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June 25, 2020
Future In Focus
Future in Focus
 

"The healthcare industry has served as a model for others to follow through strategies that create healthy environments, like Evidence Based Design. Healthcare employees, processes and facilities have been greatly impacted by COVID-19 -- and eventually everyone will once again turn to healthcare to see what they do."  – Susan Heinking, Vice President, High Performance and Sustainable Construction

Over the past few months, we've worked with clients on spaces critical to their operations, while other work was placed on hold. Right now, there seem to be more questions than answers. Will there be a W-shaped recovery, or second wave, or have we already seen the worst? When it comes to their projects, healthcare providers are closely monitoring the situation as it unfolds, and systems are beginning to talk about fundamental changes they expect to make to be pandemic-ready.

Current healthcare construction outlook

Looking ahead, many architects and industry organizations are talking about how the pandemic will re-shape the future of healthcare. Do hospitals need to offer all services in all locations? Will there be more healthcare system consolidations, or will more services move closer to patients? At the top of the list is the need for more flexibility in their facilities to adapt quickly to different needs as they arise. 

What about the immediate forecast? Based on our own pipeline and conversations with clients and industry partners, here's what we're seeing in the Midwest:

  • Medical-Office-visit
    Healthcare providers are re-thinking the design of MOBs after COVID-19.
    We expect to see better numbers than national averages, with a drop of approximately 15-20% in healthcare starts across the Midwest in 2020, followed in 2021 by a 40% increase over 2020.
  • Architects are finishing work that was already in design pre-COVID-19, but we're hearing new projects have slowed significantly.
  • Healthcare providers that were in good financial position before the pandemic are choosing to proceed with priority projects, with little or no change to designs.
  • Some renovations could be delayed as hospitals increase the number of elective procedures to catch up with pent up demand; they can't afford to give up the space right now. They may also decide to extend projects over multiple years to spread the cost.
  • Major projects that were in programming or early design have paused as healthcare providers reconsider designs. For new construction, they're exploring what they can do to be prepared for the next pandemic or disruptive event.
  • Projects such as Medical Office Buildings (MOBs) have been delayed, as owners redesign the spaces to fit a new way of working, with services like Telehealth, which are expected to become more standard. Telehealth could also affect where physical space is constructed by consolidating more services in the major hospitals, resulting in less space needed for office visits.
  • When it comes to construction, we're seeing this service impact MOB designs by incorporating private work rooms for physicians to facilitate calls.
  • Clients are not in a hurry. They're taking a step back and regrouping. The new timeline for projects moving forward is two years out.

The cost of healthcare construction

So far, our teams have not seen significant changes in pricing, with the past quarter reflecting work that was already in progress. We expect to gain a better idea of where the market is headed in the next three to six months.


Materials and Supply Chain

Supply Chain
One of the most significant impacts we've seen since the start of 2020 is on our supply chains. We are seeing longer lead times, and some materials are unavailable. For example, due to shutdowns, today we're unable to get specialty tile from Italy. Locally, there have been issues with receiving casework because the mills were shut down. To head off potential issues early, during preconstruction our teams are looking at where materials originate and working concertedly with architects and domestic manufacturers to ensure delivery.
   

Manpower

Manpower
Manpower has remained constant. As we start to approach more normal levels of construction activities, with jobs that continued and those that were postponed coming back, we could experience manpower shortages again, like we did before the pandemic. The shortage could be compounded if those who have been unemployed elect to not return to the labor force.
   

Competition

The trade activity is a tale of two stories. Specifically, with MEP trades we're starting to see more interest, with 8-10 bidders. However, there is still a good spread in price, which indicates some companies are looking for work due to delayed and canceled work, while others still have a healthy backlog. This situation is not equal across all trades though; prices have remained consistent across most trades.

Aside from these factors, we anticipate the cost of some spaces, specifically, technically-complex spaces like operating rooms, will likely increase slightly due to inflation and additional mechanical requirements. Consequently, the healthcare systems that historically incorporated the minimum requirements in their initial budgets have the potential to see the biggest cost swing.

Right now, there is a premium to add Ultraviolet lights (UV) in ductwork to help sanitize the air, and as its use becomes more common, we expect the costs to come down, similar to what we saw with LED lighting. Recently, we priced the addition of UV lights in an outpatient building at $2,000 per rooftop unit.

In a different scenario, for hospitals that are considering significant programming changes, like adding operating rooms inside an MOB, the cost per square foot of an MOB would increase significantly.

Bringing the future of healthcare construction into focus

"We're not biologists, but it is becoming more important that the design and construction community understands microbiology and how systems and materials work together in a healthcare setting," shares Heinking.  

