A Healthy Market

Health-Care Projects Abound Throughout Southeast

By Debra Wood

Health-care projects are flourishing throughout the Southeast.

"There was a slow spot over the last couple of years while people were getting their planning in place, but now projects are starting to break," said Allan Dedman, vice president of R.J. Griffin & Co., Atlanta.

R.J. Griffin broke ground in October on an 81-bed replacement hospital for Gwinnett Hospital Systems' Joan Glancy Memorial Hospital in Duluth, Ga. The company also began construction in the fourth quarter of 2004 on a $90 million expansion of Atlanta's Children's at Scottish Rite for Children's Healthcare of Atlanta.

Steve Gressel, senior vice president with Skanska USA Building in Atlanta, said there has been no slowdown during the past two years, and "we see continued growth for 2005. With new and replacement hospitals, there is much more than in the past 10 years, and the projects involve patient beds and patient towers."

About a decade ago, health-care experts doubted a need for additional beds. But with an aging population, population shifts to the Sunbelt and increased concerns about privacy, more healing environments and customer and employee satisfaction, many hospitals have undertaken extensive expansions or replacement projects that included adding beds in private rooms.

"This is the first time since probably the mid-1970s where the number of acute-care beds across the country has increased," said Terry Brantley, senior vice president and principal in charge of Bovis Lend Lease's Nashville office. He added that over the years, many facilities completed small additions or renovations and are now ready for major overhauls or replacements.

Brantley said obsolete buildings don't have the flexibility needed to adapt to changing technology. "And the demographics and population within cities and locales have changed," he said. "Hospitals are finding themselves in the wrong place."

Brantley said hospitals are designed now to adapt to evolving technologies and a changing marketplace. Common additions include wireless systems, electronic record keeping, Internet services for patients, portable diagnostic equipment, robotics and other technologies. Wireless requires additional space for antennas in the ceilings.

A 2004 survey of 200 senior health-care executives conducted by Bayer Consulting, for Turner Construction Co. found that 69 percent of the executives reported they were likely to undertake a major expansion within the next three years. The hospitals indicated reducing cost and maintaining quality were the top two considerations when launching a capital project.

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"This is the strongest market I have ever seen, and I've done nothing but health-care construction for my whole career, 40 years," said Robert Levine, vice president of Turner Healthcare of Brentwood, Tenn. "Our new awards have almost doubled over the prior year, and the average size of our projects are substantially larger."

Among Turner's projects is a $90 million, 400,000-sq.-ft. addition to Lexington Medical Center in West Columbia, S.C. The project includes expanded operating rooms, clinical and staff-support space and a bed tower.

Children's Hospitals

Not all the projects cater to an aging population. Brantley said there has been an increase in specialty hospitals, including pediatric facilities.

Bovis is building the two-story, 75,000-sq.-ft. Reuter Children's Hospital Outpatient Center in Asheville, N.C., for Mission Hospitals. Bovis also is providing preconstruction services for a 220,000-sq.-ft. surgery expansion and adult critical-care center for Mission.

Children's Healthcare of Atlanta estimates 140,000 will live in its proximity by 2007. In addition to R.J. Griffin's project, the health system also announced an expansion at its Children's at Egleston campus and awarded a contract to Brasfield & Gorrie of Atlanta for a four-level parking deck topped by a five-level medical tower.

All Children's Hospital in St. Petersburg, Fla., selected Brasfield & Gorrie to build its eight-story, 300,000-sq.-ft. replacement facility and outpatient services center, slated to break ground this year.

Levine Children's Hospital, a 234-bed facility in Charlotte, N.C, broke ground last fall. Centex Construction of Nashville received the construction-manager contract to build the $85 million project for Carolinas HealthCare System.

Design elements

Many hospitals have begun embracing more healing environments and evidence-based design concepts, said Sam W. Burnette, senior project designer/principal with Earl Swensson Associates of Nashville.

Evidence-based design refers to principles that have been proven by studies to increase efficiency or promote healing. Researchers have found that such innovations as decentralized nursing stations, noise reduction, soft flooring and single rooms not only appeal to patients and staff but also can reduce operating costs.

"The more savvy facility executives are realizing you have to cater to nursing and technical staff to maintain good talent," and that was not typically considered just four years ago, Burnette said.

Burnette designed Broward General Medical Center's $90 million construction expansion at its Fort Lauderdale campus and incorporated evidence-based design. Bovis and Centex are building the 400,000-sq.-ft. project, which includes an expanded emergency department, surgery center, cardiac-care unit and outpatient-services area.

As with many hospitals, Broward General also placed an emphasis on upgrading security.

Baptist Health South Florida hired Skanska USA Building to construct its $80 million, 120-bed replacement hospital in Homestead, Fla., due for completion in 2006. The new facility will triple the size of the existing hospital, with a larger emergency department and a campus with a soothing environment. Anticipation has already helped the hospital recruit nurses.

"It's still a competitive market for the majority of hospitals," Skanska's Gressel said. "They want nice facilities and are concerned with staffing efficiencies The emergency department is becoming bigger because it is an entry point for a high, growing percentage of admissions."

The Southeast Market

In the Southeast, competition for projects remains fierce. Skanska typically finds itself vying for jobs with five to 10 other firms. Twelve firms competed with Bovis to provide CM services at Lee Memorial Health System's 122-bed, $53 million addition to HealthPark Medical Center in Fort Myers, Fla.

Gressel and Brantley still find firms with little health-care experience trying to enter the market segment because business in other segments has slowed. But Jack Darnell, vice president of health care for Brasfield & Gorrie, said new players have started dropping off as office and retail projects rebound.

Brantley said firms aiming to get in on the health-care sector frequently try to hire people with health-care expertise, creating a bidding war for experienced project-team members.

"You are going to have to pay something beyond the market norm to recruit people, and that has created play within the marketplace that's a little difficult," he added. "My belief is there is more work in health care than there are experienced health-care people to do it."

Darnell said Brasfield & Gorrie sends foremen, superintendents, project managers and other key players to training sessions to learn more about the business of health care, including everything from patient flow to how the system works.

Gressel said there has been an increase in construction-manager-at-risk projects and a gradual growth of design-build contracts for smaller projects. Skanska is building the $180 million North Carolina Clinical Cancer Center for the University of North Carolina Hospitals as a construction manager at risk.

Overall, across the Southeast, there's no sign of letting up as facilities rebuild and prepare to meet communities' medical needs in the 21st Century.

"Health care is as strong as a bull," Darnell said. "There continue to be more opportunities."

Useful Sources:

Turner Construction Co. survey
http://www.turnerconstruction.com/corporate/content.asp?d=3233&p=3231

Center for Health Design
http://www.healthdesign.org/

ENR- "Contractors Join Fight to Stamp Out Killer Hospitals"
http://enr.ecnext.com/free-scripts/comsite2.pl?page=description&item_id=0271-8650&purchase_type=ITM