Health Care's Appetite for Construction

Crain’s Health Pulse
March 2, 2015
Health Care's Appetite for Construction

Trends in health care have been very good to the construction industry for the past few years. The move from inpatient to outpatient settings has meant billions of dollars in projects, from new ambulatory facilities to hospital renovations. Some 300 contractors, engineers, architects and others gathered last week at an event hosted by the Engineering News-Record to learn how to get a piece of the action.

There are projects aplenty. Joe Bolano, vice president of facilities and capital projects at North Shore-LIJ, said that since 2010, the system has more than doubled its outpatient facilities, to 241 buildings with 2.4 million square feet of space. That excludes recent acquisitions in Westchester. North Shore-LIJ has plans for 50 GoHealth Urgent Care Centers in the next three years through a joint venture with California-based Access Clinical Partners.

Mr. Bolano said North Shore-LIJ can complete construction of an urgent care center in six weeks—an important factor in beating competitors to specific markets as consumers seek care closer to home.

“Never in my career would I have thought we would have heard the term ‘speed to market’ when it came to health care,” he said. “Ann Taylor might have speed to market, but they’re in the retail business.”

Ambulatory surgery projects aren’t as quick to complete because of the need for Article 28 certification—which Mr. Bolano said is “slower than it’s ever been” once the state Department of Health tightened its standards after Superstorm Sandy.

Fueling other projects is demand from providers for potential deals in buildings that have been zoned for other purposes. One example, said Andrew Jarvis, director of health care at the New York office of architectural and engineering firm EwingCole, is an Upper West Side urgent-care clinic run by Mount Sinai in a building that once housed a McDonald’s.

“The whole thing that’s driving the migration to outpatient services is creating efficiency and reducing costs. … We’re not just taking old models of care and moving them into different buildings,” Mr. Jarvis said.

The health care industry is beginning to look at modular buildings that use preconstructed pieces assembled onsite. That option is particularly useful for providers that lease property, said Kristin Moore, director of health care at Canada-based DIRTT Environmental Solutions.

“You may only be signing a lease for three to five years,” she said. “Do you really want to abandon that investment in construction, where you have spent a lot of money on building out that space?”

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