Construction companies expect strong activity for health care projects to continue in 2019, according to a recent AGC survey Construction companies expect strong activity for health care projects to continue in 2019, according to a recent AGC survey MiBiz File Photo

Health care construction remains steady amid hospital consolidation, technology updates

BY Sunday, March 03, 2019 09:36pm

To help make Bronson South Haven Hospital more efficient, the owners are planning to shrink the facility’s footprint as part of a compact, contemporary health village design.

Kalamazoo-based Bronson Healthcare, which acquired the former South Haven Health System in 2017, tapped Elzinga & Volkers Inc. to lead the $22 million project, which exemplifies a shift away from the inefficient designs of the past.

“South Haven has a very similar challenge to many smaller communities that are trying to sustain a full-service hospital,” said John Parker, vice president of project development at Elzinga & Volkers. “As they merge with larger health care systems, they’re able to leverage the efficiency of the larger health care facilities in the more metro areas. What they’re left with are those bigger, inefficient hospitals in those small communities.”

Elzinga & Volkers is developing a more efficient, compact health village at 955 S. Bailey Ave., at the south end of the hospital’s existing campus in South Haven. The project is currently in the design phase with construction slated to begin in the fall.

The hospital’s new owners opted to downsize the number of beds at the new facility and stop offering surgical procedures, instead focusing on primary care, wellness, disease management and the most commonly used medical services.

Parker sees the project as an example of how consolidation in the health care industry helps local operations focus on operating sustainably.

The new facility in South Haven will replace an original hospital that has parts dating back to 1941.

Aside from the South Haven project, which will result in the construction of an entirely new hospital, and a $291 million expansion and renovation of Mercy Health’s Muskegon hospital campus, construction firms are not seeing as much work on major hospital expansions going forward, at least in the local market, Parker said. Instead, health systems are planning smaller projects to maximize the use of their facilities or bring certain types of care closer to users.

“There has definitely been an uptick in new medical office construction as consolidation continues,” Parker said. “Health care systems are consolidating physician practices and providing more up-to-date facilities for those groups that they merge together.”

In South Haven, the new health village also includes a Bronson Wellness Center, which provides nutrition, fitness and rehab, and a Bronson FastCare clinic that offers walk-in care for minor health conditions.

The clinics have become a major focus of health care providers’ investments in recent years. According to Parker, the increased focus on clinics help health systems provide facilities that can react to a range of needs all in one location.

“We built several facilities for all the large health care systems in the area where they’re delivering multiple different kinds of care, different specialists under one roof,” he said.

As MiBiz reported last month, Mercy Health said it plans to invest at least $30 million in new outpatient centers around West Michigan.

The investments are in addition to two Mercy Health clinics in North Muskegon and Hudsonville that Walker-based Triangle Associates Inc. recently finished. The projects, which cost a combined $20 million, adopted similar medical office building designs that offer primary care exam rooms, urgent care rooms, X-ray, blood draw and drive-through pharmacies.

Triangle also is beginning work on another project in Walker, involving the conversion of a former University of Phoenix building the firm built years ago. The new plans call for office space for administrative support staff at Mercy Health and parent company Trinity Health.

According to a September 2018 report from Transwestern, a national real estate firm based in Houston, the growing population of seniors nationwide is creating more need for medical office space. The total demand for medical office space across the U.S. could range from 150.5 million square feet to 225.8 million square feet by 2019, the report stated.

Jim Conner, senior vice president at Triangle, is expecting a good year in health care development. The firm intends to compete for several health care related projects in the near future.

“I think it’s just a steady market. You’re going to see a lot of updating, retooling, revamping, modernizing,” Conner said. “I think (medical centers) are just trying to be more efficient.”

Upgrading facilities

As medical technology continues to advance and patients have more choice in where to get their care, hospitals and other medical users are having to invest in upgrading their facilities.

“We’re constantly upgrading to react to the market’s desire to have newer facilities and emerging technology,” Parker said. “It’s a huge driver.”

The adoption of technology has provided firms including Triangle and Elzinga & Volkers with steady work in health care development, and a 2019 survey of 42 Michigan firms by the Associated General Contractors of America suggests a continued period of growth in the market.

Of the respondents to the survey, 42 percent expected to compete for more hospital projects this year, while 58 percent expected to have the same amount of work in the sector. None of the respondents expected hospital work would decrease from last year.

At Elzinga & Volkers, the firm continues to stay active with work in the health care sector. That includes an $8.2 million renovation of Mercy Health Saint Mary’s birthing unit in Grand Rapids. The firm also is continuing work on Holland Hospital’s Boven Birth Center, an $11.3 million renovation that includes post-partum rooms, triage rooms, labor and delivery rooms, an operating room and support space.

“(With) birthing centers in particular, hospitals are upgrading because it is a place where patients have a choice where they can have their children,” he said.

Read 5674 times Last modified on Sunday, 03 March 2019 21:51