Integrated Project Delivery in Healthcare Construction: Evolving Strategies for Complex Facilities

In this episode of The Construction Insiders Podcast, host Jessica Busch explores Integrated Project Delivery (IPD) in healthcare construction, focusing on its evolution and effectiveness for complex facilities with guests Steve Howard and Michael Blasingim. The discussion covers the key aspects of IPD, including its benefits, challenges, and role in fostering collaboration among stakeholders in healthcare projects. The podcast also delves into the technological tools that facilitate IPD processes and examines future trends in the application of this delivery method for healthcare facilities.

Transcript

[00:00:00] Jessica Busch: Okay, welcome. On today's episode, we have Michael Blasingim and Steve Howard. Michael is with Layton Construction. He handles pre construction for the healthcare business unit. And Steve is one of our managing principals here at Cumming Group. I've invited them both here today to talk about a health care delivery method that we are seeing on a rise.

 Before we jump into our discussion, thank you both for coming. I know I have literally pulled you out of a meeting to get you here today and I'm going to send you back in there. But. Let's take a pause and talk about this IPD delivery method, also known as Integrated Project Delivery Method.

So thank you. Thank you both for joining me today. 

[00:00:46] Steve Howard: You're welcome. Glad to be here. 

[00:00:48] Jessica Busch: Awesome. As I mentioned, today we're gonna be talking about IPD and how this delivery method has evolved, especially in the healthcare arena. So before we jump in, for those that maybe aren't as familiar or our listeners that maybe are just new to the concept in general, can you give us a real quick overview of IPD and to set the stage of where we're going to go with this discussion in a little bit?

[00:01:18] Steve Howard: Sure. The IPD model has been around for a number of years, right? It's bred out of the lean theory and Toyota and manufacturing methodology. My experience with it began with Sutter Health in California, and they really looked at developing this integrated project delivery method to form some collaboration and build teams and align teams to work better together.

[00:01:39] Michael Blasingim: I think it's evolving out of the design assist arena. It's just a natural progression of where the market's going and how it can get better. And as projects progress, projects gets harder, projects get more complicated. And providing this approach is that next step to the antiquated design assist model.

[00:01:59] Jessica Busch: Is there anything that jumps out for IPD that is specifically different? Before we jump into the kind of bigger discussion about why it fits in healthcare, is there anything that really sets it apart in terms of a delivery method? 

[00:02:13] Steve Howard: IPD, they really look to structure the teams and align the teams.

I think there's a definition that's more of a collaborative alignment of people and systems and business practices and construction practices around, around a common goal. And really get the teams aligned to work together and to think together. It really revolves around setting up and organizing the team around a structure that gets all the stakeholders aligned around the common goal and they're involved from the beginning of the project, from the earliest stage of the projects and really get collaborative, right?

[00:02:44] Michael Blasingim: It's really bringing everyone together outside of the typical silo where everyone works, does their thing, and then you're constantly going back and repeating what you're doing and causing delays and change orders and RFIs. It's bringing everybody together one time and doing it correctly and just having that lean approach throughout the whole process.

[00:03:06] Jessica Busch: Okay. Collaboration seems to be the general umbrella that this delivery method falls under. . 

[00:03:11] Steve Howard: One other thing I'll add is true IPD revolves around a tri party contract. Everybody signs one contract. The owner, the design team, and the construction team all get together and they sign the contract together.

 They all take the same responsibility, they take the same risk, they put their fees at risk, and and when there's savings, they all benefit from the savings, right? And that's been the model of IPD from the beginning. There's a lot of owners that struggle with, they have standard contracts and they don't want to change their contract methodology.

And so that's taken it's made IPD harder to get a foothold because owners aren't willing to adjust their contract methodology. And out of that formed IPD Lite, which we still want to follow all the practices and procedures of IPD. But we still want to use our existing contracts. 

[00:04:00] Jessica Busch: I see. 

[00:04:00] Steve Howard: And so IPD Lite is really starting to take even greater foothold.

And those are the projects that we're working on together now. Our IPD Lite projects where we use existing contracts, but we form collaboration agreements and incentive clauses to help make things work. But we still use standard contracts. 

