Taking the Design-Build Pulse in the Healthcare Industry

In any business, at any given point in time, opportunity is where one finds it. But once found, opportunity needs to be exploited. Nowhere is this more evident than in the vast construction marketplace that is driving the economy of the United States.

With the construction industry booming, a dynamic expansion of the “renovate, rehabilitate, retrofit, and teardown” marketplace has gained significance and that provides a clear entrée for design-build practitioners who can bring economies of time and cost into an arena that is surprisingly volatile.

Perhaps nowhere is this design-build paradigm more attractive than in the healthcare industry.

R.S. Means, in a 2002 Construction Market Data survey of hospitals and outpatient clinics, found that there was a reduction of mega projects, tighter profit margins and more competition. However, the survey also showed that there was a dramatic expansion in middle-market projects in the $250,000 to $3 million range.

In fact, out of 4,540 new construction projects, the CMD data indicated that 3,152 were under $10 million, while only 93 were over $50 million. Additionally, out of 3,948 addition/alteration projects, 2,828 were under $10 million while only 51 were over $50 million. The single largest segment of the market was in the $250,000 to $3 million value range.

Design-Build in the Expanding Healthcare Marketplace

Increasingly, to address this attractive market, architectural, construction, and engineering professionals are finding that it is in their interest to educate potential healthcare clients about the benefits and economic realties of a design-build project delivery approach. As a result, high-performance design-build teams are evolving at a rapid pace, often with little fanfare and well beneath the radar. Utilizing the competitive edge that design-build offers provides a decided advantage in this highly demanding market.

With technology virtually redefining the mandatories at speeds unheard of in the past, healthcare providers are attempting to be responsive to a growing list of demands while also being responsible to their business goals. In construction projects — especially renovations, rehabilitations, and retrofits — time is critical. From the identification of the need to the delivery of services, both lives and money hang in the balance. In fact, if the design and construction isn’t efficient, the technology that drove the project in the first place can change and make the project obsolete before it opens. In Connecticut, for example, a hospital submitting a plan to the Office of Health Care Access (OHCA) for a facility to administer open heart surgery must allow for a requirement to submit a calendar of events and pro forma patient numbers for a three year period. The more efficiently construction can be completed, the quicker the facility can open, the sooner patients can be served, and the earlier estimates that justified the project in the first place reached.

With a growing population, improvements in medicine, and the vast changes in the healthcare facilities and healthcare management, the capacities of our hospitals and other healthcare facilities are stretched to the limit. The National Survey of Planned Capital Purchases: Financing the Future, May 2004, by the Healthcare Financial Management Association (HFMA), revealed key priorities among surveyed healthcare providers. Key commitments over the next five years include those listed on the table below.

According to HFMA’s Financing the Future survey, eight of the top 13 planned capital purchases over the next five years relate to increasing capacities, with 23 percent of CFOs surveyed saying their organizations plan to construct a new hospital.

It stands to reason that healthcare executives, faced with the expanding needs list of anticipated construction projects, need a clear understanding of the delivery method for their construction projects that will provide the best results, in the best timeframe, at the best cost. As a result, healthcare decision-makers are educating themselves and evaluating the advantages available in the design-build universe.

Design Drives Considerations for the Operating Room of the Future

One area where the healthcare industry is seeing technology collide with need is in the operating room (OR). Increasingly, healthcare providers are faced with an increased reliance on both biomedical and information technologies within the surgical suite. These advances in medicine also have an impact on the architectural and engineering design of the operating rooms of the future, as well as on subsequent planning for equipment, infrastructure, and applications.

With advances being made in high-tech, specialty surgeries like cardiology, neurology and orthopedics, there is a growing trend in the development of universal operating rooms that provide facilities compatible with current technologies. The challenge for OR architects and designers is to create just the right amount of flexible operating room capacity needed and, at the same time, be able to adapt readily to emerging technologies as they become available.

For example, the use of retractable, ceiling-mounted booms and docking stations to organize technology and utilities efficiently and maximize floor space will become common in the ORs of the future. With advances in technology that enables “virtual” endoscopy and colonoscopy, advances in robotics, and mobile services in such areas as ultrasound, the design must not only accommodate change, it must anticipate it. Design-build, with its reliance on client involvement from the beginning, is uniquely capable of providing this, and more.

