Three Northern Light hospital projects will cost 40% more due to rising labor and material costs

By Kathleen O’Brien, Bangor Daily News Team Three major hospital construction projects will cost 40% more than originally thought as Northern Light Health faces steep increases in labor costs labor and building materials. This means replacing hospitals in Greenville and Blue Hill and building a new 50-bed unit at Acadia Hospital in Bangor will cost the hospital system nearly $27 million more than projected when the state first announced. gave the green light to all three projects last year.

By Kathleen O’Brien, Bangor Daily News Staff

Three major hospital construction projects will cost 40% more than originally estimated as Northern Light Health faces steep increases in the cost of labor and construction materials.

This means replacing hospitals in Greenville and Blue Hill and building a new 50-bed unit at Acadia Hospital in Bangor will cost the hospital system nearly $27 million more than projected when the state first announced. gave the green light to all three projects last year. The increase brings the total cost of the three projects to $93.6 million, according to documents from the state Department of Health and Human Services, which approves hospital expansion plans.

Northern Light has sought state approval over the winter to raise the price, citing a tight labor market that has made it difficult for contractors to find enough workers, building materials coming in at cost higher and take longer to get, and a number of other major construction projects in Eastern Maine and nationwide that add to the competition for workers and materials.

The rise in projected costs is part of a national trend of rising prices for construction projects.

“Construction costs are as volatile as they have been at any time in the past half-century,” Northern Light wrote in a letter to state regulators seeking approval to raise the price of projects.

The Maine Department of Health and Human Services has approved all three requests to increase construction costs, according to memos from Commissioner Jeanne Lambew filed March 10. In all three documents, Lambew wrote that the ministry found the projects were still necessary for the communities they serve. and remain economically feasible regardless of increased costs.

Not only is Northern Light experiencing material and labor shortages, but material prices continue to rise so often that suppliers are setting cost estimates that are only valid for one day rather than the industry standard. 30-day industry, according to the documents.

On the labor side, Northern Light pointed to a contractor who normally sent out a team of 40 workers each year until 2020 but only managed to hire around five workers last summer and has since left the company. Additionally, Northern Light said its vaccination mandate for all workers adds to the difficulty of finding enough construction workers.

After a $14 million cost increase, the cost of a new 50-bed unit at Northern Light Acadia Hospital, one of two private psychiatric hospitals in Maine, will now cost more than $49 million.

The hospital received state approval in November 2021 for a new two-story facility on its existing Stillwater Avenue campus to meet a growing need for psychiatric care. The facility will include 50 single occupancy rooms with pediatric beds. The construction work at the hospital will also include the conversion of all double occupancy rooms in the hospital to single occupancy rooms.

Although licensed for 100 beds, Northern Light said it could not use all of its beds because it is not safe to place many patients together in the same room. The expansion will allow the hospital to safely use all 100 beds, according to state documents.

The hospital remains fully operational and able to serve the community during construction.

At Northern Light Health’s Blue Hill Hospital, the cost of replacing the century-old facility at the same site has increased by approximately $5.7 million, a 31% increase that will bring the total cost to $23.9 millions of dollars.

Similarly, replacing CA Dean’s Northern Light Hospital in Greenville will cost approximately $6.8 million, or 50% more than projected, bringing the total cost to $20.5 million.

Both Blue Hill and Greenville hospitals are 25-bed hospitals that the federal government designates as critical access, meaning they serve patients in rural areas and receive greater Medicare reimbursement than more urban hospitals.

Northern Light spokesman Andrew Soucier said construction had already started on Blue Hill Hospital, although a neighbor appealed the city’s approval of the project. Construction will begin in Bangor and Greenville this spring, Soucier said. The change in costs had no impact on project timelines.

“Given the vital role these projects will play in preserving access to rural health care at Blue Hill and CA Dean Hospitals and in meeting the growing statewide demand for behavioral health services provided at Acadia Hospital, Northern Light Health is moving forward without delay,” he said.

Increased fundraising will cover at least some of the additional costs.

“We are inspired by the commitments that generous donors have already made to the projects, and we believe that philanthropy will continue to play a key role in their success,” said Soucier.

About John Tuttle

Check Also

Swelling from health concerns? New EU leaders scrap taxes on junk food amid cost of living crisis

September 28, 2022 — New political leaders in the UK, Italy and …