[00:04:16] Jessica Busch: I was going to, Let everyone know, you guys are currently working on a project together right now, so I think a lot of those examples will probably be able to come out as we continue our discussion, you'll have different perspectives, which will be interesting and so you mentioned I.

IPD Light. And then we obviously have been talking about IPD. Why is this delivery method So well suited for health care facility projects. 

[00:04:43] Michael Blasingim: Our health care projects are probably the toughest in the industry because we have so many moving parts, so many stakeholders, so many people we're trying to please and work around, whether it's, the different departments, whether it's the AHJs right now with the economy, the type of formas.

So it, it's really leading itself to these big complex projects. And having a an outcome that everyone can work around. Everyone understands their roles and responsibilities. And just taking a very complex project and breaking it down into pieces where everyone knows and understands their roles and responsibilities and all the stakeholders on the project are taken care of.

[00:05:24] Steve Howard: And healthcare, is complex with mechanical systems, electrical systems, technology, equipment, the deeds of patients and so many users and stakeholders, as Michael said makes healthcare projects very complex. It requires teams to collaborate and communicate to be able to coordinate all of the work that has to happen.

[00:05:42] Jessica Busch: You can't be in silos. 

[00:05:43] Steve Howard: And you can't, it doesn't work in silos and healthcare switched from traditional, long, long time ago, the design bid build model. To the design assist, negotiate a GMP, get contractors on early and, that's predominantly where healthcare has been in my experience for the last several years.

But IPD is getting a hold getting a foothold just because of the collaborative nature and it's making that work to an even higher level. 

[00:06:06] Jessica Busch: And so we've, you've mentioned it's the evolution and where it's going and the trend to push this way for the sake of collaboration.

How does IPD foster that sense of collaboration with stakeholders? Are there key roles that are important? And who typically participates, sitting down at the table to make sure those silos aren't there? 

[00:06:31] Steve Howard: To me, the, people are the key. People are what make this work. It's not companies.

We hire companies and we bring people on, but it's the teams that make it work. For our projects, we put a big emphasis on how we select our teams. So when we interview the the teams, we look for the people that, that truly can collaborate and can work together and be team players. And once we hire one firm, Together with that firm, we hire the next, and then as we bring people on, we all work together to bring on players that we believe can work together and can achieve the goal.

[00:07:00] Jessica Busch: Because they'll make or break it. 

[00:07:01] Steve Howard: It'll make or break it. People make the difference. And there are times that we've had where we've had people on board, even on my, our team, where they just don't get it. And one person can be a cancer to the whole team and we have to make quick changes.

[00:07:13] Jessica Busch: And that's with anything, you just have to be strong enough to be like, okay, we need to find a new fit. 

[00:07:16] Steve Howard: That's right. 

[00:07:17] Jessica Busch: It's time to change. 

[00:07:18] Michael Blasingim: And we sat down up front whether it's the architect, our subcontractors, Layton, Cumming, the owner. We made some rules of engagement.

[00:07:25] Jessica Busch: Okay. 

[00:07:26] Michael Blasingim: Where everyone's voices are heard. Everyone's voices are important. And when we're in our meetings, it's our cluster groups. Everyone speaking up just for the good of the project, whether it could be the drywall superintendent it could be Layton, it could be the architect, the, the, everyone in the room has a has a say and has the chance to have their voices heard.

And that was one of the rules of engagements we set up front and it's worked great on the project. 

[00:07:53] Jessica Busch: And including the owner, I assume, and Precon, and the GC, those are the participants at the table. 

[00:07:59] Steve Howard: Yeah, so we'll have the owner. We need the executive, leadership of the owner to be fully bought in and engaged in the project.

We have the full design team and all consultants engaged and involved in the project. And we have our contracting team, including our subcontractor trade partners, involved early. And everybody is brought together. To work together and everybody has a say we want all voices are heard and nobody's voice is more important than the other and we spent a lot of time on building that team and that collaboration and we organized teams at the at different levels, we have our what we call the cluster groups, which are work groups in different disciplines.

