Tag Archive for: health care construction

Florida Hospitals: Building Boom

silhouette of construction site_canstockphoto22793086 760x320

In 2021, Alabama construction firm Robins & Morton opened an office in Tampa, its third in Florida, to serve the growing demand for hospital construction here. The firm had seen requests for proposals triple from 2019 to 2020. The company’s health care revenue from Florida grew 30% in a four-year span.

Credit the gains to a substantial trimming of Florida’s certificate of need requirement in 2019. The action has produced a surge in health care construction around Florida.

“Since (the) Florida Legislature repealed part of the certificate of need law several years ago, we have seen increased demand for health care construction across the state, especially in acute care and specialty care facilities,” says Derek Gregg, a Robins & Morton vice president based in the firm’s Orlando office.

The certificate of need process required hospitals, home health care agencies and other providers to demonstrate that a new facility or service was needed and wouldn’t take business from existing players.

In Florida and other states, the law dated to the 1970s once the federal government made a certificate of need program a condition of receiving federal funding. The idea was to contain health care costs by preventing unneeded equipment and facilities. Guaranteeing existing players a market — they could object to a competitor’s application to expand — also was intended to subsidize indigent care.

Congress repealed the mandate in 1986, but certificate of need — much loved by entrenched providers — lived on in Florida and other states. That changed over time. A U.S. Federal Trade Commission study found certificates of need generally didn’t contain costs. Benefits provided were outweighed by the anti-competitive costs.

Florida got rid of certificates of need for home health agencies in 2000. In 10 years, the number of agencies doubled. Repeal of the requirement on other health care services followed. Then in 2019, the Legislature abandoned certificate of need for hospitals.

In the four years up to that point, the dollar value of hospital construction in Florida was $5 billion, according to data from Richard Branch, chief economist for the Bedford, Mass.-based Dodge Construction Network. In the four years following the repeal, the total reached $6.5 billion.

Health care systems expanded to gain market share in their regions and new regions of the state while out-of-state players planted flags here. A larger geographic footprint gives systems more leverage in negotiations with insurers. Where they located came down to “where the money is,” says Steven Ullmann, a professor in the Department of Health Management and Policy at the Miami Herbert Business School at the University of Miami. Thus, Palm Beach County has seen entrants from Broward, Miami-Dade, the northeast U.S. and Tampa while the surge bypassed rural and low-income markets.

From 2020 to 2022, healthcare companies announced at least 65 new hospitals in Florida, KFF HealthNews reported last year, up from 20 new ones from 2016 to 2018.

The dollar value of Florida hospital construction peaked in 2020 at $1.8 billion, more than double the annual figure from 2016, according to Dodge. Since then, new construction has remained above pre-repeal levels but has ebbed and flowed. Robins & Morton reports that the number of requests for proposals it’s receiving has stabilized.

The University of Miami’s Ullmann says that’s to be expected. “There’s only so much market out there.”

Even so, hot pockets of hospital development remain. In Plant City in eastern Hillsborough County, BayCare Health Care is replacing a 71-year-old hospital that has run out of room to expand any further. Since opening in 1953, the old South Florida Baptist Hospital has been expanded or renovated a dozen times, but it has maxed out its property and the Plant City area’s population keeps growing. So BayCare is building an entirely new South Florida Baptist Hospital that’s 68% bigger four miles away.

BayCare, which operates 16 hospitals in Pinellas, Hillsborough, Pasco and Polk counties, also is planning a 17th hospital in northern Manatee County. BayCare Hospital Manatee is slated to open in 2027. The building itself is currently in the design phase, so square footage and number of patient rooms are not finalized. The building permit application requests up to 207 private patient rooms, but the initial construction likely will have a smaller bed count.

HCA Florida Healthcare also has plans to construct a hospital in northern Manatee. The 150-bed hospital will serve as an anchor for the North River Ranch Village Center, a “healthoriented” complex that developer Neal Land & Neighborhoods is planning on 2,000-plus acres in fast-growing Parrish. No set timeline has been announced for the project.

 

WESLEY CHAPEL HOSPITAL
Wesley Chapel

BayCare Health System opened its $246-million Wesley Chapel hospital in 2023. It’s one of a slew of facilities that have sprung up across the state since the Legislature deregulated new hospital construction.

 

ALAN B. MILLER MEDICAL CENTER
Palm Beach Gardens

Universal Health Services broke ground last year on a 150- bed hospital in Palm Beach Gardens. The Alan B. Miller Medical Center, named for the founder and executive chairman of UHS, is sla1ted to open in 2025. UHS also owns the Wellington Regional Medical Center.

