The pressure builds

While the effects of the recession are certainly being felt in the healthcare construction industry, architects, builders and engineers still had plenty on their plates in 2008 and will probably keep busy this year as well.

Although there were slightly more companies participating in this year’s Construction & Design Survey—189 vs. 185 in the year-ago survey—the figures reported by participants were up significantly in six of nine categories for project totals, bed count and construction costs for projects completed, started and being designed in 2008. One figure that was lower than last year’s survey and may portend more bad news for the future was the number of projects designed, which decreased nearly 7% to 3,651 from 3,920 in 2007.

Despite the lower number of projects being designed, there were a higher number of beds related to those projects, some 83,400 compared with just over 79,000; and a significantly higher price tag: $88.8 billion compared with $72.2 billion. The fact that survey respondents designed 16 more acute-care hospitals, 274 vs. 258, could explain some of those numbers.

Another figure that was down involved the number of beds in the “projects completed” category. Respondents reported 3,728 projects that involved nearly 39,000 beds and cost $36.3 billion in 2008 compared with 3,552 projects with almost 42,000 beds and a total price of just under $35.4 billion in 2007.

While canceled healthcare projects are still somewhat rare, Dick Miller, president of Nashville-based Earl Swensson Associates, which ranks 11th on the survey’s list of architectural firms, says he sees more projects being delayed or reduced in scope. His firm reported $930 million in business in 2008, compared with $710 million in 2007.

View the complete 2009 Construction & Design Survey charts

“About 85% of our business is healthcare-related in one fashion or another, and we ended last year with a big backlog of work, but the trend now is to slow it down,” Miller says. “It’s all finance-related—because of the lack of it. Since Christmas, we’ve had $500 million worth of work put on hold or change direction.”

The changes in direction include reducing the size of a project or reducing the scope of the first phase of a multiphase project. Even though more organizations are hitting the brakes on their construction and expansion plans, Miller notes that there’s still a lot of work going on.

“We’re still responding to a lot of requests for proposals, so that’s encouraging,” Miller says. “They’re smaller in scope, but there still are projects coming out.”

Of the 189 companies that participated in Modern Healthcare’s Construction & Design Survey, 98 report that they had a total of 509 projects stalled or stopped last year with financing and the economy cited as the most common reasons. Of these, 89 projects restarted in 2008, while 91 companies report experiencing no stops or stalls of projects last year.

Mark Kearschner, construction services director for the healthcare alliance and group purchasing organization Premier, which includes 2,100 not-for-profit-hospitals, says there’s still plenty of healthcare construction activity under way, noting that his organization is currently tracking some $8.5 billion worth of ongoing new construction projects.

Still, he predicts a 3% to 3.5% drop in healthcare construction activity for this year.

“The fourth quarter of ’09 will be important,” Kearschner says, adding that an aging population combined with an aging healthcare infrastructure and the need to accommodate new technology will continue to drive construction in the long term.

Among other notable trends according to respondents in this year’s survey is the continued growth in “green” construction practices and patient-safety features such as “same-handed” rooms—where everything is in the same place in every room. They’re increasingly becoming the norm, which is also happening with single-patient rooms.

According to the 2009 Community Hospital Replacement Study conducted by Portland, Maine-based Stroudwater Associates, which analyzed 72 replacement hospitals completed between 2000 and 2007, new hospitals have 40% more space per bed—or 716 square feet—than the facilities they replaced.

“There are so many advantages to single-patient rooms such as infection control,” says Gina Pugliese, vice president of the Premier Safety Institute, adding that single rooms also increase privacy and patient satisfaction. She thinks that there may also be reason to suggest that the bigger rooms may also reduce patient falls because there is more space to accommodate longer visits by family members who can help the patient get in and out of their beds.

Doug Wignall, international healthcare director at the Omaha, Neb.-based architectural firm HDR Architecture, says one feature that’s becoming more common in an effort to prevent patient falls is the installation of grab bars along the entire path from the bed to the bathroom.

“Remarkably, it’s something that hasn’t been done before,” Wignall says. “Sometimes the obvious is the hardest to see.” HDR ranked first on the survey’s list of architectural firms, with $5.9 billion in business in 2008 vs. $3.3 billion in 2007.

Wignall says that “patient safety is still key” when it comes to designing hospitals. “We’ve taken the concept of same-handed patient rooms into the same-handed hospital.”

Noting that it’s still an untested concept, Wignall declined to name the same-handed facility, but says it has been open for about a year and its patient-safety record has been tracked, so he thinks there will be some data “in the not-too-distant future.”

Dallas-based HKS, ranked second on the list of architectural firms, reported $4.4 billion in business in 2008 compared with about $3.3 billion in 2007. The HKS’ Clinical Solutions and Research group set up a simulated patient room nine different ways and had 10 left-handed and 10 right-handed nurses perform basic tasks such as checking vital signs or helping patients sit up in their beds. While kinesiology and nursing experts are still examining videos of the nearly 550 simulated patient encounters, Debajyoti Pati, the firm’s research director, says one thing is clear: “There is sufficient evidence to support standardization.”