They get together every week and work to solve problems and empowered to make decisions. And when they need help, they go to our project management team, right? To give them that next level of help. And when there's big decisions, we'll go to the project executive team, right? But we want decisions made the lowest level to keep the work flowing and to get things done.

[00:08:56] Jessica Busch: And is that something that's a little different about this delivery method? There's been a lot of talk around the different offices, I've been going to lately and different delivery methods for different sectors have really been a hot topic and shifts and changes in the market.

But this talk about this real collaborative approach, these cluster meetings This seems a little different. 

[00:09:17] Michael Blasingim: a tremendous amount of trust that it goes into.

[00:09:19] Jessica Busch: Okay. 

[00:09:19] Michael Blasingim: And we've built that over the past year and a half, where we can have open and frank conversations. We have fun challenging each other. We do.

We have fun. Sometimes we scratch our heads during the meetings, but just it takes time and it takes, as Steve mentioned earlier, the right people in the room, it's not the companies, it's the people. But once you see it in action and people really start trusting each other and hearing each other it's really a dynamic process and really fun to be involved with.

[00:09:48] Steve Howard: It takes transparency, and people have to get over that. They're not used to being transparent with all of the inner workings of what you're doing. 

[00:09:54] Jessica Busch: The other partners in the room. 

[00:09:55] Steve Howard: But once people feel like I can be open and honest, and they're not going to beat me up for it and we can really get beyond that, we find that there's a lot of benefit and a lot of work.

And you got to break old habits in the way that we do work. And, designers like to design and present it to owners, and owners like to buy it, but we haven't checked with our contracting team, can we even afford it, right? So we spend a lot of time just making sure that we work together as one team to provide solutions that work for the project.

[00:10:22] Jessica Busch: And so you mentioned benefits, so I will jump there. What are these benefits for IPD when we're talking cost, schedule, quality of a project? What should people expect? 

[00:10:36] Michael Blasingim: There's some great examples there that we can give one of the things our group does. Is we full plan, not just the construction every week, but the pre construction and classic example I gave is we have this, billion dollar project and everyone's used to the schedule sliding, things getting pushed back.

And I know our executive team would call me and, Michael, when's this project going to start? Okay. It's going to start May 14th. No, really, when's it going to start? No, it's starting May 14th, and they're like, you're kidding. You're holding these schedules. That, that's one great benefit of it.

You can look at it. Because 

[00:11:10] Jessica Busch: you've had those discussions with all of the partners before.  

[00:11:13] Michael Blasingim: We meet every week. The trade partners are in the room, understanding what submittals are needed the owners, and Cumming is represented, talking cost. But it's just a it's really a fun process to watch, but that holding that schedule is a big, is a key thing that it's not typical in a project this large.

Another thing that the whole group worked on and is very proud of is the cost savings we were able to reach. Steve and Intermountain were set goals for us, targets to hit, and through the collaboration of everyone, we were able to hit those targets to where I think Steve moved the goalposts on us again and said, Hey, let's set a lower target now.

[00:11:51] Jessica Busch: And just to jump in, you two, you're one of your current projects you're working on together right now is Intermountain Health. And so I believe that's what you're referencing. Yeah. Yeah. Yeah. 

[00:12:00] Steve Howard: So for the past several years, we've been Cumming's been involved with Intermountain Health on a three hospital replacement program about 2. 2 billion program. 

[00:12:08] Jessica Busch: Not small. 

[00:12:09] Steve Howard: Yeah. Yeah. Not small, right? We had a lot of challenges and we started our first project, Lutheran Medical Center, right at the beginning of COVID. And there was a lot of challenges, right? But following this process, the hospital opened last weekend. And the team was able to deliver that project on a schedule 12 percent faster than normal through the challenges of COVID, and delivery and even with and we finished four and a half percent under budget and it, the project went really well and now we've started our second project.

[00:12:35] Jessica Busch: And this was using IPD?

[00:12:37] Steve Howard: Using an IPD light. And our second project is now St. Vincent hospital in Montana, which is about a billion dollar project. And we're working with Layton Construction on that. And I would say that the performance to date is beating all the metrics we had at Lutheran. 

