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Viewpoint: Healthcare Construction
...A Stable Patient
By: Gene C. Layne, Jr., Project Manager
As the government continues to struggle with healthcare reform and cost increase control, the fact remains that healthcare continues to make up an increasing percentage of the overall U.S. gross domestic product (GDP). The Centers for Medicare and Medicaid Services estimate that expenditures grew roughly 6% last year, despite the downturn in the economy in 2009.
Specifically, healthcare’s share of the GDP is estimated to have risen from 16.2% in 2007 to 16.8% in 2008 and 18% in 2009. It is also expected by 2018 that national healthcare spending will reach a whopping $4.4 trillion and comprise one-fifth of the GDP.
Where are the Projects?
While some policy makers in Washington view the ongoing expansion of healthcare only as a threat to economic vitality, there are also real opportunities. Healthcare providers in hospitals and skilled nursing settings, along with research and private biotech firms, are generating the need for new and updated facilities. It was reported in Construction Executive magazine that between April 2008 and April 2009, healthcare construction increased 4%, at a time when total construction decreased by 11%.
The Mid-Atlantic area continues to be a hot spot for healthcare construction. There are two Biotech parks under development in the city of Baltimore; including 31 acres for the Johns Hopkins Science and Technology Park which will house 2 million square feet of space. University of Maryland Biotech Park encompasses 10 acres and will eventually offer up to 1.2 million square feet of office space within 11 buildings. Additionally, the Johns Hopkins Hospital is undertaking an expansion that costs more than $1.2 billion.
Richmond, Virginia is another city where construction professionals are witnessing a healthcare expansion boom. Hospital Corporations of America (HCA) has been awarded a COPN to construct a 97 bed hospital in Goochland County’s West Creek Park. The new facility will spawn growth in that area for support services. Bon Secours also has announced the construction of a $30 million Acute Care facility at Watkins Center. The most significant aspect of these projects is their location along the Highway 288 corridor which is considered the next growth area for the Richmond region.
Prognosis
Looking forward, the short term may not be quite as plentiful in generating opportunities for healthcare construction as both public and private funding sources have been challenged by the economic downturn. However, the next few years may present some opportunities as older buildings require upgrades and expansions of facilities are necessary to keep up with the population demand. One thing is certain, funding will be the key to healthcare construction success and that is heavily dependent on the actions our government takes.
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