Hos­pi­tals re­turn to build­ing mode as econ­omy picks up steam

Modern Healthcare - - NEWS - By Beth Kutscher

In 2009, OhioHealth de­cided to take a hard look at its neu­ro­science ca­pa­bil­i­ties. At the time, its pro­gram was the fifth-busiest in the state, and de­mo­graphic changes, such as ag­ing baby boomers, sug­gested that vol­umes could con­tinue to in­crease. “All of that said this is a re­ally ro­bust area for fu­ture growth,” said Con­nie Gal­la­her, OhioHealth vice pres­i­dent.

The Colum­bus-based sys­tem this month opened a $300 mil­lion neu­ro­science cen­ter at River­side Methodist Hos­pi­tal, its largest fa­cil­ity. The pro­ject, which was funded with cash re­serves, will al­low the hos­pi­tal to at­tract not only pa­tients, but also neu­rol­o­gists. In ad­di­tion, it will en­able OhioHealth to of­fer pri­vate hos­pi­tal rooms, a trend that has taken over the Colum­bus-area mar­ket, said Dave Blom, the sys­tem’s CEO.

OhioHealth joins the ranks of a num­ber of sys­tems that are once again in build­ing mode. Af­ter a pe­riod in which health sys­tems largely turned their at­ten­tion and cap­i­tal spend­ing to health in­for­ma­tion-tech­nol­ogy needs, there are signs that the con­struc­tion in­dus­try is get­ting a sec­ond wind—although OhioHealth is also in the mid­dle of a ma­jor elec­tronic health-records sys­tem con­ver­sion.

Most of the fo­cus has been on out­pa­tient ser­vices as healthcare in­creas­ingly shifts to lower-cost care set­tings. Health sys­tems and hos­pi­tal chains also are open­ing free-stand­ing emer­gency de­part­ments to bring in ad­di­tional vol­ume. But even on the in­pa­tient side, there’s a greater em­pha­sis on ser­vice line plan­ning as hos­pi­tals seek to be­come more com­pet­i­tive in high-mar­gin spe­cial­ties. In ad­di­tion to the im­prov­ing econ­omy, health sys­tems feel more cer­tainty around the fu­ture of the Af­ford­able Care Act.

“The whole econ­omy is on a slow but steady rise,” said Thomas Gormley, a Nashville-based pro­ject ex­ec­u­tive at AECOM, a global de­sign and con­struc­tion firm. “There seems to be a lot more money flow­ing into healthcare con­struc­tion these days.”

In Dal­las, the Univer­sity of Texas South­west­ern Med­i­cal Cen­ter in De­cem­ber opened the Wil­liam P. Cle­ments Jr. Univer­sity Hos­pi­tal, a move made pos­si­ble by a $100 mil­lion do­na­tion from the late Texas gover­nor for whom it was named. The new cam­pus pro­vides more space for re­search, of­fers pa­tient rooms re­designed to cre­ate a more peace­ful en­vi­ron­ment, and em­beds a num­ber of tech­nolo­gies such as video­con­fer­enc­ing at ev­ery bed­side.

The bond mar­ket also sug­gests that hos­pi­tals are fi­nanc­ing new projects. In Hous­ton, Texas Chil­dren’s Hos­pi­tal is rais­ing $195.7 mil­lion through the mu­nic­i­pal bond mar­ket to fund a new 548,000 square-foot nearby fa­cil­ity at the Woodlands, due to open in 2017. An out­pa­tient fa­cil­ity is ex­pected to be op­er­a­tional as soon as next year. Texas Chil­dren’s is also build­ing a 640,000 square-foot tower on its main cam­pus that will al­low it to ex­pand its crit­i­cal-care and sur­gi­cal of­fer­ings and will in­clude a he­li­pad. That pro­ject, sched­uled for com­ple­tion in 2018, will free up space in its west tower, and al­low it to in­vest ad­di­tional cap­i­tal in an emer­gency depart­ment re­design there.

Pres­by­te­rian Healthcare Ser­vices in Al­bu­querque is rais­ing $237.2 mil­lion through the bond mar­ket, and will di­rect $100 mil­lion of those funds to­ward cap­i­tal projects. The sys­tem is plan­ning to spend $450 mil­lion over the next two years on cap­i­tal ex­pen­di­tures.

Those projects in­clude the six-story Rust Med­i­cal Cen­ter Pa­tient Tower and Can­cer Cen­ter, sched­uled to open at the end of this year. The sys­tem also re­cently opened two med­i­cal clin­ics in nearby com­mu­ni­ties and has plans for two more.

“I’m not aware of any mar­ket where there’s not ac­tiv­ity,” said Dick Miller, pres­i­dent of Earl Swens­son As­so­ci­ates, a Nashville-based ar­chi­tec­ture firm. “It’s def­i­nitely pick­ing up. There’s a lot of ac­tiv­ity and a lot of it’s fo­cused on out­pa­tient.”

Projects that were on hold are be­ing restarted and healthcare providers are hir­ing new pro­ject man­age­ment staff, said Gormley, who ex­pects de­mand to re­main high. “There’s still this jock­ey­ing to get into spe­cialty ser­vices,” he said.

Cer­tain states, such as Texas, have re­cov­ered faster than oth­ers, said Coker Bar­ton, se­nior vice pres­i­dent and na­tional healthcare di­rec­tor at Birm­ing­ham, Ala.-based Hoar Con­struc­tion.

Con­struc­tion projects de­pend on lo­cal needs. Ru­ral hos­pi­tals, which serve a pre­dom­i­nantly ag­ing pop­u­la­tion, are adding skilled nurs­ing and geri­atric-psy­chi­atric fa­cil­i­ties, Bar­ton said. In the sub­urbs, there’s de­mand for free-stand­ing EDs to serve pa­tients who don’t want to make the trek into the city for ur­gent care.

At OhioHealth’s neu­ro­science cen­ter, the new space will pro­vide more op­por­tu­ni­ties for clin­i­cal re­search. Pa­tients also will be able to sched­ule of­fice vis­its and di­ag­nos­tic pro­ce­dures at a sin­gle lo­ca­tion. And de­sign de­tails, from soft color pal­ettes to sub­tle light­ing of­fer a more sooth­ing treat­ment space.

“We did a lot of things to con­trol the en­vi­ron­ment,” Gal­la­her said. “This was very much de­signed with the neu­ro­science pa­tient in mind.”

All the pa­tient rooms at OhioHealth’s new neu­ro­science

cen­ter at River­side Methodist Hos­pi­tal are pri­vate.

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