Delivering Innovation in Hospital Construction: Contracts and Collaboration in the UK’s Private Finance Initiative Hospitals Program

by James Barlow, Martina Köberle-Gaiser



This article discusses the relationship between the system for planning, financing, constructing, and operating new hospitals and the design and construction innovation. It focuses on the UK’s Private Finance Initiative (PFI), where consortia of private companies invest in, build, and operate public sector hospital facilities. The PFI was partly introduced to inject increased innovation into the delivery of healthcare infrastructure. Case studies of eight schemes developed over the last decade demonstrate that the PFI model has not generated the anticipated innovation benefits. This is partly due to the way risk is allocated between the project stakeholders and partly to the lack of integration between the hospital trust and the consortium. These represent structural features of PFI that could be improved upon in order to produce better outcomes.

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