Condition Stable

Health-care sector will continue as a leading market for 2004

Across the Southeast, and especially in Florida, the health segment of the construction market remains strong but competitive for firms that know how to build these specialized facilities without disrupting existing operations.

"We continue to see the health-care segment staying steady," said Terry Brantley, senior vice president of Bovis Lend Lease of Nashville, Tenn., Engineering News-Record's top-ranked health-care contractor. "There continues to be a lot of upgrades to existing facilities and a lot of deliberation over replacement of existing hospitals due to the age of the building, infrastructure or the facilities [being] in the wrong place as related to where current growth is moving."

Bovis has multiple projects under way in the Southeast. It is building a three-story addition to Gaston Memorial Hospital in Gastonia, N.C., and managing a three-story, $53 million addition to HealthPark Medical Center for Lee Memorial Health System in Fort Myers, Fla.

In Fort Lauderdale, Bovis and Centex Rodgers, also of Nashville, are working on a $163 million expansion of Broward General Medical Center. The contract includes system upgrades to the existing structure, a new lobby, an emergency department, a surgery center, a cardiac-care unit and an outpatient-services area.

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There seems to be more emphasis on emergency and outpatient departments. Todd Robinson, a principal and senior health-care designer with Earl Swensson Associates (ESa) of Nashville, said hospitals are looking for easier access to their outpatient facilities.

For example, ESa features a new entry in its design for Floyd Medical Center in Rome, Ga. The $43 million project, managed by ADAMS Project Management Consulting of Atlanta, should be complete in July 2005.

Hospitals also are adding beds, primarily private rooms. Fayette Community Hospital in Fayetteville, Ga., another ESa project, is doubling its number of rooms, just seven years after opening. Skanska USA Building of Atlanta is constructing the $31 million, five-story project.

Fayette Community will align space along service lines, incorporating physician offices as well as inpatient care into the cardiac-care center and locating obstetricians' offices with labor and delivery suites in a women's center.

"It allows physicians to be efficient with their time," Robinson said. "And it creates programs and centers of excellence within the hospital."

Emergency rooms are gaining private rooms, rather than curtained spaces, and zoned treatment areas. Robinson said a new federal law protecting privacy is contributing to the trend.

"All hospitals continually have to upgrade," said Wayne Baswell, vice president of business development for Centex Rodgers. "Large expansions and new satellite hospitals tend to come in cycles."

He attributed the cyclical nature to state certificate-of-need processes.

Larger projects usually include a medical office building, he added. One example is Memorial Hospital Miramar, a new $74 million, 100-bed community hospital in Broward County, Fla., scheduled for completion by Centex Rodgers in 2005. It includes an attached medical center to house approximately 100 doctors.

Baswell sees hospitals trending toward a hospitality-like ambiance, with large grand entrances, atriums and water features and an emphasis on patient satisfaction. The $130 million expansion to Aventura Hospital and Medical Center, in Aventura, Fla., Centex is building serves as an example. Natural woods decorate the domed lobby to create a warm, healing environment.

Centex also has a contract to construct the Mayo Clinic's new $207 million hospital in Jacksonville, Fla., and a three-story Centre for Women's Health at South Lake Hospital in Clermont, Fla.

The Haskell Co. of Jacksonville, Fla., has started work on the $60 million, 92-bed Baptist Medical Center South. Perry-McCall Construction Co. of Jacksonville is building Florida's first proton beam cancer treatment facility at Shands Jacksonville.

Creative Contractors of Clearwater, Fla., is completing a $52 million, 300-bed replacement tower for Lakeland Regional Medical Center in Lakeland, Fla. And in Clearwater, Morton Plant Hospital has embarked on an $84 million expansion project that includes a new heart hospital.

Brasfield & Gorrie of Birmingham, Ala., is working on Presbyterian Hospital Huntersville, a 50-bed, $55 million facility in Huntersville, N.C. After court delays related to challenges to its certificate of need from another hospital, work got back on track in May, with completion now expected late in 2004.

In Charlotte, N.C., Presbyterian Hospital is building a $58 million women's center. And Lincoln Harris of Charlotte is managing construction of a $40 million, six-story addition and $18 million, 3,000-space parking garage at Carolinas Medical Center.

Robins & Morton of Nashville broke ground in October on the $32.6 million Coastal Carolina Medical Center in Hardeeville, S.C., for Province Healthcare of Nashville. The community has been without a hospital for more than two years. The new 41-bed facility will open in early 2005.

Also in South Carolina, Skanska in managing an $85 million replace-in-place construction program at Self Regional Healthcare in Greenwood. The seven-phase, five-year project includes a 232-bed patient tower and cardiac, cancer and critical-care areas.

In Atlanta, McCarthy Building Cos. of St. Louis is building a $132 million Emerging Infectious Disease Lab for the Centers for Disease Control and Prevention. It is scheduled for completion later this year.

The Veterans Administration is considering building new facilities in the region, including a new $170 million hospital in Orlando and a $45 million clinic in Pensacola, Fla., as well as additions to existing hospitals. But Brantley, the Bovis vice president, cautioned that more privatization may be in store because the VA continues losing money.

"If you have groups that can't control costs and deliver [health care] cost effectively, it's having an impact on the overall marketplace," he added. "And a lot of rural hospitals continue to be in a strain because local city and county governments can't afford to do what they need to do."

Aging hospitals need new equipment and pleasing surroundings to attract physicians, staff and patients. Otherwise they lose talent and revenue to larger regional centers. Typically they lack the financial resources to invest in their physical plant and begin a hard-to-reverse slide, at which time a proprietary hospital chain, such as Florida's Health Management Associates, may purchase them.

"Rural and VA hospitals make up a large percentage of the overall health-care industry," Brantley said. "Facilities in rural markets are small and every small community has one. And it's in trouble, and it's old and doesn't meet codes."

For the building community, the change in the rural marketplace presents opportunities. For instance, HMA is building a $52 million replacement hospital in Brooksville, Fla.

While strong, the health segment remains competitive.

"You have a lot of people who haven't done health care," Brantley said. "But other markets are down and they are trying to sell themselves as health-care builders. It's a specialty industry because of the codes and systems."

Baswell of Centex Rodgers said hospitals prefer working with a contractor familiar with health facilities and will cause minimal disruption to existing operations. Contractors not only must guard against excessive noise and vibration, but also monitor air quality. Sometimes that means working odd shifts and installing extra safeguards.

"It's not for the faint of heart," Brantley said. "It takes someone who knows what they're doing."

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