Medical Providers Seek to Reach the Right People in the Right Place at the Right Price

The health care industry’s shift from treating sickness to supporting preventive wellness is starting to take shape on the construction front—and the geographic scope of services is broadening as well. Recognizing this new continuum of care, medical providers are busy building or expanding outpatient clinics, freestanding primary care facilities, specialty cancer centers and rehabilitation hospitals. With those services spider-webbing into the community, main hospital campuses are undergoing renovations to meet standards for private rooms and adapt spaces to accommodate the remaining patients who need serious care.

“Big hospitals aren’t expanding like they used to. Instead, they’re building small clinics in suburbia and rural areas,” says Andy Wright, president of FlorWright, which specializes in sterile flooring for medical facilities around Tulsa, Okla. “This trend stems from the fact small community hospitals weren’t surviving and generating enough revenue. It’s more cost-effective to open a new clinic. Anything more serious goes to the main hospital, which then has to revamp who it’s dealing with on a daily basis.”
Case in point: Dekker/Perich/Sabatini, a New Mexico-based architect, is currently working on a project for Presbyterian Health Services’ main hospital in Albuquerque, converting all double rooms to single rooms and improving accommodations for family members to aid the healing process. Although the number of beds will decrease, Presbyterian is still meeting the community’s needs because it built another new medical center just north of the city to serve Rio Rancho, N.M.

“Improvements are focused on improving care and seeing more people through geographic outreach,” says Bill Sabatini, principal at Dekker/Perich/Sabatini. “We may be constructing fewer new hospital beds, but other facilities will be in demand.”

Other Drivers of Change
Additionally, hospitals are competing with each other for doctors, nurses and administrative professionals who want to work in an environment that’s fresh and modern. For example, at Memorial Hospital in Gulfport, Miss., Roy Anderson Corp. was tasked with upgrading fatigued infrastructure, replacing the exterior skin, eliminating moisture intrusion and updating patient rooms. The project, which won a 2016 Excellence in Construction® (EIC) award from Associated Builders and Contractors, generated fewer beds per unit, resulting in a lower patient-to-nurse ratio and a quieter, spa-like environment for staff and visitors. 
Roy Anderson Corp
The competitive environment is also yielding a number of mergers and acquisitions, often requiring a transaction of real estate assets and potentially disrupting in-progress projects. At the HealthSouth Rehabilitation Hospital in Norwood, Ohio, which Robins & Morton was building for The Sanders Trust to extend access to services around Cincinnati, the tenant/operator changed six months into the 11-month schedule. The acquisition resulted in multiple changes to the 40-bed inpatient hospital’s floor plan, equipment and building engineering requirements to accommodate a different model of care. Robins & Morton won a 2016 EIC award for expertly handling the transition and several other weather and coordination challenges.

As partnerships gain prevalence, large systems such as Ascension Group are assuming management responsibilities for local hospitals. “It will be interesting to see how that affects subcontractors; they’ll have to do all of a system’s projects or none of them,” Wright says. “We’re still a few years away from that, but if hospitals keep merging and combining management, I can see them seeking subcontractors that can handle their portfolio of projects across the country.”

Looking further ahead, integrated wellness services will surely be part of that portfolio. Facilities will combine medicine, fitness, nutrition and recovery—in other words, human performance centers for average people, not just athletes. Clinical care will be coupled with membership-oriented fitness, essentially a retail component that serves as a gateway to the health system with positive revenue implications for the owner.
More robust telemedicine is around the corner as well. According to a 2015 collaborative research program between the National Institute of Building Sciences and the Academy for Healthcare Infrastructure, “the future will likely see a drive toward the use of home settings and personal technology. A smartphone, for example, may be the most efficacious means of addressing one’s personal health when communicating with a care provider.”

Through Project ECHO, the University of New Mexico’s School of Medicine links expert specialists with primary care clinicians in local communities so patients can be treated where they are. Equipping medical centers to deliver virtual care doesn’t require extensive or sophisticated diagnostic space, and patients benefit from an easy way to report problems, adjust medications and avoid costly readmissions. 

“This is making a major impact on people suffering from chronic illnesses such as diabetes or Hepatitis C,” Sabatini says. “A lot of people in New Mexico live in remote areas and they’re very poor. It’s better for them to stay where they are and see their primary care physician. It’s an innovative way to care for more people.”

Cost and Collaboration Factors

As owners juggle new norms in the delivery of care, cost remains front and center on construction and renovation projects. That’s why accurate estimates and BIM are so important.