 

ORLANDO HEALTH WIREGRASS RANCH HOSPITAL
Wesley Chapel

Orlando Health is expanding its hospital footprint across I-4, with facilities slated for fast-growing portions of Pasco and Polk counties. Construction is underway in southeast Lakeland on Orlando Health’s 302-bed Lakeland Highlands Hospital, with an opening anticipated in 2026. Orlando Health is continuing site work for its 300-bed Wiregrass Ranch Hospital in Wesley Chapel. An opening date has not been announced.

 

SOUTH FLORIDA BAPTIST HOSPITAL
Plant City

The original South Florida Baptist Hospital had 250,000 square feet and few private rooms. Its $326-million replacement will have 420,000 square feet, six floors and 146 private rooms.

 

For Some, Permission Slips Still Apply

While Florida jettisoned its certificate of need process for hospitals in 2019, nursing homes, freestanding hospice facilities and other types of long-term care facilities still require the state’s stamp of approval. Florida is one of only 13 states, in fact, that regulates hospice services via a certificate of need process, according to a 2023 Florida TaxWatch report.

 

Source:  Florida Trend

 

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Health Care Groups Are Busy Building Across The State To Reach More Patients — And More People On Their Way To The Region

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Wherever you are on the Gulf Coast, whether it is Tampa or Fort Myers or Venice, there’s a construction crew at work.

Yes, this is because there are a lot of houses going up and a lot of condos and, even at a time when the world turns to the web for goods, shopping centers.

But that’s not what these particular crews are working on. No, these crews are on the job for health care systems and hospitals. They’re building additions, expansions and new hospitals. They are part of the booming Florida industry that is health care construction.

The word booming may seem like hyperbole, but there’s so much work it’s hard to keep up. In Tampa, just as a brand-new rehabilitation hospital is being finished on Kennedy Boulevard next to the University of Tampa, an announcement comes out that a behavioral hospital for people with mental illness will go up right next to it.

And in Sarasota, residents and reporters opened an email from Sarasota Memorial Health Care System Dec. 14 announcing it had invested $1.2 billion in projects, including a new hospital in Venice and an oncology tower in Sarasota.

So why are we seeing a boom? Why are hospital systems expanding so much?

Well, that answer is actually simple: there are a lot of patients to care for and hospitals and health systems need to be ready any contingency. Oh, and the population boom only adds to the demand for more — from urgent care and ERs to speciality hospitals and behavioral clinics.

Be Nimble

COVID-19, meanwhile, proved preparation and nimbleness have to work together. When the virus first spread, hospitals had to find ways to keep doctors and patients safe while treating the ever-growing lines of sick people. This meant finding space to test and treat patients along with implementing safety protocols.

According to a report from the American Society for Health Care Engineering, “facilities focused on critical issues like upgrading ventilation, creating isolation rooms, expanding emergency departments and building temporary structures to handle patient overflow.”

In January 2021, after the Pfizer and Moderna vaccines were introduced and in short supply, Sarasota Memorial Hospital turned an auditorium, and several corridors, into a makeshift vaccination clinic one weekend. About a week later, it vaccinated hundreds at its Internal Medicine clinic in the Newtown neighborhood.

“We weren’t as prepared for this type of crisis as we thought we were, but if hospitals had not been focused on emergency preparedness as we have for the last decade, we wouldn’t have been prepared at all,” Chad Beebe, deputy executive director of the society, says in the report.

The pandemic, however, slowed down health care construction, at least for a little while.

According to ASHE’s 2021 Hospital Construction Survey, 76% of health system officials responded that they delayed one or more projects, while 29% say the canceled one or more project. On the flip side, 29% say they fast tracked one or more projects.

But more recently, hospital construction, a $3.9 billion industry, has begun to increase in volume again, and there is optimism things are back on track.

Another survey, this one from the Associated General Contractors of America, found 41% of people in the industry believe construction of clinics, screening facilities and medical labs will be higher this year than last. And 38% believe hospital construction will be increase.

And, even though 2021 was a down year, 2% of all construction spending was on the hospital sector.

“Medical centers will continue to build and rebuild,” says says Ken Simonson, chief economist of the contractors association, “but in general I think more care is being delivered through standalone urgent care facilities, outpatient surgical centers, rehab and hospices, as well as through doctors offices. So I think the growth going forward will be on the medical building and special care side, rather than hospitals overall.”

Headwinds Ahead

While things are improving, that doesn’t mean there aren’t headwinds.

Just like everyone else in construction, the health care industry is dealing with supply chain issues, labor shortages and fluctuating prices. While these issues are largely COVID-19 related, they are causing bigger delays on projects than COVID-19 infections.

