Tighter client budgets, the need for specialized treatment centers and the desire for improved inpatient and outpatient care were the dominant themes for Modern Healthcare's 2001 Construction & Design Survey.
Spending on construction fell 1.5% to $17.6 billion in 2000 from $17.8 billion in 1999. By comparison, construction costs soared 20% in 1999 from the previous year. The number of projects in the latest survey fell 2.7% to 3,854 from 3,959.
This year, 198 firms participated, down from 207 last year. Some 135 architects, 19 construction-management companies, 18 general contractors, 12 developers, 11 design/build firms and three program managers responded.
Many of the firms reported that mergers and consolidations, lack of funding and cost sensitivity are creating a demand for more strategic planning. Many hospitals have been consolidating existing hospital and specialty services into one large building, while ensuring that the facility can be easily expanded and renovated.
According to this year's findings, new and replacement hospital construction costs fell dramatically by 37% to $2.4 billion from $3.8 billion, although the number of projects fell only 10% to 78 from 87.
Nursing homes see markups
Nursing home expansions saw the greatest cost gain, up 124% to $232.2 million from $103.5 million. The number of projects decreased slightly to 45 from 47.
The outpatient renovations category saw the greatest cost decline, tumbling 46% to $631.5 million from nearly $1.2 billion, even though the number of projects rose a mere 4% to 433 from 415.
The completed projects for outpatient services, which took the hardest hit during the past year, were home health/mobile imaging, which fell 32%; physical therapy/sports medicine, which fell 26%; and adult day care, which dipped 18%.
The big gains in completed construction projects for outpatient services were among wellness centers, which grew 41%; parking garages, which increased 38%; and cancer centers, up 33%. Garages showed the best overall gain for hospital construction, with the number of projects going up 71% to 82 from 48 and construction costs rising 44% to $404.3 million from $280.4 million.
This year, 10.6% of responding firms completed foreign construction in 2000. Of those companies, 10.7% of construction revenue came from overseas work, compared with 15.3% in 1999.
Specialty hospitals in demand
A major factor in healthcare construction this year was the need for more specialty hospitals, especially those for women and children. The number of projects in the category increased by more than 11%, and the construction costs rose 27% to $1.07 billion in 2000 from $841.8 million the previous year.
An example of specialty construction was Children's Hospital, by HDR Architecture, Omaha, Neb. The new 275,000-square-foot facility has a 198,000-square-foot, five-level, 500-space underground garage. The Omaha hospital was finished in October 2000.
The $90 million hospital originally shared space with Nebraska Methodist Hospital, Omaha, and had no place to grow. Therefore, HDR decided to put the new facility across the street from its original location and adjacent to the building that houses its outpatient functions.
"The hospital needed to move because the community perceived it as part of Methodist instead of its own independent entity," says Jim Hohenstein, senior vice president of HDR.
The exterior of the 100-bed medical center was designed to be warm, inviting and playful. Patient rooms are located to take advantage of the landscape and create a warm, healing environment.
"The hospital is really about the family, and each private patient room contains a TV/VCR, a refrigerator, a sleeping area and computer outlets for parents," Hohenstein says.
Cancer center expansion and renovations also were up 33% last year from the previous year. The number of projects rose to 146 from 110.