Evidence Based Design and High Performance features are expected to become even more important, with an emphasis on how air quality, density and materials work together. Consideration will be given to the following:

  • Windows-in-hospital
    Daylight is an important feature in healing environments.
    Infection Control measures
  • Ability to adapt a space for negative air
  • Daylight for exposure to Vitamin D
  • Sensors for operating doors, fixtures, etc.
  • Density and increased outdoor air - 30 cubic feet per person
  • Humidity levels kept between 40% to 60%
  • Verification of ventilation performance with real-time monitoring of CO2
  • Ductwork that incorporates MERV 13, HEPA filters and UV lights

Many providers have already taken extra measures. In addition to planning for surge capacity, what else can you do to prepare your buildings for the next event?

  • Consider a certification that fits your business model; all include health considerations that support a pandemic-ready initiative. Going through the certification process allows you to prove out the measures that are in place through a third party.
sustainable-building-logos
  • Explore streamlining your facility management process by conducting a Facility Condition Assessment. This will allow you to document current conditions, target the activities that need to be addressed first and appropriately budget for specific needs.

 

  • Partner with an MEP contractor to help evaluate your MEP systems. There is a lot of discussion about incorporating UV lights and making changes to mechanical systems. Your contractor can help interpret how design changes could affect the systems' performance and the solution that is right for your building.
Filters+UVLight

 

  • Reference a healthy materials database, like Mindful MATERIALS, to explore alternative, healthier options, like antibacterial coatings.
mM-label
The Mindful MATERIALS database promotes transparency and a healthier environment.

 

Finding efficiencies through Lean Construction

Director of Continuous Improvement Heather Siemers has spent most of her 20-year career working in healthcare environments, first in project management, then quality management, before transitioning to her current role. She believes the future of healthcare construction can be greatly improved through Lean Construction, but it will require commitment by the owner.

These Guiding Principles were created to guide the team on an OR renovation project.

"When the owner makes Lean a priority, it results in a higher level of adoption by the rest of the project team." But Siemers concedes it takes a lot of work. "The most committed clients struggle with helping facilitate the process. It takes time, and right now they're already maxed out."

With strained resources, where should owners spend their time to make the biggest difference?

Siemers suggests the following to start: "When defining the True North and establishing the Guiding Principles at the beginning of the project, challenge user groups to think about what they would need if something were to happen again. By identifying that need as one of the project values, the team will make a concerted effort to incorporate it into every process and decision. So, for example, if the space needs to be adaptable, that value should inform the Target Value Design process, so the budget includes those design elements that make it adaptable."

Leveraging technology to advance the work

Technology can help hospitals prepare now for future work. Jennifer Suerth, vice president of technical services in Illinois and Wisconsin, suggests while the census is down, hospitals should consider capturing existing conditions with laser scanning and drones. That way, when renovations are ready to start, they'll have the data that can otherwise be challenging to access when occupied.

When hospital census is down, it's a good time to capture existing conditions for future work.

Technology has also found efficiencies for work in progress. For example, on a recent operating room project in Indiana, a virtual mock-up allowed the project to proceed when the planned physical mock-up was going to delay it. Virtual mock-ups are becoming more broadly used because they help facilitate the review process with doctors and nurses, whose feedback is critical but whose time is very limited. Additionally, since every detail (soap dispensers, outlets, equipment, etc.) is shown to scale in the virtual model, staff can see how the design could impact a patient – and even move the equipment to test the space. In addition to these benefits, our clients also realize cost savings. Virtual mock-ups have become more valuable now with COVID-19.

In Illinois we found ourselves limited in the number of people who could walk through the hospital space on a bid walk. The solution: One person walked through the space with a 360-degree camera. He attached the photos to the floorplan for our team to tag with comments for everyone to see. The 360 photos gave everyone the same vantage point and created a conversation. This practice has since been used for bid walks on other projects.

Structionsite dashboard
Structionsite allows for virtual collaboration.

What's next in healthcare construction

Director of Virtual Construction Mike Alder has applied technology solutions on more than $2 billion in healthcare construction in Indiana, and he has worked in all types of healthcare spaces. In January, Alder attended a conference, where he observed Autodesk CFD, which is used by engineers to map how air flows through a space. With Pepper's focus on high performance and healthy solutions, he saw an opportunity to apply it to the construction process.

"I thought if we could create a visual of people in the space and the air flow around them, maybe it could help clients make decisions from a well-being perspective – for both patients and staff." -- Mike Alder, Director of Virtual Construction

AutodeskCFD
Technology like Autodesk CFD allows us to see air flow, which presents opportunities to improve design and installations for infection control in healthcare settings.

