A stochastic whole life cycle cost model for a national health service acute care hospital building

The United Kingdom National Health Service (NHS) provides a wide range of healthcare services, ranging from basic primary care to the highly specialised services provided in Acute Care N}]IS trusts. To facilitate the provision of these services, it is responsible for operating and maintaining a complex estate, ranging from Victorian era cottage hospitals to state-of-the-art acute care teaching hospital buildings. Acute care hospital buildings in particular represent a significant proportion of the overall estate stock in terms of running costs, these are generally large, high occupancy buildings, which make substantial demands on maintenance, energy and facilities management budgets. To enable stakeholders to monitor the cost effectiveness of the acute care estate, the UK Government collects data from all NHS trusts and publishes cost benchmarks with which these trusts use to measure performance. For high level strategic planning, these benchmarks are useful, but for the cost analysis of individual buildings, an alternative method is required. The information elicited from this could be vital for not only future internal capital project planning, but also for Trust level estate management. Existing practices do not facilitate a holistic assessment of the total cost ownership of individual hospital buildings, nor do they take into account the physical condition of the estate stock in the assessment of operational costs. Therefore, what is required is a framework within which these concepts can be interfaced, enabling the analyst to forecast future operational and maintenance costs mutually. Whole life cycle costing (WLCC) is widely recognised as a method by which, a holistic view of long-term costs can be taken into account. It has been used widely in the decision-making process when, for example, comparing several alternative project designs at the pre-construction phase. However, the application of WLCC techniques to existing buildings has not been attempted. The reasons for this are principally the lack of high-quality data. Notwithstanding, it is clear that WLCC techniques can inform the analyst with the detailed knowledge required to make effective future investment and budgetary decisions. Within the existing data collection framework, developing and utilising a WLCC model for an acute care hospital building is not possible. Whilst data can be obtained on costs of, for example, electricity consumption of individual buildings, other costs such as facilities management provision are collated on a trust-wide basis (costs for all buildings within the NHS Trust's estate), therefore, the data cannot be used in the WLCC analysis of individual buildings. This thesis presents a novel approach to modelling the WLCC of running and maintaining an NHS acute care hospital building by integrating these costs with the physical condition of the building. A Markov process is developed to forecast the remaining service life of the hospital building, based upon a condition survey. This is then used to determine the WLCC assessment period. For each of the WLCC centres identified, a variety of mathematical techniques are used to model the overall WLCC. A risk integrated Holt-Winters time series forecasting model is developed to predict the energy costs, and stochastic modelling techniques are used to forecast the facilities management, maintenance, financial and residual cost centres. Monte Carlo simulation techniques are then used to generate the overall WLCC. Finally, a set of performance measurement indicators are utilised to draw inference from these results. The proposed WLCC model allows the analyst to conceptualise the true overall running cost of an acute care hospital building and furthermore, the information inferred from it can help formulate future investment policy. It also allows the analyst to quantify the risk associated with the forecasts, providing distributions of costs with an associated level of certainty, as opposed to deterministic point forecasts. WLCC of various other acute care buildings can then be compared throughout the acute care estate to assess whether trusts are efficiently utilising their budgets, whilst enabling the analyst to consider the physical condition of the building within these calculations.