater and greywater, solves
significant sewage and drainage problems for the town
64perkinswill.com
BENEFIT VALUE PROPOSITION
Regulatory Requirement
Funding Requirement
Occupant Health&
Safety
Operational Efficiency
Community Benefit
Environmental Perf.
Civic Leadership
65
WHY DID THE OWNER DECIDE TO PURSUE LEED?
Occupant Health&
Safety, 23%
Operational Efficiency /
Reduced Costs, 8%
Community Benefit, 23%
Funding Requirement,
8%
Environmental Performance,
8%
Civic Leadership,
31%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1Sustainable Design Drivers
66
Occupant Health&
Safety, 23%
Operational Efficiency /
Reduced Costs, 8%
Community Benefit, 23%
Funding Requirement,
8%
Environmental Performance,
8%
Civic Leadership,
31%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1
WHY DID THE OWNER DECIDE TO PURSUE LEED?
Sustainable Design Drivers
MEASUREABLE
67
MEASURING OPERATIONAL BENEFITS
POST OCCUPANCY EVALUATIONS
OPERATIONAL SAVINGS
STAFF BENEFITS
PATIENT BENEFITS
Energy
Water
Retention
Absenteeism
Satisfaction
Satisfaction
Length of Stay / Recovery Time
68
MEASURING OPERATIONAL BENEFITS
POST OCCUPANCY EVALUATIONS
OPERATIONAL SAVINGS
STAFF BENEFITS
PATIENT BENEFITS
Energy
Water
Retention
Absenteeism
Satisfaction
Satisfaction
Length of Stay / Recovery Time
design firm
hospital
70
OPERATIONAL UTILITY SAVINGSWhat’s Being Measured?
80%
53%
0.00% 50.00% 100.00%
Energy Savings
Water Savings
% Selected by Respondents2013 Sustainable
Operations Survey
41%
69%
Healthcare Facilities Management MagResearch Survey
71
IMPROVED HEALTH OUTCOMES
IMPACT OF VIEWS TO NATURE
LESS
• Intakes of pain medication
• Recorded Pain
• Anxiety
• Fatigue
BETTER
• Satisfaction with their rooms
• Physiological responses
– lower blood pressure and heart rate
“Effects of Flowering and Foliage Plants in Hospital Rooms on Patients Recovering from Abdominal Surgery ” Seong-Hyun Park and Richard H. Mattson
IMPACT OF DAYLIGHT
• 1/3 Day Shorter Hospital Stay
o (all patients)
• 1 Day Shorter Hospital Stay
o (women only)
• 4.5% fewer mortalities
o (all patients)
“Dying In The Dark: Sunshine, Gender And Outcomes In Myocardial Infarction.” K M Beauchemin and P Hays 1998
72
EVALUATING OPERATIONAL BENEFITSWho’s Measuring What?
% Selected by Respondents
53%
33%
60%
40%
33%
0% 50% 100%
Patient Satisfaction
Length of Stay /Recovery Time
Staff Satisfaction
Staff Retention Rates
Staff Absenteeism
76
Employee Engagement 5%
Health and Well-Being 5%
Frequency of Undesirable
Health Outcomes 4%
From: Debra D. Harris, Ph.D. RAD. Return on Investment of a LEED Platinum Hospital. 2014
RESULTS FROM DELL CHILDREN’S POST-OCCUPANCY EVALUATION
Dell Children’s Medical Center of Central Texas Healing Garden – ©Mark M. Swedner, Seton
Healthcare Family
77
Turnover Rate:
3.57% vs. national average
6.53% vs. original hospital
Each Percentage Point
= $331,800 IN SAVINGS
Total Annual Savings $2.17M
From: Debra D. Harris, Ph.D. RAD. Return on Investment of a LEED Platinum Hospital. 2014
RESULTS FROM DELL CHILDREN’S POST-OCCUPANCY EVALUATION
Dell Children’s Medical Center of Central Texas Healing Garden – ©Mark M. Swedner, Seton
Healthcare Family
78
Injuries + Illnesses:
7% vs. original hospital
3% vs. other new hospitals in
Seton Network
Savings from original to
new hospital: $4.5M/year
From: Debra D. Harris, Ph.D. RAD. Return on Investment of a LEED Platinum Hospital. 2014
RESULTS FROM DELL CHILDREN’S POST-OCCUPANCY EVALUATION
Dell Children’s Medical Center of Central Texas Healing Garden – ©Mark M. Swedner, Seton
Healthcare Family
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