“There’s a lot more collaboration between contractors and design firms, with technology making the process easier. Contractors are involved in constructability issues and materials selection to help make the process more efficient with better quality,” Sabatini says. “Anything subcontractors and general contractors can do to enhance their ability to forecast costs and be involved in the design process, the better.”
DeAngelis Diamond
But getting subcontractors to estimate costs can be tricky now that construction markets are busy again. That’s the problem DeAngelis Diamond, a Florida-based construction management firm, has run into across the southeast. The company just opened its fifth office in Franklin, Tenn., an area of the state that is exploding with activity.

“Subcontractors are so busy estimating other jobs that we had to increase our in-house estimating and preconstruction staff,” says Jason Sain, vice president and principal at DeAngelis Diamond. “We also use Modelogix software to track historical data about what hospitals cost around the country so we can quickly put together a high-level conceptual budget.”

Once a project is awarded, DeAngelis Diamond preaches the value of a teaming approach in which the owner, designers and major trade contractors establish a project scorecard. In other words, they determine what factors will deem the project a success when it’s complete.

“Under budget and on time are what we get paid to do, so those alone don’t give us a great scorecard,” Sain says. “If we do an interior renovation, a condition of satisfaction might be to receive no complaints from adjoining patients.”

Or, for an operating room renovation, the scorecard would pinpoint the goal of not finding anything during demolition that the team didn’t already know was there and that would cause a construction delay.

“This sets the tone and culture for the project,” Sain says. “If we encounter an obstacle, we reflect back to the established conditions of satisfaction and the solution usually becomes obvious.”

Integrated project delivery (IPD) is a great fit for health care jobs as well, so long as the scope of work is big enough. For DeAngelis Diamond, the ROI threshold for IPD is $10 million or more. 

“We like to go slow to go fast,” Sain says. “The more we plan upfront, the faster we build projects. Everything, including client satisfaction and punch list approvals, increases when we implement collaborative agreements.”

Such was the case on the Lakeside Behavioral Health System in Memphis, Tenn. DeAngelis Diamond signed the same contract as the owner, architect and major trade partners, and submittals were done during design—literally cutting the typical timeline in half. 
DeAngelis Diamond
While most design teams list a few manufacturers in specs to keep the process competitive, on this project, the team performed a “good, better, best” analysis in order to reach an agreement on which window manufacturer they wanted. Then the designer could design to that window, and the glazing contractor could prepare the shop drawings during design. Essentially, the windows were procured before the building permit was obtained.

“The same goes for ceiling tiles, doors, generators, etc.,” Sain says. “That’s how we really gain speed to market.”

Wright would love to see that spirit of preconstruction teamwork extend to specialty finish contractors. “If we were brought in earlier, I could solve more problems,” he says, noting many facilities waste money over-specifying specialty rubber floors that could be replaced in some areas with cheaper vinyl that lasts just as long. “By the time we get the plans, the building is rocking and rolling. 

“With specialty subcontractors, our merit doesn’t usually come into consideration; we’re either the low bid or not,” Wright says. “It would be nice to have a cost-plus mentality so we could come to the negotiation table like a general contractor and discuss our credentials and how we would approach a project.”

Competitive Advantages
The use of lean principles, prefabrication and technology can really set a project team apart. Not only is DeAngelis Diamond a proponent of pull planning, but it also leverages offsite assembly whenever possible, especially for doors and hardware. On one job, the company contracted with a business in Alabama to install all the hardware on doors and then stacked them for shipment to the jobsite in Puerto Rico. While shipping costs were three times as much as usual, the installation time was 10 times quicker than expected.

For something like bathrooms, a premium is paid per unit, but it is regained on the schedule. The bottom line: “It takes about 40 bathrooms for prefabrication to make financial sense,” Sain says. 

For the HealthSouth Rehabilitation Hospital in Norwood, Ohio, the underground plumbing, overhead racks and interior walls were prefabricated. On the exterior walls, the subcontractor saved more than 200 manhours, equal to $5,400, and panels were installed quickly enough to reduce the build time 17 percent.

In addition to reducing waste for health care owners, contractors and designers are beginning to embrace virtual reality (VR) as the technology comes down in price. While Dekker/Perich/Sabatini still does full-size physical mock-ups, it is inserting VR into the review process as a method for clients and end users to make sure specialized spaces have everything they need in the right spot. 

After testing the technology on a few jobs, DeAngelis Diamond decided to build a VR room at its corporate office in Naples, Fla. “It’s another tool to communicate to clients and subcontractors about what a patient room or operating room will look like,” Sain says.

Sabatini concurs the whole communication process between the design and construction industries is evolving in a positive direction: “There aren’t as many change orders, costs are more easily predicted, and owners are getting better results.” 

Joanna Masterson is senior editor of Construction Executive. For more information, email, visit or follow @ConstructionMag.