It All Starts with Teamwork

Using the OR as an example illustrates how the fundamental tenets of design-build can quickly move from the theoretical to the practical. The name of the game is creating a team that can deliver the goods. That is accomplished by establishing a single-source provider who is skilled in assembling the team and providing each member with the information, the incentive and a clear sense of the capabilities needed to complete the task.

Once a healthcare facility has designated the OR or the emergency department (ED) as priorities, a clear definition of the needs must be arrived at by all parts of the team — beginning with the surgical staff that will actually use the facility. Their involvement in the design process from the outset ensures that such areas as patient flow issues, room layouts, staff access, and storage requirements are laid out in such a way that the maximum number of patients can be safely treated using the minimum amount of resources.

The design-build team utilizes that crucial information in the selection of the specialty contractors so essential to the project. The owner of the project, the healthcare facility administrator, receives benefits across the board from the early involvement of users and specialty providers.

Specialty contractors that represent building systems with significant engineering content, such as heating, ventilating, and air conditioning (HVAC), plumbing, fire protection, and electrical (security, power distribution, lighting, telecommunications) have an opportunity to act as specialty design-build contractors within the larger context of the design-build contract. This gives the design-build general contractor (or if the project is designer-led, the lead design-build engineer/architect) a single seamless source of responsibility for major building systems covered by a single set of design criteria and performance requirements, thereby reducing its risk.

Trade subcontractors and their craft employees can make meaningful contributions to the design-build process by bringing their practical field experience and suggestions to the attention of the designers during the design development stage. The design-build project delivery method is the procedure that facilitates and encourages one end of the process — design — to learn from the other end of the process — field construction.

An interesting example of the benefits of this synergy was the challenge of Hartford Hospital, in 1999, to move their Budget, Finance, and Telecommunications Center from Hartford to their Newington Campus into a 30,000 s.f. unused hospital wing. THIBAULT’S selection of Tucker Mechanical, an EMCOR Group company, right from the outset, proved remarkably effective.

Tucker priced alterations and modifications to the existing HVAC, plumbing and fire protection (relocating sprinkler heads as required) but site investigation to determine asset condition was limited because of and prior to asbestos abatement. After abatement and review of older existing systems Tucker, experienced in life cycle management, indicated that they would prefer to install all new systems, including concealed sprinkler heads, at no additional cost. So, rather than reworking the old systems, experience and early planning enabled Tucker to employ a design-build solution and far exceeded expectations, while sticking to the original budget.

Six years later, the strategy has been vindicated. William J. Kennedy, Director of Corporate Real Estate for Hartford Hospital, has recently remarked on the durability and quality of the finishes, even after six years. He has noted, moreover, the MEP systems continue to be highly reliable.

Constructing the Right Team

Advantages to the clients begin with the assembly of the right team for the job, and putting the components of the team together early pay instant dividends — to everyone involved — because of the benefits of the knowledge and experience each member brings to the whole. For the most effective and efficient design-build teams, the foundation of the relationship is built upon three basic but critical elements: cooperation, trust, and respect.

A subtle but compelling advantage of design-build is its flexibility. For example, design and construction practitioners have only recently recognized the enormous contributions that major MEP specialty contractors provide to the overall success of projects. By overcoming the traditional vertical hierarchy that places designers and prime/general contractors at the top and views specialty subcontractors as a commodity, economies of time and expense can be realized by enabling the specialty contractor to furnish design services and provide early design input that are critical to the overall success of the project.

With the single-source design-build method selected, an owner enjoys the ability to select and review everything from the architect to the job site cleanup crew, though there is seldom a need to spend valuable time cross-checking, as the design-build team has assumed key risk and responsibility over the course of the project. The design-build project is attractive to a specialty contractor for a host of reasons, not the least of which is the ability to have the project delivery system negotiated to assure that the right services are being delivered at the right cost.

Who’s In Charge Here?

The more demanding the business, the more project owners need to pay particular attention to all aspects of the planning and construction — to ensure that cost controls are adhered to and that project timing is paramount. That means instead of “market-driven” concerns being prevalent, the new model is for “owner-driven” solutions to be employed.

Instead of turning responsibility for a project over to a group of disparate professionals and then waiting until a consensus has been arrived at among the architect, general contractor, office planner, and field supervisor, the design-build single-source solution delivers efficiencies for the healthcare company from day one.

