With the Affordable Care Act still in its infancy, Building Teams are seeing reverberations in the investment decisions of healthcare providers, including new ideas about the types of buildings they are asked to create.
âTo reduce costs, many hospitals, physiciansâ groups, and healthcare systems are merging to eliminate duplication of operations,â says Kelly Altes, P.E., Project Executive for KJWW Engineering Consultants and a member of BD+Câs â40 Under 40â Class of 2014. âThese and other trends are in many cases the result of the Affordable Care Act, which has providers focusing more than ever on patient experiences and outcomes, as well as outpatient services. This shift is resulting in a significant increase in medical office building and clinic construction and renovation projects.â
The latest version of the annual Hospital Construction Survey conducted by the American Society for Healthcare Engineering with Health Facilities Management magazine confirms this trend. The percentage of respondents planning medical office building expansions, completely new MOBs, neighborhood outpatient facilities and primary-care clinics, and ambulatory surgery centers were all up significantly. Meanwhile, 41% said the new regulatory environment makes it less likely that theyâll proceed with large new hospital construction projects.
TOP HEALTHCARE SECTOR ARCHITECTURE FIRMS
2013 Healthcare Revenue ($)
1 HDR $191,150,000
2 Stantec 126,523,841
3 HKS 113,904,765
4 CannonDesign 108,000,000
5 Perkins+will 96,663,046
6 HOK 92,185,580
7 NBBJ 85,544,000
8 Perkins Eastman 69,750,000
9 Hammel, Green and Abrahamson 66,036,440
10 SmithGroupJJR 58,159,528
SEE FULL LISTÂ
TOPÂ HEALTHCARE SECTOR ENGINEERING FIRMS
2013 Healthcare Revenue ($)
1 AECOM Technology Corp. $180,760,000
2 Jacobs 87,770,000
3 URS Corp. 45,036,525
4 Smith Seckman Reid 40,105,600
5 KPFF Consulting Engineers 38,000,000
6 Allen & Shariff 36,000,000
7 BR+A Consulting Engineers 29,900,000
8 Affiliated Engineers 27,947,000
9 CCRD Partners 23,760,000
10 Burns & McDonnell 19,810,000
SEE FULL LISTÂ
TOPÂ HEALTHCARE SECTOR CONSTRUCTION FIRMS
2013 Healthcare Revenue ($)
1 Turner Construction $2,001,060,000
2 McCarthy Holdings 1,738,000,000
3 Skanska USA 1,207,794,377
4 Brasfield & Gorrie 974,254,444
5 Clark Group 867,497,494
6 DPR Construction 806,488,333
7 PCL Construction 721,107,363
8 Whiting-Turner Contracting Co., The 720,455,505
9 JE Dunn Construction 700,315,855
10 Balfour Beatty US 469,422,190
SEE FULL LIST
With care models changing, medical office buildings increasingly provide services that were once the exclusive province of hospitals, from cancer care to emergency treatment to operations. According to Cushman & Wakefield, 80% of surgeries can successfully be completed in an ambulatory setting.
Giants 300 coverage of Healthcare brought to you by DuPont www.fluidapplied.tyvek.com
By moving these procedures away from large hospital campusesâwhich are often landlocked with little room for expansionâthe volume of patients requiring the hospital is reduced, making way for patients with more complex needs. Since many off-campus MOBs are part of a network associated with a larger hospital, patients who end up needing more advanced care can simply transition to the main campus.
Locations of new MOBs are carefully considered, with developers opting to place them near shopping, restaurants, major roads, and public transit. In the past, many retail centers were wary of making deals with medical tenants because of the overall stigma of having a healthcare provider near retail and dining. Retail developers also believed medical tenants wouldnât produce attractive levels of revenue. However, some developers have decided that having healthcare tenants is better than no tenants at all.Â
In particular, medical groups have made good use of large spaces vacated by defunct retail franchises, both stand-alone and within malls. Kaiser Permanente recently opened a 32,000-sf MOB in Portland, Ore., via adaptive reuse of a Circuit City location the healthcare organization bought out of receivership in 2010. Minnesotaâs HealthEast Care System has created clinics in St. Paul-area spaces once occupied by Borders, Gander Mountain, and eq-life retail stores.
Â
New partnerships and development models
A Cushman & Wakefield investor survey on medical office buildings reports that many healthcare providers are now seeking to form joint ventures, often between for-profit and not-for-profit health systems. These partnerships may offer the for-profit business the name recognition of the nonprofit, and give the nonprofit access to the financial and physician resources of the for-profit. When smaller clinics partner with larger, better-funded hospitals, they can pool their resources to care for more patients.