[00:12:50] Jessica Busch: Really? 

[00:12:50] Steve Howard: We're doing even better. And the opportunities for this have been fantastic.

So we're seeing a lot of benefits. And as Michael said, we do have challenges. Our schematic estimate on this project last year we're $15 million over budget and we had challenges and we set a target that we have to be under budget and over the course of five months, the team, you could see the snowball as we looked for ideas and it started out flat and it started to ramp up as we got successes and we ended up saving $37 million without cutting any scope.

And in delivering the project below the original budget. And so the team really took advantage of the opportunities, and once they found the momentum, they got excited about it, and it worked really well. 

[00:13:34] Jessica Busch: And challenges. What type of obstacles do you face, if you were to go in this direction of using IPD? And how do you overcome these challenges? When does it work? When does it not work? 

[00:13:47] Michael Blasingim: It's a good question as Steve mentioned earlier, there's a tremendous amount of interest right now in the healthcare market about this IPD lite approach and a lot of the principles involved. 

[00:13:57] Jessica Busch: And that's why you guys are here, because we've been hearing it.

[00:13:59] Michael Blasingim: Yeah, and I think one of the things that, that I have to relay to the owners is There is some upfront cost associated with it, but it's really a moving of cost from the construction and the pre construction portion. The owners having that trust in the team to spend some money up front to have a predictable outcome and a predictable budget for the project is not following some of their current, method, delivery methods.

[00:14:24] Jessica Busch: And it can be uncomfortable. 

[00:14:25] Michael Blasingim: Yeah. So it, that's one of the things we see. I think another thing that we have to understand where it can really fail is if if the owner is not a champion of it. So we have to have a lot of owner or owner rep involvement to champion it, to show the importance to everyone on the team, whether it's Leighton, the designers, the trade partners. So there, there is some things that you have to be careful with. 

[00:14:50] Jessica Busch: So this isn't a delivery method that the owner can just pass a project on and walk away. They need to be willing to be involved. 

[00:14:58] Steve Howard: In my experience, I've been involved in projects that had tried IPD light, but they relied on, Hey, we're hiring a contractor.

That's done. And we've hired an architect that's done it. They'll show us what to do. And it hasn't worked out very well. When things get tough. Yeah. The owner wasn't there to really drive a process. Yeah. On the Intermountain side, we've had a very strong owner that believes in this.

And from the beginning they were willing to put forward whatever needed to happen. We invested in lead coaches and IPD coaches to keep continually reinforce the principles within the team. Committed to decision making and quick decision making to keep the team moving and to not cause delays. So the owner was heavily involved and committed to the process. And that's driven a lot of the successes that we've had. Other challenges are, things get tough on every project. And a term I heard was called Project Drift. That When things get tough, teams say, Hey, leave me alone. Let me go back and do my work.

I need some time to get my work done. And that's where things start to fall apart. Collaboration stops, communication stops. And so.

[00:15:58] Jessica Busch: The instinct to go back into the silo. 

[00:15:59] Steve Howard: Yeah. Just go back to my silos. Leave me alone. I need a month to just get this done. And when you do that, bad things happen. So you got to avoid some of those situations.

[00:16:09] Michael Blasingim: And really talking about going back into the silos is the worst thing you can do. We now as a group. We'll present our risk and where we're struggling at, whether it's from the trade partner side, latent side, the designer side, and all of a sudden when a problem comes out, but you have that trust in your group to help solve it.

It's really fun to watch ideas come in and different things happening to help solve those problems. 

[00:16:31] Jessica Busch: So you talked about presenting the risk. Risk sharing, financial transparency, how does that work in this model? Maybe different from a more traditional model people might be a little more comfortable with?

[00:16:47] Michael Blasingim: I keep coming back to that trust, but yes, everyone is totally transparent. So when I say transparent, it's not just me delivering the budget and the details to the owner, it's reviewed by our trade partners and the designers and everyone involved, our budget, detailed budget, and everyone goes through it.

