Hospital Costs: Why French Hospitals are Cheaper

I’ve been looking at an interesting report, “Learning from French Hospital Design” by  Richard G Saxon CBE of Building Design Partnership” which came to light in a recent FOI request.

Although it is dated from May 2004, the basic elements of how French hospitals cost less than UK ones is certainly worth considering. One of the major arguments from Scrutiny was that the price differential was unbelievable, but this document demonstrates that is false – it is all to do with different methodology in hospital design and built.

By turning our attention only to UK design and UK consultants supplying costs, the whole investigation of French hospitals has rather fallen under the radar.

In this respect, there seems to have been a certain degree of non-factual comments made in the media, in particular by at least one columnist in the JEP, who has argued that the “Centre hospitalier (Carcassonne)” came in at a much greater cost. I wondered where there was evidence for that, and it look a long time before I uncovered costings which showed it was expensive, but not nearly as much as £480 million.

Here’s a translation of part of that document.

"The New Hospital opened in May 2014. As a result of the 2012 hospital plan, the new hospital was financed by borrowing (140,000,000 Euros) And self-financing (19,500,000 Euros). With a surface area of 53,757 square meters, the Nouvel Hospital welcomes the activities of Medicine, Surgery, Obstetrics with 496 beds, places and positions including...:."

(https://www.hopital.fr/annuaire-etablissement/centre-hospitalier-carcassonne,4090?fbclid=IwAR2AJX7UtrMjOujTgFan2xRstjZfcl2xt5n42e28pEueDY-qh3k8nYLJ5WI)

I do wish people would cite sources when making statements, Wikipedia demands it, and our standards should be as rigorous. It looks as if it was a lot less (even with exchange rates) than £480,000,000.

And here’s some snippets on hospital design from the Saxon report:

Extracts from “Learning from French Hospital Design”

At 2002 rates, French hospitals cost between half and two thirds of the cost of UK hospitals per m1, but per bed they are more similar. Area per bed is much higher in France, with single bed wards used universally. Arguably, each French bed space outperforms its UK counterpart. Building Servicing costs in France are less than half those of the UK, with French comments that the UK over-specifies. More ambitious automation and ICT are used in France. Fabric costs dominate French examples as they plan for natural daylighting and ventilation and thus generate more gross plan area than UK and US examples.

Contractor-led detail design seems to lie behind much of the economy of means; many Egan—advocated processes are used. Consultants' fees are however comparatively high as a percentage.

The benefits of this approach contribute to the better health outcomes of the French system. Single bed wards assist faster recovery. Daylit plans and good amenities aid staff wellbeing. Better architecture fosters community pride and user morale.

 UK construction produces high output costs to customers from low input costs in professional and trade labour and materials, compared to most EC countries. This fact is at the root of the Egan critique, pointing out that we have a wasteful system which would cost even more if we paid our professionals and tradesmen better. The waste in the system is variously estimated at around 30%, the amount which might be saved if better practices were used. Egan specifically highlights design and construction process integration, standardisation and prefabrication, and the replacement of tendering to assemble teams with established supply relationships.

Looking at French design and construction it is possible to see several of the Egan goals in place, but in ways specific to France. Whilst the design process begins with no contractor involvement, they become involved sooner than in the UK and take responsibility for much of the detailed design and specification. They are more likely to buy standard components and systems from regular suppliers in bulk and to predicted flows, not on a project by project basis. These supply relationships enable manufacturers to be profitable whilst charging less per item. In practice, the small and sporadic UK orders are probably not even for the standard product as we are notorious for customising everything. As an example, similar hospital bed lifts can cost half as much in France as they do in UK.