Construction & Design Survey shows new signs of life for health projects
After a brutal year that saw numerous projects put on the shelf, experts believe the healthcare construction industry is now on something of a rebound, but add that it probably won’t be back in full swing until late this year at the very earliest.
They report that a lot of planning is taking place that won’t result in actual construction for several months—if not until next year. When work starts up again, the new facilities being built will have a focus on flexibility, smooth workflow, “green” construction and “evidenced-based design”—which aims to create a healing environment while promoting patient and staff safety.
Among the top 10 construction management companies in Modern Healthcare’s 31st annual Construction & Design Survey, four companies reported reduced project dollar volume in 2009 compared with the previous year, and six of them reported a reduction in the square footage of their projects.
Another trend that experts saw last year was how healthcare helped prop up the ailing construction industry as a whole, and they say this should continue in 2010, but much of that aid is coming from the federal government building new Veterans Affairs and Defense Department hospitals.
The VA’s fiscal 2011 budget request seeks more than $1.4 billion for healthcare construction and adds to the almost $1.1 billion previously funded through 2010 for major projects in Aurora, Colo.; Palo Alto, Calif.; and New Orleans. Partial funding is also requested for future projects in Omaha, Neb., and Alameda, Calif.
Construction on one of the more significant federal projects, the $995 million Southeast Louisiana Veterans Health Care System medical center replacement in New Orleans, is expected to get started in August. According to Columbus, Ohio-based NBBJ architects, the new facility will have 200 beds and 300 outpatient exam rooms, plus rehabilitation and mental health services. It will provide care for more than 2,000 veterans a day.
According to the 2011 VA budget request, a construction contract is scheduled to be awarded this June for a $800 million tertiarycare facility with 107 hospital beds and a 60bed “community living center” outside of Denver. The project is scheduled to be completed in September 2013.
The active military healthcare construction plan for fiscal 2011 includes funding that totals $794.7 million for projects throughout the country plus clinics and hospitals in Germany, Guam and South Korea. (The 2010 plan had $964.7 million worth of projects.) The largest project on the list is $162.5 million worth of funding for a $608 million ambulatory-care center to support the new San Antonio Military Medical Center, South Campus, at Lackland Air Force Base. The ambulatory-care center will eventually replace the 1957-vintage Wilford Hall Medical Center, whose deficiencies, documents say, would cost more than $570 million to fix. Construction is expected to begin in March 2011 and be completed in April 2013.
“Those two agencies are investing billions of dollars,” says James Brownrigg, Turner Construction Co. vice president and healthcare director. “The number of projects in the public sector is buoying the private sector.”
That’s one reason why building and design companies that hadn’t been previously involved in healthcare construction are looking to get into it. Of the 186 companies participating in this year’s Construction & Design Survey, 140 say they saw increased competition from companies not traditionally involved in healthcare.
Doug Wignall, national healthcare director for Omaha-based HDR Architecture, the highest-ranking architectural firm in the survey, reports that his company had its secondstraight record-breaking year. The company finished with nearly $6.33 billion in work last year, which was up 7.1% from the almost $5.91 billion it performed in 2008.
Wignall credits the company’s decision to diversify “at the right time in the right places” and winning the “largest commission in the country” last year for its success. The big domestic contract that HDR landed was for the new $1.27 billion, 862-bed Parkland Hospital in Dallas. Groundbreaking is expected to
Waste reduction and recycling efforts during construction of Aurora Medical Center in Summit (Wis.) earned the facility the Big Diverter Award.