Rather than focusing on project control to assure that there is a clear route to assigning blame should something go awry, the design-build model best suited to healthcare projects puts together a single-source team that focuses on integrated project delivery, assigning proper risk and responsibility.

When Unimation, the industrial Robotics Division of Westinghouse needed to add an “approximately” 10,000 s.f. addition — clear span with no columns — they provided preliminary parameters, including a suggested layout. Unfortunately, the addition adjoined an inland wetlands pond and required an additional lengthy review prior to paving the parking lot. Using a design-build approach, THIBAULT was able to set aside the resolution of parking lot paving and secure the balance of permits needed to proceed with the building.

The initial structural engineering plan called for a 10,600 s.f. building that would require special beams. Through investigation and cooperation, THIBAULT’S design-build group was able to adjust the plans to standard sizes and provide a 9,800 s.f. building — well within the “approximately 10,000 s.f.” parameters, and saved the client $135,000 in the process. The parking issue, which could have held up the process, was resolved later.

The differences are dramatic and measurable. THIBAULT Corporation, for example, spends considerable time and energy benchmarking project success so the team can learn valuable lessons from each engagement. Managing all stages of a project, from design to completion, always keeps the client’s goals in the forefront.

Designed for Success from the Start

All businesses benefit from direct channels of communication. In the healthcare industry, with the growing number of demands that must be faced and conquered, communication is a cornerstone to success that must be included in any construction project.

Employing the design-build approach ensures that the project owner has a clear line of communication to count on and a fast and effective means to affect the collaboration that must exist in order for the final product to be delivered on the agreed-to time schedule and without cost overruns. Because design-build concentrates on preparing a clear path of responsibility for a project — from design to delivery — the focus is on simplifying the process. The client deals directly with the single-source provider and is made aware of each relevant element as the project proceeds. And, as always, speed is of the essence.

There has never been a time when the cost of preparing fast, accurate and detailed estimates has been more affordable. The reason: sophisticated databases and the speed of computerized calculating and printing, with the input of experienced construction people who provide and purchase construction services on a daily basis. An integrated approach utilizes the power of the computer, with the effective use of people skills and knowledge of local market conditions, to produce estimates in less time. A seasoned team can break down a job to a more detailed level at an earlier stage, resulting in better cost control. The team can test “what if” scenarios (cost reductions) with comparative ease.

The net result is that rather than spending time and energy assigning blame for things that have gone wrong, a design-build practitioner instead seeks ways to streamline the process even more, to deliver a project sooner.

Where Do We Go from Here?

By necessity, the demands of project owners are increasing as costs skyrocket and time constraints shrink. In healthcare, those realities are viewed in light of the increasing demands to provide quality healthcare services at a competitive price. Every day, the puzzle of how to accomplish this becomes more difficult.

As a long-time proponent of design-build, even back to when each project started with a “feasibility study,” I’ve come to the conclusion that the best way to introduce someone to the advantages of design-build is to demonstrate its simplicity and effectiveness in terms they can easily understand. We’re experimenting with a clear, concise list of the foundation of design-build, including: educate, communicate, collaborate, authenticate, operate, and substantiate. If we can accomplish all of those things — and we can and do — we can design and build a successful project, no matter the size. But it is an ideal method for the $250,000 to $3 million market, which is where many, if not most, healthcare projects are found.

Chris Burney, currently Director of Engineering at Hartford Hospital, is not of our industry but is aware of our design-build success record. He said the other day that we should approach a prospect with the simple question, “Design-build: what do you have to lose?” And then he answered his own question by saying “headaches, cost overruns, change orders, delayed occupancy, red tape, redundancy, and litigation.” If it were only that easy!

On a middle-market renovation project, there is hardly anything that makes sense, comparatively speaking, other than design-build. Most owners, designers, and constructors have been involved in one way or another, in elements of design-build type high-tech renovation or retrofit projects, even if they have not necessarily termed them as such. Preference for a specific design team, contractor or specialty subcontractors (usually HVAC and electric) has made the assembly of the “team” happen at the earliest point in time, to take advantage of their experience and input. Many are reluctant to call it “design-build” because that would seem akin to changing their religion, or touching the third rail.

 Yet there is tremendous acceptance of the benefits of early team assembly and the growing level of design-build activity in the marketplace. Persuasive logic and “herd instinct” will encourage owners and their representatives to overcome the “guinea pig” syndrome, and persuade them to cross the thin line between them and trying a modest design-build project.