Pitfalls of Regulatory Review

Posted on July 23, 2012


No one wants his healthcare project delayed by a code official—no hospital administrator, no architect, no contractor—because it benefits no one.

Within the regulatory environment for healthcare projects, many similarities exist between states.  Each state has its hurdles, though they vary by locale. In one town, it may be a local political appointee, the environmental reviewer, a military division administrator, the permitting person, fire / life safety official, or the state’s health review component (in Florida it is called the Agency for Health Care Administration, AHCA). No doubt about it:  a strict AHJ (Authority Having Jurisdiction) can be problematic if not managed correctly.

Successful demonstrated experience working through ‘the system’ is valuable. CEOs want to know the team they select knows how to navigate their state. In fact, having no experience in a particular state is a common reason for not winning a job.  But is this a fair judgment?

The truth is states are not equal; some states are far more onerous to work in than others. Some states are known for being especially thorough; Florida and California (Office of Statewide Health Planning & Development, OSHPD) are recognized as unusually demanding. But the argument ‘we’ve worked in much tougher states’ can be a little demeaning to hear for clients in other states. More often than not, hospital project leaders who have not worked outside their own state feel our regulators are the worst

So what makes a regulatory review potentially difficult for a project?  Reviewers themselves might say something large, complex or with a specialty focus. Or a project with new technology or materials in it. Or simply a clueless architect, engineer or contractor that does not put together good drawings.

All things being equal (a stand-up owner and a respectful and dutiful design-build team wanting to do good work), there are really three things that make a regulatory review, especially a state health agency review, a nightmare, and give a state (or city) a bad reputation for getting a project done:

  1. Random demands.  For the most part, codes are becoming more standardized. It is more common for jurisdictions to adopt international regulations that people know and follow already. There will always be conflicts, and the most stringent always governs. However, places that let their code officials ‘rule’ via anarchy are some of the most difficult. When demands are placed on the design-builder that do not appear in black-and-white, it is difficult to argue, predict, and especially price the fallout. A moving target is no fun, and there is no telling when the game is over.
  2. Slow.  Unresponsive officials are not uncommon, and lethargy in getting a formal reply is frequently a symptom of other issues internal to the reviewing agency.  Lack of motivation, incompetency, overworked and understaffed, bureaucracy, inefficiency, or bloated staffs can all contribute to slow responses. When a team cannot count on an answer by a certain date, everything is affected:  schedules slide, bids grow, morale suffers and costs rise. Teams want to work with officials that respect and value its time.
  3. Unethical.  Unfortunately, not everyone is a straight shooter. In some areas, politics and ‘who you know’ are important, perhaps too important, to receiving what is due or expected. Any official or agency that abuses its power, makes its own rules, or worse, breaks the ones all the others play by, can create real project havoc.  In this case, it is important for the hospital or healthcare system to have a good relationship with the community or agency in question, and to try to cash in some outstanding favors, if possible.

Regulatory review is getting easier:  more is automated or done online, codes are more readily available, and agencies can process more projects with less staff.  It would be ideal to always hire a team with local experience, but other attributes have far more impact on project success. Hospitals may sweat the multi-stage reviews, but unless the municipality suffers from one of the three above concerns, reviews are just part of the project and can most likely be executed with minimal problems.