Alder worked with Autodesk to test it on a hospital project. After reviewing the visuals of the simulation, our quality team saw even more potential. If we could simulate the air flow through the ductwork before it gets to the space -- and not as designed but as it was installed -- we could understand how potential field changes impact air flow.

Indiana's Director of Quality Management Ben Dykstra helps project teams plan the construction details through pre-installation coordination meetings. "Our role is to plan and coordinate the work so it is installed correctly. Sometimes that means making modifications to the design to improve how it is constructed, which is why we include the engineer in the process. A platform like this would allow us to verify the changes we want to make in advance – and to test them in a virtual environment."

The application is still being evaluated after our initial trial. As our team considers how we help clients visualize the performance of their space, the potential for this idea became more relevant with COVID-19.

Heinking is already thinking ahead: "When I heard about the solution, I thought about the next evolution and the ability to model particulate matter based on different types of filters, to visually see what's in the air and how it's flowing through the space and exiting. It could be used for design decisions and to prove the system's performance."

The pandemic has underscored the need for healthier spaces. Dykstra and Heinking agree the future of healthcare construction is about understanding the relationships between systems and materials and how they can be designed to create healthier environments. It's not a task that should be left to architects and engineers alone, but a commitment that should be shared by those installing the work as well.

We don't have all of the solutions today, nor can we predict what will be needed in the future. But we believe it will take new solutions like this to ensure healthcare systems avoid becoming overwhelmed when creating healthier environments that, in turn, allow for a higher level of care.


This blog post is part of the Future In Focus series, which analyzes the decision to proceed, as well as the creativity and tools to wisely manage your project. Experts from across the company are weighing in so you can start to sort through all the unknowns and make the most informed decisions possible. We encourage you to subscribe to our newsletter to receive updates.

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About the Authors

Mike-Alder

Mike Alder, CM-BIMDirector of Virtual Construction, Indiana

Mike is one of Purdue University’s first computer graphics technology graduates with a focus in Building Information Modeling. He has used virtual construction technology on more than $1.7 billion in construction in a variety of markets, including healthcare, higher education, industrial, commercial and retail. He is a frequent speaker at industry events, including Autodesk University, the CFTA Conference and Lean Construction Institute, and is a member of Revit Users Group Indy. In April, Mike was honored among four alumni with the Early Career Award from Purdue Polytechnic Institute, which recognized individuals' efforts to harness the power of their degree to positively impact their chosen profession, as well as how today’s technology will improve the world tomorrow.  Mike holds a Bachelor of Science degree from Purdue University Polytechnic Institute, formerly the College of Technology.

Ben Dykstra

Ben Dykstra, RRO, REWO, CQM, LEED® AP BD+CDirector of Quality Management, Indiana

Ben Dykstra is director of quality management for Pepper Construction in Indiana. He started his career in project management before transitioning to quality management in 2012, where his passion and commitment to quality extends beyond the planning and execution of the work to the overall functionality and performance of a building throughout its life cycle.

Ben holds a Bachelor of Arts in Engineering from Wheaton College and a Bachelor of Science in Civil Engineering from Illinois Institute of Technology.  He is a Registered Roof Observer (RRO), Registered Exterior Wall Observer (REWO), a Certified Level 1 Thermographer, and Army Corp. of Engineers Construction Quality Management (CQM) certified.  Ben also is a member of RCI, Inc. and is a Major in the Indiana Army National Guard.

Brian-Forsythe

Brian Forsythe, CHC, LEED® AP Vice President, Project Director, Illinois

Brian has more than 20 years of experience, and during most of his career he has specialized in healthcare construction. His experience covers all areas of a hospital, from medical offices to operating and emergency departments – totaling 60 projects and $292 million, across 10 different healthcare campuses in the Chicagoland area. As project director, Brian leads project teams from preconstruction through project completion, ensuring the highest level of safety and quality are maintained.

Brian received his Master of Business Administration and his Bachelor of Science in Construction from Bradley University. He is an American Hospital Association Certified Healthcare Constructor (AHA-CHC), a LEED AP, is 30-hour OSHA certified and holds an ASHE Healthcare Construction certificate. He is a memeber of Lean Construction Institute (LCI) and the American College of Healthcare Executives, in addition to teaching classes for Pepper employees and volunteering at his church.

SusanHeinking

Susan Heinking, AIA, NCARB, LEED FellowVice President, High Performance and Sustainable Construction

A licensed architect and LEED Fellow, Susan has over a  decade of experience designing and managing sustainability programs and initiatives in the building industry. She leads Pepper's High Performance and Sustainable Construction Group. She is a national expert in sustainable building design and construction. Her many areas of involvement include Chicago's Energy Benchmarking Ordinance, the AIA2030 Chicago Working Group, co-chairing Chicago's AIA COTE knowledge group, participating in RETROFIT Chicago and working with the Chicago Biomimicry Group. Susan has been named to both ENR and BD+C's 20 under 40 list.