A Jones Lang LaSalle report indicates that real estate investors are increasingly enthusiastic about the profit potential of MOBs. In 2013, 78% of MOB buyers and sellers were investors rather than developers or hospitalsâa dramatic shift from 36% in 2012. Hospitals and healthcare providers still control 85% of healthcare real estate and are generally not interested in selling, leading to a tight property market, JLL says. The firm predicts that hospitals may be increasingly willing to reconsider leveraging under-used property assets, in light of strong investor interest in the sector.Â
Â
Regulations transform hospital design
Though construction of big new hospitals has slowed, healthcare groups are still investing in updates to keep properties functional, safe, and competitive. A twist pointed out by the HFM/ASHE report: Obamacareâs âtwo-midnight rule,â whereby hospital stays lasting less than two midnights must be billed as outpatient services. Some hospitals are creating dedicated units for observation-status patients, a tactic that may reduce overall length of stay.
 Private patient rooms are the new normal, typically flooded with natural light and richly equipped with accessibility features. New Facility Guidelines Institute recommendations for 2014 emphasize sterilization and infection control in both hospitals and outpatient facilities. Some clients are also debating pros and cons of âsame-handedâ layouts, wherein all patient rooms are similarly oriented, versus traditional âmirrorâ floorplans with back-to-back headwalls.Â
âTo achieve desired healthcare outcomes, evidence-based design and Lean design are becoming increasingly critical tools to design facilities in ways that minimize patient stress, increase patient and staff safety, and improve staff effectiveness and quality of care,â Altes says. âAs a result, weâre seeing increased attention on such things as the incorporation of natural elements; âfamily-centeredâ spaces; single-bed, same-handed patient rooms; and decentralized materials management.â
Â
Read BD+C's full 2014 Giants 300 Report
Related Stories
| Feb 28, 2013
Greeening Silicon Valley: Samsung's new 1.1 million-sf HQ
Samsung Electronics' new 1.1 million sf San Jose campus will support at least 2,500 sales and R&D staff in the company's semiconductor and display businesses.
| Feb 28, 2013
BIA opens entries for 2013 Brick in Architecture Awards
The Brick Industry Association (BIA) has opened entry submissions for its 2013 Brick In Architecture Awardsâwith a new Renovation/Restoration category and new category divisions this year. BIAâs annual awards honor architectural excellence and sustainable design nationwide that incorporates clay brick products as the predominant exterior building or paving material.
| Feb 27, 2013
Marvin Windows and Doors now accepting entries for fifth annual Marvin Architectâs Challenge
Architects have an opportunity for their best work to compete on a global stage in the fifth annual Marvin Architectâs Challenge. Previous winners of Marvin Windows and Doorsâ prestigious award program have come from Spain, Ireland and across the United States â with their work among the worldâs finest.
| Feb 27, 2013
Bronx residents get LEED Platinum public housing complex, rooftop farm
The New York City Housing Authority has opened Arbor House, a 124-unit LEED Platinum complex in the Morrisania neighborhood of the Bronx.
| Feb 25, 2013
HOK sustainability expert Mary Ann Lazarus tapped by AIA for strategy consulting position
Mary Ann Lazarus, FAIA, LEEDÂź AP BD+C, has accepted a two-year consulting position with the American Institute of Architects in Washington, DC. Her new position, which begins March 1, will focus on increasing the AIA's impact on sustainability across the profession. The St. Louis-based architect will continue consulting at HOK.
| Feb 25, 2013
First look: Google's new HQ is engineered for creative collisions
The new California "Googleplex" will be engineered to make sure no Google employee will be more than a 2.5 minute walk away from any other.
| Feb 25, 2013
AISC seeks proposals for development of BIM best practices guide
The American Institute of Steel Construction seeks assistance from BIM users in identifying and documenting best practices to facilitate the long-term standardization of BIM in structural steel construction.
| Feb 22, 2013
Westlake Reed Leskosky will renovate training center for Cleveland Browns
Local firm Westlake Reed Leskosky has been chosen to design renovations to the Cleveland Browns' Training and Administrative Complex in Berea, Ohio.
| Feb 22, 2013
Starbucks pilot program rolls out small, modular stores
Coffee giant Starbucks is rolling out mini-stores with maximum local flavor, as part of an international pilot program.
| Feb 22, 2013
Defense department report: Green design saves taxpayers money
An independent report on energy efficiency and sustainability standards used by the Pentagon for military construction affirms the value of LEED-certified high performing buildings to Americaâs military and U.S. taxpayers.