W&I project faces $13M overrun

Women & Infants Hospital’s largest construction project in two decades, a five-story addition that is to include a new neonatal intensive-care unit and more obstetric beds, has been delayed by almost a year, and the expected $64 million cost has risen to $76.8 million.
The hospital, which has updated the R.I. Department of Health periodically on the progress of the project, first made officials aware of expected overruns in March, but it could only quantify the extra cost after signing a guaranteed-maximum-price contract in August.
This month, Dr. David R. Gifford, the state health director, approved the revised plans, with a $12,835,000 increase in the cost; a 3,000-square-foot reduction in the size of the addition, to 142,000 square feet; and an 11-month delay in the scheduled opening, to October 2009.
On the advice of the Health Services Council, which oversees such projects, Gifford also imposed new conditions on Women & Infants beyond several community-investment and other requirements already in place:
• The hospital must assess the impact of strategies to reduce emergency-room use and find “opportunities for improvement” by reviewing its own ER data, reporting its findings twice a year to the R.I. Department of Human Services and the Department of Health.
• The hospital must help lead a task force to recommend how to better care for low-income women of childbearing age, starting in Providence, in conjunction with state agencies and community healthcare providers, with a report due within six months.
• The hospital must spend as much as $70,000 a year on a neonatal nurse coordinator to facilitate discharge planning for Providence Community Health Center patients.
• The hospital must provide matching funds for parent consultants in the Neonatal Intensive Care Unit (NICU) and for a follow-up and care-integration program run by the state.
• Within three months of completing the project, the hospital must provide a breakdown of the total cost of the addition and how contingency expenses were allocated.
Under terms of the state’s initial approval of the project, Women & Infants has already been working on early-intervention efforts to care for children who have spent time in the NICU. At the same time, it has been working with community health care providers to identify at-risk pregnancies, develop a “medical home” for women, try to reduce premature births, and reduce emergency-room use.
In an interview last week, Constance A. Howes, the hospital’s president and CEO, was upbeat despite the cost overrun, the delays and the new requirements.
The hospital has enough equity built up that it can cover the entire cost overrun, she said, and fundraising is going very well, too – a campaign launched in conjunction with this project, dubbed “ONWARD,” had raised about $18.1 million toward its $20 million goal as of last week.
“It’s been really gratifying,” she said, “because the community as a whole has been very supportive of the project. I think they recognize the need, and individual philanthropists, when they see what we do, they’ve been moved to be very generous.”
Many gifts have come from donors who had never supported Women & Infants before, Howes said, and while foundations and corporations have contributed to the campaign, the largest gifts so far have been from individuals.
Asked what led to the cost overruns, Howes said that when the project was first approved in November 2005, the hospital only had a “conceptual design” for the addition. As the details were developed, the costs kept piling up.
“So twice we went back to the drawing board, literally, saying, what could we do that would take costs out of the project that would keep it under $64 million?” she said. Several cost-cutting adjustments were made, she added, but “ultimately they would’ve had to reduce the programmatic elements of the project, so they stopped.”
The design process took almost a year longer than expected, and $1 million of the overrun involves architectural fees. A rise in the cost of steel added $2 million; the electrical system came in $3.3 million higher than expected, and the heating, ventilation and air-conditioning system was $3.2 million costlier than planned. Plumbing, sprinkler and interior-finishing costs account for the rest of the overrun, according to a Health Services Council breakdown.
Ground was finally broken last May.
Asked how the project had been affected by the announcement in July of a proposed merger between Lifespan and Women & Infants corporate parent Care New England, Howes said she has found herself answering many questions about it.
“People are curious about it and want to know what impact it will have,” she said. “We actually believe the impact will be positive, and [after being told more] they agree with that. Most people have seen it as a very positive development.” •