Engineering Inc. - Spring 2020 - 7

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INFRASTRUCTURE MATCHING THE POLICY

When the ACA was passed in 2010, the health care
industry went into the doldrums. For a long time,
there was so much uncertainty about the law that
many health care providers put capital projects on
hold until they could get a better sense of the market's projection. It was not until 2015 that the market began to pick up again.
"They could not wait any longer," says David
Huey, president of Dewberry Architects and director
of the firm's health care practice. "There were a lot
of deferred building and maintenance projects that
had to move ahead to meet demand."
Industry leaders also needed time to understand
the implications of the law on their business model.
"The industry had a challenge because the policy
did not match up with the infrastructure in the
industry," says Zorich. "It boiled down to changes in
the reimbursement model. Previously it was fee-forservice, but under ACA it became fee-for-outcome.
It has taken us this long to get back in synch, with
the infrastructure matching the policy."
The impact of the reimbursement model change
can be seen in the shifting character of capital projects. Most of the recent construction has concentrated on outpatient facilities, medical office buildings, small hospitals, and renovations and upgrades.
"We are seeing a client-driven focus on short-stay
procedures and ambulatory care," says John Koch,
associate partner at Jaros, Baum & Bolles (JB&B).
"While maintaining quality of care, they are looking
to provide the requisite services and get the patient
back home."
According to FMI, a small number of very large
health care campuses are in the design pipeline, but
the health care market is moving away from the
inpatient model.
MILLENNIALS ARE DIFFERENT

The U.S. population is aging, and that means more
demand for health care. In 2025, the last baby boomer will hit
65, and by 2030 1 in 5 Americans will be 65 years or older.
According to the U.S. Centers for Disease Control and Prevention, people over 65 have three times more hospital days than the
general public, and those over 75 have four times more.
"And they tend to be sicker patients with more complex needs,
so we are seeing more intensive care beds than we saw in the
past," Huey says.
At the other end of the population, "Millennials want to
receive health care in a much different way than baby boomers.
They are used to having everything at their fingertips, so they
want their care to be convenient," Zorich says.
As a result, "We are seeing more neighborhood facilities, where
you can check in easily and quickly, get treated, and leave," says
Chris Prochner, a partner at JB&B.
Zorich points to the Mercy Health Systems building in St. Louis.
"It is a virtual health care model with multiple doctors in one

Health Care Construction Put in Place
Year

Change from Prior Year

2014

-5%

2015

2016

2017

2018

-1%

2019E

2020F

2021F

2022F

2023F

Source: FMI

location servicing patients all over the U.S. It is much cheaper
and more effective to build that building than an inpatient building," he says.
TODAY'S INFRASTRUCTURE,
TOMORROW'S TECHNOLOGY

The biggest factor driving the sector-and the most difficult to
plan for-is the rapid acceleration of technological development
in the health care field.
"Technology is evolving at a rapid pace," Prochner says.
"Health care institutions want to be sure the built environment
can accept that technology, so we have to align today's infrastructure projects with tomorrow's technology."
Most health care clients have their own experts tracking technological developments, but they also expect their engineering
firms to stay on top of the market.
"We have access to all the vendors' latest and greatest technological developments so we can tell our clients: 'Here is the current state, here is the trend, and here is potentially what is coming down the pipeline,'" Zorich says.
But the pace of technology and that of design and construction
schedules do not tend to match. "It is not uncommon to delay
decisions on which technology to buy and install until well into
construction," Huey says.
According to Prochner, the key is staying flexible. "We have to
design to give our clients the flexibility to adjust to technological change over the next 30 years. Even something as simple as
putting data jacks in a facility has to keep one eye on where the
technology is heading," he says.
And the pace of change is only increasing. "We have clients
who initially tell us they want the flexibility to put in another
transformer or chiller in, say, 10 years, but more often than not,
they are calling us within a year telling us they need it now,"
Koch says. ■
Gerry Donohue is ACEC's senior communications writer. He can be
reached at gdonohue@acec.org.

SPRING 2020

ENGINEERING INC.

Engineering Inc. - Spring 2020

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