From updated emergency departments to microhospitals and specialty facilities, renovation and construction trends in healthcare focus on meeting patient and market needs while navigating an unpredictable legislative landscape.
At the end of 2017, more than 15,000 healthcare construction projects were underway in the United States, with an expected 3.5 percent growth in healthcare spending in 2018, according the American Institute of Architects.
Among the top renovation/construction trends are emergency department upgrades, micro-hospitals, acute care facilities and upgrades to energy management systems, operating rooms, hospital pharmacies and patient rooms.
The Affordable Care Act played a pivotal role in healthcare planning and construction, according to a 2017 Hospital Construction Survey from Health Facilities Management and the American Society for Healthcare Engineering. Over the last few years, construction projects focused on general medical and immediate care centers, ambulatory surgery centers, telehealth facilities and psychiatric hospitals/behavioral health centers.
With the tumultuous political environment surrounding healthcare, owners are struggling with how to approach long-term planning.
“The climate is such a rollercoaster right now. Healthcare owners can’t plan ahead for five years from now – they are planning for two years,” said Jason Adkins, CBRE Healthcare program and project manager in Richmond, Virginia. “It’s so dynamic and shifting, they don’t always put all of their eggs in one basket. A lot of systems and owners are putting together a master facility plan and will change with the climate around it.”
Renovation vs. new construction
A 2017 Hospital Construction Survey found that most hospitals are continuing the trend of investing in renovation projects versus new construction.
Michael Barksdale, senior director of project management for CBRE Healthcare in Dallas/Fort Worth, said renovation trumps new construction simply because healthcare systems look to the most economical solution using the real estate they already own.
Steve Higgs, CBRE senior managing director in Atlanta, said the decision between renovating and building new depends on the community. There is a push to offer care where the patient lives through a mix of freestanding clinics, surgery centers and micro-hospitals.
Rimkus Building Consultants President Jack Dolan of Fort Lauderdale said many capital expenditures are focused on maintaining or increasing market share. If hospital administrators can improve patient care in a way that is recognized by the public, or if a state-of-the-art operating room will attract first-class doctors, those projects will be funded.
“Because there are so many existing facilities, there will always be more renovation projects than new construction projects in raw numbers,” Dolan said, adding that 75 percent of all projects in 2016 were renovations.
One clear trend is updating and renovating emergency departments (ED). Adkins said this stems from overpopulation in the ED.
“A lot of times when they renovate the ED, they are making way for the volume they are already seeing,” Adkins said. “A lot is to increase operational flow and efficiency, but also to offer a better experience for the patients and families, and to shorten wait times.”
The ED, Adkins said, is the front door for a facility’s inpatient population. While hospitals don’t necessarily make money on these ED upgrades, it opens the door and provides an introduction to patients who have significant healthcare needs.
Top spending decision
One trend emerging over the last two years are micro-hospitals. Barksdale said owners are now building smaller scale inpatient facilities to expand their footprint without the major capital investment of a full-scale hospital.
“Where you would have put a major health facility, now you’re seeing smaller scale – 10,000 to 50,000 square foot – micro-hospitals providing quick level services with an ER and surgical suites at a scale appropriate to the community,” Barksdale said.
Tertiary care facilities also are rising on a regionalized basis. In Georgia, Children’s Healthcare of Atlanta is building a $1.3 billion facility that will take over the functions of the Egleston hospital at Emory University. The campus also will include The Center for Advanced Pediatrics for state-of-the-art study and care of the most complex conditions. By consolidating the metro area’s freestanding pediatric hospitals, the system is marketing to top pediatricians as well as families looking for care.
“Land isn’t getting cheaper. Hospitals are constrained by the land surround them and don’t want to put together a portfolio of real estates,” Adkins said, adding that owners are looking hard at their investments and doing everything from moving offices and non-clinical services off campus to make way for revenue-inducing programs.
A more educated patient base also is leading to a larger push for ambulatory care, especially outpatient dialysis programs, medical radiation oncology adjacent to a hospital, physical therapy and rehabilitation centers outside the main campus, and standalone cancer centers.
“Patients are living longer, but they are more educated and know they can get an outpatient procedure and be back in their home that evening,” Adkins said. “That’s been the face of healthcare for the past two to three years, and we’re heading in that general direction.”
Virtually every project demands that energy consumption be considered as part of the analysis, but that doesn’t mean energy is the primary focus, according to Dolan.
“Whether the project is an IT upgrade, an operating room remodel or pharmacy upgrade, hospital administrators want to know what the energy impact will be,” Dolan said.
With a relatively small investment that results in typical energy savings between 5 percent and 15 percent, retrocommissioning can provide a return on investment of less than one year by identifying and implementing operational and maintenance improvements, said Dolan.
Heating and air conditioning system upgrades are the second most important upgrade.
“When a chiller, boiler or air handler fails in a healthcare facility, it is a major problem,” Dolan said, adding that proper maintenance is only part of the equation. A risk analysis of the systems to determine how they are being used from an engineering standpoint is key.
Upgrading infrastructure around critical facilities – like the operating room and critical care units – keep hospitals running and operational. Adkins said a lot of facilities are looking for +1 redundancy for mechanical systems, which provides component backups and provides easier maintenance and the ability to take certain systems offline while other components are still functioning.
“A lot of facilities management engineers, in general, work in older facilities, and their chief complaint is about systems that don’t talk or work well together,” Adkins said, adding that building-wide systems integration (BWSI) is making things smarter and safer by connecting components and facilities, building automation systems, HVAC systems, and security, fire and hazard protection services, as well as lighting controls.
According to Health Facilities Management, patient satisfaction is an 86 percent driving factor in facility design once a project is funded.
Converting semiprivate rooms to private, installing better entertainment systems, and focusing on technology provide a tangible experience for patients and families. Sometimes just heavy cosmetic changes around making a patient floor more accommodating are renovation drivers, Higgs said.
“Walk into a patient room and see flat screen TVs,” Barksdale said. “More important is educational information associated with the in-house TV package. It’s not only a greeting by the facility, but an understanding of the facility, the doctors treating you, the procedure you’re going through, the ED and post-op recovery.”
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