Costs for an expansion project at problem-plagued 510-bed Fletcher Allen Health Care, Burlington, Vt., nearly have doubled since state approval -- to more than $370 million -- because management paid little attention to budget and encouraged "wish list" thinking in project design, according to a report by the healthcare architecture firm NBBJ, Seattle. The firm, hired by the state Department of Banking, Insurance, Securities and Health Care Administration, said there was little hope of reducing the project's cost because construction has been under way for nearly two years and most materials have been purchased. Plans included fancy glasswork, posh interiors and beautiful landscaping that pushed project costs above normal, NBBJ said.
Vermont regulators approved the expansion at $173.4 million in 2000, and the hospital has permits allowing it to spend a total of $228 million; the state must approve an additional $146 million in spending if the project is to meet its projected cost. Late last year, a Fletcher Allen investigative committee concluded that executives had withheld information about the project's costs from regulators and the public in order to avoid certificate-of-need review. As a result, the hospital's COO and vice president in charge of development resigned. Fletcher Allen's former CEO resigned in September after state and federal investigators began examining regulatory compliance issues at the hospital. -- by Tony Fong