The State of Healthcare Construction

Jun 08, 2022 at 11:00 am by pj


In Orlando the pandemic set in motion changes in building and renovating hospitals, clinics and medical practices

 

By LYNNE JETER

The 2020 pandemic set off a persistent chain reaction of challenges for the healthcare construction community, significantly altering the way hospitals and medical practices are being built and renovated.

Birmingham-based Robins & Morton, a privately held construction firm, recently unveiled the study, The State of Healthcare Construction, which highlights market trends and shows how building and design team partners have responded to dramatic changes. 

“In many ways, the past year has been even more disruptive than 2020, creating challenges that everyone in every aspect of healthcare construction will continue to face in the year ahead,” said Bill Morton, CEO of Robins & Morton.

The report’s findings underscore the importance of a collaborative and integrated approach in addressing escalating costs, supply chain issues and labor shortages. The report reviews how the pandemic accelerated changes in traditional approaches to healthcare construction, and how those best practice lessons are being applied to these challenges.

 

Managing Volatile Construction Costs & Supply Chain Disruptions

Soaring construction costs, severe labor shortages, chemical plant shutdowns, wildfires in timber forests and a record-setting residential boom have greatly hindered healthcare construction projects.

Logistical and supply chain bottlenecks are coupled with the doubling in demand of materials and labor. For example, the report points out that more than 1 million construction jobs remain unfilled across the nation. These challenges, combined with a record-breaking surge of creating alternate care facilities to treat COVID patients in 2020, have put the industry in the lurch.

 

See sidebar below for a Look at Healthcare Construction in Orlando

 

“Building these facilities so quickly showed everyone the benefits of a committed partnership and opened our eyes to questioning the status quo,” said Patrick Duke, managing director of Dallas, Texas-based CBRE Healthcare. “That experience changed the notion of what was possible when everyone came to the table together to solve a daunting problem.”

The report points out three practical, time-sensitive changes that have occurred to accommodate market fluctuations:

  1. The siloed approach in healthcare construction has diminished. Instead, scenario planning across disciplines during preconstruction is essential.
  2. The ongoing level of material shortage and resulting cost escalation requires changes in procurement strategy, including the strong consideration of early purchasing advantages.
  3. Because disruption and redirection caused by spiking material pricing caught industry workers off-guard, it’s become more important than ever to communicate with transparency.

“This recent shift requires a new mindset and includes the need to reset past practices,” said Kevin Harney, AIA, vice president of New Jersey-based ESa Architects.

 

Moving Beyond Code with Resilient Building Envelopes

More than a decade ago, a massive EF5 tornado destroyed St. John’s Regional Medical Center in Joplin, Mo., ripping off most of the building’s walls, windows, and roof system. Five patients died when ventilators lost electrical power.

The consequences of this tragedy and related natural disaster losses led to recently adopted wind-load standards. This year, a new and emerging edition of the energy codes and standards require a higher level of thermal performance from the exterior envelope, including roofs, windows, and walls.

“Hospital owners realize the cost and risk attached to doing long-term constant maintenance,” said Sam Burnette, AIA, principal at ESa’s Nashville, Tenn.-based design firm. “The lesson learned is that you can achieve a tremendous return on investment and a lower life cycle cost when you build with better quality exterior building envelopes.”

Burnette has noticed a dramatic reduction in expense and patient disruption from repairing leaky glass to upgrading building exteriors to correct poor energy performance.

Parenthetically, noise mitigation is often an overlooked factor in building envelope decisions.

 

See sidebar below for a Look at Healthcare Construction in Orlando

 

“If the patient isn’t getting a restful night’s sleep or can’t nap following medical procedures or imaging visits during the day, they’re not likely to give the hospital a positive score on noise management,” Burnette noted.

Key takeaways:

  • Building envelope decisions extend far beyond today’s code requirements to include long-term opportunities for futureproofing hospitals.
  • Early in the process, the options for building envelope components should be considered by an integrated team of designers, consultants, builders, and hospital facilities staff.
  • A set of decisions with lasting impact on building resilience, patient and staff safety and service continuity for the hospital should be considered by the frequency and extent of natural disasters.
  • The strategic choice to avoid the need for costly revision and rework years later should be supported by research, testing, and envelope mockups.

 

Increasing Trust-based Collaboration

When BayCare Health Systems expedited the opening of multiple patient floors on a new, six-story tower at St. Joseph’s Hospital in Tampa, a host of players – the client, contractor, architect, engineer, trade contractors, vendors, city and state inspectors and city officials – forged new ways of collaboration.  

“The important thing is to have people who understand the why behind the project, those who know what we’re trying to accomplish,” said Larry Bagby, assistant vice president at AdventHealth Tampa. “It may be a little uncomfortable, but it’s so important to go outside your comfort zone and seek out learning that’s beyond your own day-to-day environment. People who do this on our projects develop a much better view of their client’s world.”

For example, when the Carilion Roanoke Memorial Hospital’s 400,000-square-foot expansion was underway for The Crystal Spring Tower in Roanoke, Va., the vast team of players was extended to another level: including conversations with community residents.