In other design-related research, Pati says nurses reported more alertness and less stress when exposed to more natural light and windows with a view other than a brick wall. So, in that respect, natural lighting definitely becomes a patient-safety issue, he says.

Terry Ritchey, manager of the HKS research group, says that other ongoing studies include reducing nurse travel distances that bring caregivers closer to the patient and reduce “hunting and gathering” time.

“We are developing decentralized nurse stations, which really go hand in hand with the way health information technology is going,” Ritchey says, though she adds that a centralized space is still needed for greeting and administrative functions. But private areas are also needed so nurses can collaborate on a patient’s care somewhere other than a hallway where other patients can hear the conversation.

In terms of patient safety, Howard Allums, a vice president at Turner Corp., says, “What used to be seen as an enhancement has become the standard,” and that includes same-handed patient rooms. Turner, which ranks first on the survey’s list of construction management companies, posted $2.6 billion in business in 2008, up from $2.1 billion the year before.

“It’s still debatable whether same-handed is the way to go,” Allums says. “But, in the last three to five years, we’ve seen same-handed design go from 10% to 15% of hospital construction to 30%.”

In addition to patient-safety, Allums says environmental design aspects and energy conservation are being given more consideration than ever before. “More facilities are seeing how investing small amounts of money can have long-term paybacks that they weren’t considering before,” Allums says. “There’s potential for huge operating savings in the long-term.”

Another environmental trend Allums sees is more hospitals installing “green roofs” to provide a more aesthetically pleasing environment for patients and staff.

“I think, even though the main focus is on the patient, more facilities are taking the staff into account” in healthcare design, he says.

One of the most environmentally ambitious projects cited is the new 168-bed Dell Children’s Medical Center of Central Texas, Austin. Part of the Seton Healthcare Network, Dell Children’s opened in July 2007 and is scheduled this week to receive formal recognition from the U.S. Green Building Council as the first and only healthcare facility to achieve the Leadership in Energy and Environmental Design, or LEED, platinum designation, the highest level possible. The building was designed by Columbus, Ohio-based Karlsberger, which placed sixth on the survey’s ranking of architectural firms.

The building sits on 32 acres and it anchors the redevelopment of a more than 700-acre site where the Robert Mueller Municipal Airport once operated. Opened in 1930, it was the city’s first airport. It closed in 1999, a month before the Austin-Bergstrom International Airport opened to passenger flights.

The new hospital received the platinum designation based on its energy efficiency, water conservation, use of natural light, and the conservation and recycling of materials—47,000 tons of material from the old airport runway was used on the site.

Alan Bell, Seton’s director of design and construction, says 52 points out of a possible 66 are needed for LEED platinum designation, and the facility received 54 points with the biggest chunk coming from having on-site, natural gas-powered energy generation. But he says the most notable aspect is probably all the sunlight pouring in.

“The biggest thing we see is the daylight in the building; with the exception of surgery, you’re always within 32 feet of a window,” Bell says. “It just gives you a whole lot better feeling in the hospital—especially in a pediatric facility. You’re not taking kids down a dimly lit walkway.”

Noting that the LEED platinum designation is based on metrics and “is not a beauty contest,” Bell says it took four months of measuring and calibrating before the building met its energy efficiency targets.

“A high-performing building is like a Formula 1 race car, you have to keep tuning that thing,” he says of the building’s many light sensors and temperature triggers. “It’s not an easy building to maintain. Let there be no misconception that, just because you’re doing a sustainable project, someone’s throwing money in your pockets.”

That said, Bell adds that the sustainable design and construction reduced some costs and aided fundraising. Bell says that the entire project cost about $206 million with construction accounting for $130 million. About $87 million in donations was raised to help cover the expense, Bell says.

While some of the fundraising success could be because of the fact that children’s hospitals make for popular charities, Bell says a lot had to do with the community’s support for causes such as the environment.

“It fits well in Austin,” Bell says of the building. “And people with discretionary money want their names linked to a sustainable project. There’s a huge philanthropic advantage to a green project.”

As capital budgets get tighter Turner’s Allums says philanthropic donations can make a difference, and that environment friendly designs can have a significant impact on fundraising.

“We need help, and it’s pretty amazing some of the funds that have been raised by facilities going green,” Allums says.

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A total of 189 respondents participated in Modern Healthcare’s 30th annual Construction & Design Survey, compared with 185 last year. This year’s total includes 98 architecture firms, 34 construction management companies, 25 general contractors, 23 development firms and nine design/build firms. Announcements, invitations and reminders were published in the magazine, sent via e-mail and were available online at modernhealthcare.com/surveys from Nov. 10, 2008, through Jan. 30, 2009.