But again it's not to to beat you up over it's to understand the vision and where we're heading. And then with that, transparency it really helps solve problems down the road. We haven't had any issues where we've had to drop back and redesign because there was a budget issue but just having that transparency, but it's new to everyone.

[00:17:24] Jessica Busch: So go line by line through someone's budget. 

[00:17:26] Michael Blasingim: Getting the, your trade partners to open up their books and really understand. But once they do it, it's almost a little freeing because you're not just feeling all the pressure yourself. Now you've got a team to help you solve those issues and understand where you're going.

[00:17:40] Steve Howard: The risk is there, right? We all have the risk and everybody has to take their portion of it. We don't want to go back and redesign that cost everybody money. We want to eliminate waste in the process and by having people involved in, and if one member of our team does not collaborate and does not put their voice forward, and then three months from now, they say, oh, we have a problem, right?

[00:18:00] Jessica Busch: It's always that person. 

[00:18:01] Steve Howard: It's a whole team problem and everybody suffers and everybody has to jump in and solve the problem. And it costs the team money, right? It costs everybody money. And so we looked for what those are, we pull plan, we try to think forward as to what those challenges are going to be and find solutions for them in advance.

[00:18:19] Jessica Busch: So solutions, I would assume technology is one of those possible solutions. What role does technology play in IPD and are there specific tools or platforms, anything that helps facilitate this unique delivery method?

[00:18:35] Michael Blasingim: Yeah over the years doing these projects when you're having 15 cluster groups a week and different meetings and different report outs.

The amount of paperwork and tracking was extremely time consuming and really you wonder what the benefit of it all was. Layton has taken we utilize smart sheets and we've catered that software to what we use. And we now have, a one stop shop for all of our logs, all of our meeting minutes.

It's real time. It's web based where anyone can get on at any point. So that software has helped manage this whole complex process, tremendously. And another thing with tracking these complex projects is the cost. So we've started utilizing join software, and I know our owners like us using it.

It's real time. You can see the trends in cost. You can one of the things I love about it is you can track how each cluster group is doing, in performing and their cost and meeting their targets. Between those two and then our pool planning software, it's really come a long ways in the last decade on how we manage these projects.

And, I know you're watching what we're doing and you're used to using some of the software, but it's come a long ways, huh? 

[00:19:49] Steve Howard: Yeah, there's a lot of software, right? And in every project and try to figure out what's going to work for the team and which software is that one team likes, but the other team and another team uses a different software, aligning the team around the use of software that's very effective.

And technology, we started a Lutheran, we have a system Aerva board TV system, which is about 25 feet long that goes on a wall, but it's very interactive. And we do our poll plan where we have people walk to the board and actually move things around on the board and work together to collaboratively do work.

And it was tremendously effective, right? And it was used in pre construction and then it was used in the field with all of our trade partners. And it was very effective. The owner was even looking at, Hey, how can we use something like this for some of the work that, that they do? And and using that technology along with smart sheets and along with join to give instantaneous feedback, where do we stand?

What are our issues? We track our results. We make commitments to each other. And through the use of the technology, we actually track how are we performing and where, when we look at this every week and we see that, Hey, there was some missed commitments last week. We're starting to tread downwards. We look at how do we fix it and get it back.

[00:20:57] Jessica Busch: Accountability is built in. 

[00:20:59] Steve Howard: Accountability so that there's active accountability on a weekly basis.

For the, both of our projects at Intermountain Health, we have feedback that we're doing IPD light, but we're outperforming full IPD teams, right? We've got very good commitment and the tracking that we're doing is working very well. 

[00:21:14] Jessica Busch: So let's talk about a few lessons learned. How, it's obviously evolved for a reason. How did we get here? What can we learn from these lessons? And how do we improve, for future projects? 

[00:21:29] Steve Howard: Yeah. As I said, the biggest lessons I've learned is owner involvement and engagement. You have to be committed to the process.

If you come into it halfheartedly and hope that things will work out, it doesn't work very well. So you need to be fully committed to this. As Michael said, there's some upfront costs. There's things that come along early. And if you're committed to it, the savings are there. The opportunities are there.