“These conversations revealed the real importance of the hospital expansion, and the opportunity to improve access to care for the entire Roanoke Valley community,” said Josh Farr, a superintendent at Robins & Morton, who implemented routine pre-business Tuesday morning team rallies that eventually included 600 people. “Those kinds of personal experiences open everybody’s eye and demonstrate the purpose of what we’re really here to do – not just build a hospital but help to take care of people for generations.”

Duke said the pandemic experience of the past two years “makes the human side of the business more visible and important. Company leaders and our clients are more willing to question past methods and ask, ‘How do we do this better?’”

Bagby suggests team members observe the function part of the project. “Talk to the forward-thinking nurse manager or the maintenance workers and ask them what they dream about to make their work easier,” he said. “When we find individuals who behave that way, everything else becomes easier to accomplish.”

 

What Does Healthcare Construction Look Like in Orlando?


 

Even with the arrival of the COVID pandemic in the U.S. in 2020, population growth in and around Orlando continued but healthcare construction took a hit.

To find out what’s going on in the area, Orlando Medical News talked with Jeff Butler, senior pre-construction manager with Robins & Morton, contractors who have $40 million of projects currently in construction to add to their total of $2.7 billion in the Central Florida healthcare market alone.    

 

OMN: Overall what’s the general view of healthcare construction around Orlando now?

Jeff Butler: I handle a lot of the projects in the state, so Orlando's very similar to a lot of the other cities like Tampa, Miami and Jacksonville and healthcare construction seems to be booming. I would say over the last year the influx of projects are not small renovations, but a lot of large renovation projects all throughout the city. From a healthcare perspective, this has been a big boom over the last six months to a year.

 

OMN: When the pandemic hit, did you get a lot of cancellations on projects that had not yet begun?

JB: We did.  I don't know if we had any major pauses. Some of our projects were doing renovations and had to pause for a week or so to make sure they were following or have in place the correct protocols. A lot of projects that were in the planning process had paused, and I think that's what we've seen in late 2020, 2021 and 2022, those projects that were on pause are now starting up and actually under construction on top of the ones that were planned to be built in this timeframe. It's almost like two year’s-worth of projects that were on the planning phase being done in a year's timeframe.

 

OMN: Now that projects are in construction again, can you share what challenges you're facing with projects in Orlando? 

JB: It's supplies and material, it's the cost. Vendors and material suppliers are dealing with issues such as escalation of gas prices and availability, and now we're seeing things that we've never seen before. For example, I was talking to a contractor who said that they were waiting on an air handler that was shipped out for a project, and the manufacturer is wanting an increase in cost. That's never happened. Usually once you do a PO and you go under contract that (price) is locked in, and it's just down the line as far as, shipping costs, material costs and material availability. We really struggle, especially on the construction side...one is maintaining the budget, and the other is trying to get material on time. Things that were taking X number of weeks, now, it's almost times two. We've had to shift our focus to plan early, and then to educate our owners on projects that might be six months. But they might have, let's say, a generator as part of that six months project but it might take a year to get certain electrical gear for that generator. So, now you're planning something for only a six-month project a year in advance. It's items like that, that we're finding new ways to help owners. I don't think owners hire us just to tell them that things are hard to find, and they're more expensive. They're looking for us to find how we can help as a partner to drive the project to completion.  

 

OMN: Can you tell me the approximate value of healthcare construction projects around Orlando now?

JB: On a Greenfield new hospital, it ranges from $600 to $700 a square foot. Not every project is the same. Sometimes the health systems might build say a five-story building, but they are only going to build out four of the floors to have infrastructure ready for future growth. On the renovation side, it all depends on the type program that we renovate - an OR might be as much as $800 to $900 a square foot or an admin suite might be $200 a square foot. It all depends on the program; is it a complete gut and redo with multiple phases, or is it just a light refresh?

 

OMN: Are there any specialty elements to projects? 

JB: I think one of the trends that seems to be talked about in new facilities, is in the event of something like COVID occurring. We might have a whole floor as a pandemic unit that has the mechanical system to be able to handle something like that again. 

 

OMN: What short-term trends do you see, large hospital projects or urgent care and specialty clinics? 

JB: I would say three years ago we saw a big influx of freestanding EDs. Both of the major health systems, Orlando Health and AdventHealth were doing a lot of them in and around the Central Florida area. We haven't seen those as much. We have slowly started to see new smaller hospitals down in South Florida and the trend is usually for new types of projects to go up the Turnpike. These are developer-driven hospitals that might not have an emergency department but are more like ambulatory surgery centers. Some of the health systems are doing larger hospitals with the certificate of need going away. That's where we are seeing the biggest reason for this boom. Once that CON started to go away, and it was a tiered approach, that's where we've seen the different health systems around Central Florida start major growth with larger projects. We have seen medical office buildings increase but they ebb and flow. One year we might see one or two, the next year we might see a lot more of them. 

 

OMN: In the next 10 years what outlook do you have for the market? 

JB: I would love to say it's going to keep on this trajectory, but I think, at some point it will level off. There are still people moving to Central Florida and expanding what is Central Florida. Out in the Clermont area, and I grew up here, we didn’t see that as part of Orlando, but now it is. I do think construction is going to continue to grow, just because of the amount of people that are moving here, whether it's people retiring here or moving here from other parts of country. I think there was such a lack of construction in 2020 that we're still trying to make up for.