Susan's current vision for Pepper includes expanding the company's sustainability efforts to fully embrace the high performance aspects of both building performance and human performance. This includes enhancing existing efforts with energy modeling, ROI analysis and local utility incentives, as well as building on Pepper's "Nothing Hits the Floor" program and promoting the use of healthy materials.

Susan holds a Master of Architecture from the University of Oregon and is an active presenter at industry conventions.

Read more about Susan's accomplishments.

Dan-Lowe

Dan Lowe Vice President, Indiana

An 18-year industry veteran, Dan joined Pepper Construction 14 years ago. Since then his career has focused on complex healthcare construction. He has served in a leadership capacity on many of Pepper’s most prominent healthcare projects and is known for establishing a collaborative environment that fosters creative solutions to project challenges.

Dan holds a Bachelor of Science in Construction Science and Management from Kansas State University and is a member of the American Society for Healthcare Engineering (ASHE) and American Hospital Association.

Jerry Noble

Jerry NobleVice President and Regional Director, Cincinnati

With two decades of experience and an extensive healthcare background, Jerry has led projects for Cincinnati Children's Hospital Medical Center, St. Elizabeth Healthcare and UC Health. As Vice President and Regional Director, Jerry leads Pepper’s operations in the Cincinnati area. He works closely with Pepper’s local, experienced project teams to provide oversight on preconstruction and construction activities. Recognized as a thought leader in design assist projects, Jerry's passion is to help owners achieve their goals and optimize the project budget.

Jerry received his bachelors of science in Architectural Engineering Technology from the University of Cincinnati (UC) and holds an associate's degree from UC in Construction Management.  A Cincinnati native and who enjoys giving back to his local community, Jerry currently serves as a board member for ArtWorks Cincinnati, a non-profit organization that employs and trains local youth to create art and community impact. Jerry also invests his time with the Ronald McDonald House Charities, the American Heart Association’s HeartChase, and is a Boy Scout Troop Scout Master in New Richmond, Ohio. 
 

 

Rich-Schuster

Rich Schuster, CHC, LEED® APSenior Vice President, Illinois

As senior vice president, Rich specializes in the healthcare market in Chicago and the surrounding areas. He leverages more than 30 years of experience to partner with clients and help the entire team collaboratively navigate projects from preconstruction through turnover. In addition to the healthcare market, Rich lends executive guidance to Pepper's integrated construction services. He holds a Bachelor of Science in Civil Engineering from the University of Illinois, is an American Hospital Association Certified Healthcare Constructor (AHA-CHC), LEED AP and holds a certificate in both ASHE Healthcare Construction and ASHE The Next Generation of Infection Control. 

Heather Siemers

Heather Siemers, CQMOperations Improvement Leader, Indiana

Heather Siemers began her career in project management and quality management, before being promoted to the position of operations improvement leader, where she oversees Pepper Indiana’s lean program. While serving as director of quality management, she became an advocate for lean construction, integrating the lean principals into the quality program and championing team education and training. Heather is Army Corps of Engineers Construction Quality Management (CQM) certified. She earned her Bachelor of Science in Building Construction Management from Purdue University, and she holds an ASHE Healthcare Construction certificate.

Heather's industry involvement includes serving as Vice Chair for the Core Group of the Lean Construction Institute (LCI) Central Indiana Communities of Practice group, where she has spoken about Lean Thinking & Technology. She serves on the steering committee for the Wabash Valley Lean Network, is a council member of the Top Notch Lafayette advisory board and serves on the board of Rebuilding Together Indianapolis. Heather is involved with the ACIG peer groups for lean and quality and with the Associated General Contractors (AGC). She is also involved with Purdue's Building Construction Management (CM) program, where she has served as a guest lecturer and advisor.

 

Jen-Suerth

Jennifer Suerth, LEED® APVice President of Technical Services, Illinois & Wisconsin

As vice president of technical services, Jen provides strategic direction for the company with regard to BIM, laser scanning, augmented reality and other technical services specialties. She serves as a key advisor to project teams on constructability and implementation strategies throughout the early stages of project design and development, as well as providing leadership on construction, fabrication and facility management.

Jen has more than 12 years of experience in architecture, engineering and construction. She is a leader in the Chicago virtual construction community, speaking frequently and running workshops educating others on BIM. She has been recognized among 2016 Women in Construction by Constructech Magazine, Chicago Building Congress Future Leaders and ENR Midwest’s Top 20 Under 40. Jen holds a Bachelor of Science in Architectural Studies and a Master of Architecture, Structures, both from University of Illinois at Urbana-Champaign.

Read more about Jen.