And schedule and quality, but you really had need to have an owner that's committed to to, to this. And the second thing for me is avoiding the project drift, avoiding the silos because they happen and they're here and if you let those sink in, that can really disrupt your project.

[00:22:08] Michael Blasingim: I think it was mentioned earlier, it's not the company, it's the team and having people that you can collaborate with, that you can trust. That you can share things with, share struggles and opportunities I think is huge and just getting those right players involved and the right personalities and the right goals, getting your goals aligned.

[00:22:28] Jessica Busch: So how do you see this evolving? Moving forward. Are there things that you're seeing even now, like little changes you're making to continue to push it forward as the go to delivery method for these complex healthcare projects? 

[00:22:41] Steve Howard: For me, having done, a lot of projects over the years, this is the only way I want to do projects.

I, I've seen how successful it could be. And, even if we had an owner that did not want to fully engage, I'd want to bring a lot of these principles to a team and build that because it is working. I find that, our community, the design community and construction community embrace it.

They want to operate that way and interviews, everybody presents, this is what we want to achieve, right? Why don't we achieve that? And bringing some of these principles forward. I'm seeing more and more projects take this on that I hadn't seen in the past, right? Whether it's at Minnesota or Michigan or South Carolina or Florida, Texas, we're being asked by owners all over, Hey, we want to do this approach.

How do we do this approach? How are you successful at it? So it's gaining ground. And finally, I think as more of this is done, the more people that we have with experience in the trades and the consultants and that have experienced this it'll continue to grow. 

[00:23:38] Michael Blasingim: I think this one's a little different too and then a lot of new things start up with young people and you know We've been in the business a while, and it's usually not the 

[00:23:48] Jessica Busch: We'll call you a vet, we'll call, veterans.

[00:23:50] Michael Blasingim: Veterans. 

[00:23:50] Jessica Busch: Successful veterans. 

[00:23:51] Michael Blasingim: But in this process, the veterans are seeing the benefits that it's providing. It's not the young people coming out of college bringing these principles on board. It's the veterans realizing, hey, this is good. Yeah. This is nice.

And so when you see the veterans driving and talking about how good of a process it is, that, that means something to me. It's not the young folks coming out of school that's driving this. 

[00:24:15] Jessica Busch: Before I let you run back to the meeting you're supposed to be in very soon, I apologize.

What, for our listeners, what initial steps would you recommend for someone that's maybe considering going down this path? And outside of those initial steps, what advice would you give a kind of a first timer? 

[00:24:36] Steve Howard: When we started this, one of the first things we did is go into learning. We looked into the, LCI, the Lean Construction Institute.

And took some of their preliminary classes on what does it mean to go back to school? 

Yeah. Go back. Yeah. Understand what does it mean to set up a big room? What is poll planning and target value design? We think we know, but let's learn what the principles really mean. And so we spent a bunch of time going through that and learning we invested in some, as I said, some lean coaches and team building experts to think about, think through how are we going to build this team and how are we going to collaborate and put some effort into it up front.

Absolutely. Absolutely. Be able to make it successful. 

[00:25:12] Michael Blasingim: I think it's reaching out to folks who have done it and trying to just understand the process and the opportunities that are out there and what you have to do for it to be successful. I think it's just doing your homework, talking to people who've had it, run successfully.

I think that should be the first step for anyone interested in it. Just really getting the understanding of what it means and what it takes and the effort involved. Yeah. 

[00:25:34] Steve Howard: Yeah, you really need to understand how it's different, right? Because it doesn't work every time. It really depends on the players.

And what, as you already asked, what are the things that go wrong? And understanding why they go wrong, and how we plan for that ahead of time. 

[00:25:48] Jessica Busch: All right. I am going to end it there because I know you guys have to go, and this was really interesting. Thank you both. I will probably make you come sit down with me again to dive into some other healthcare trends that are going along.

But for now, thank you so much. This was really educational. So thank you. 

[00:26:07] Michael Blasingim: Thanks for having me. 

[00:26:08] Steve Howard: Thank you.