29 Mar 2018

What’s driving healthcare renovation and construction trends?

From legislative impact to patient satisfaction to increasing market share, Rimkus Building Consultants joins industry conversation on issues most critical to healthcare facilities.

Note: This post is the first in a series that will explore healthcare construction and renovation trends.

With the healthcare climate in a near constant state of change and the patient experience reaching new heights, hospital systems across the U.S. are examining ways to stay competitive in the market while keeping budgets under control.

Alongside CBRE, Rimkus Building Consultants recently had the opportunity to speak with a leading healthcare publication, Healthcare Facilities Today, about construction and renovation trends that are keeping hospital administrators up at night as they navigate the unpredictable landscape.

According to the American Institute of Architects, there were more than 15,000 healthcare construction projects underway in the U.S. at the end of 2017, with an expected 3.5 percent growth in healthcare spending in 2018.

Jack Dolan, president of Rimkus Building Consultants, stated that many capital expenditures are focused on maintaining or increasing market share. If hospitals improve patient care in a way that is recognized by the public, or if a state-of-the-art operating room will attract first-class doctors, those projects will be funded.

The exception to this is the small rural hospitals that don’t really have competition but instead need to stay current with codes and regulations. A high post-op infection rate may necessitate remodeling the operating room. Additionally, capital budgets are driven by competition or the need to maintain an acceptable level of service. According to Health Facilities Management, patient satisfaction is an 86 percent driving factor in facility design once a project has been funded.

So why are healthcare systems renovating rather than building?

“Because there are so many existing facilities, there will always be more renovation projects than new construction projects in raw numbers,” Dolan tells Healthcare Facilities Today. Of note, 75 percent of all projects in 2016 were renovations.

However, in dollars, the renovation projects are about 60 percent of all expenditures. The single biggest problem faced by hospitals in allocating capital funds is to be sure they get the most out of each dollar spent. An example is a rural hospital in Washington that tried to cut costs by doing a remodel with only a design build contractor. The problem with this is that no one is looking out for the owners’ best interest. In this case, the system installed did not meet code. An owners’ advocate would have prevented this problem and saved money and time. 

Click here to read the full article from Healthcare Facilities Today and stay tuned to our News page for upcoming posts that will further explore trends in healthcare. In our next post, we will discuss the top five renovation features to consider for healthcare systems.