ShorePoint Venice Hospital has experienced that first hand.

The hospital, previously known as Venice Regional Bayfront Health, is undergoing a major renovation after stepping back from building a completely new hospital building.

The first phase of the project began in the fall, with the implementation of a new electronic medical record system and some infrastructure maintenance. It is now working on the second phase, which includes renovations of first floor corridors, modernization of the elevator systems and relocation of the lab into the main hospital.

The plans were announced in November 2020, and some of the second phase projects will go into early next year.

“COVID has not altered the project,” says Rolando Irizarry, network marketing director for ShorePoint Health Port Charlotte, Punta Gorda and Venice. “However, as with most industries, there have been delays due to supply chain issues.”

Irizarry says the elevator project won’t start until the end of March and not be complete until mid-January “due to materials being difficult to get.” And there have been delays to roofing work because of a long lead time — again because of supply chain issues.

Supply issues are not the only problem. The industry is also facing rising costs.

Speaking on a webinar titled the State of Healthcare Construction Recovery: Five Ways to Manage, Tim Brewster, project executive at Columbia Construction Co. in Boston, says “inflation is not only affecting current contracts, but it’s also affecting future contracts.”

Brewster specializes in health care. He says a health care system can only project so much when budgeting for inflation. He said 10% or 11% inflation, around where it stood last year, isn’t unheard of, especially with the pandemic and global issues. But with how it is now, general contractors, contractors and subcontractors are having — or need to have — difficult conversations with construction managers or clients.

They’re “trying to come to a decent accord on what would be a reasonable expectation of what could have been assumed versus what has been reality and how that’s really affected the bottom line.”

Brewster sees a lot of projects being put on hold because of rising costs. This is because health systems are being hit with supply and price increases not only from construction.

These hospitals, says Brewster, also have to buy equipment like MRI machines and electrophysiology labs during expansion. “There’s a lot of equipment that goes into a lot of these things and those items are also seeing large amounts of inflation.”

Big Growth

Venice is a hotspot in the area for health care construction activity.

In addition to the work at ShorePoint Venice, which is owned by Franklin, Tennessee-based hospital giant Community Health Systems, a publicly traded company that posted $12.36 billion in revenue in 2021, Sarasota Memorial is also active in the south Sarasota County city. It’s new hospital in Venice is a 365,000-square-foot, five-story medical center with 110 private patient suites, a 28-bed emergency care center, eight surgical suites and an inpatient rehabilitation/recovery gym. The campus also includes two-story, 60,000-square-foot medical office building for physician and specialty care practices. The project value was over $400 million.

The Venice hospital “plays a critical role in its long-term strategy of establishing convenient points of care throughout the region,” Sarasota Memorial CEO David Verinder says.

“SMH-Venice has been operating at near 100% capacity from the day it opened, and work has already begun to add a new patient care tower. That will increase the existing 110 patient suites to 178,” Verinder says. “The campus design is flexible and expandable and future plans will allow us to double the surgical and ER capacity and expand to more than 400 private patient suites.”

Sarasota Memorial also recently opened an oncology tower, the “latest addition, and a cornerstone, of our expanding Brian D. Jellison Cancer Institute.”

Verinder says the cancer center, a $193 million project, “is not just one building — it is a comprehensive cancer center that is bringing together the best doctors, the latest research, the most advanced treatments, and state-of-the-art facilities – in our own community.”

 

Source:  Business Observer

 

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2017 A Busy Year For Health-Care Construction In Central Florida

Oviedo Medical Center

January isn’t over yet and Oviedo Medical Center has unveiled its brand new 64-bed hospital, South Lake Hospital has broken ground on a free-standing emergency department in Leesburg, and Orlando Health has begun the first phase of its hospital campus at Horizon West in West Orange County.
And there’s more to come.
Local hospital systems have a full schedule of ground breakings and ribbon cuttings for facilities this year, ranging from new hospitals to free-standing emergency departments and medical office buildings.
In a highly competitive market, Orlando Health, Florida Hospital and the national chain HCA are grabbing different corners of Central Florida to build inpatient and outpatient facilities that can capture the business of the area’s steadily growing population.

“Most other areas in the country are trying to figure out how to get rid of [hospitals] and they’re talking about creative re-use. But in Florida we’re building and expanding,” said Anne Spencer, director of health-care practice group at Cushman & Wakefield, a real estate firm.

A major trend this year is construction of free-standing emergency departments, which are the front door to the hospital and make up for a large percentage of hospital admissions.

“But we need a mix,” said John Moore, president of South Lake Hospital. “We try to support development of additional primary-care offices because we don’t want people to use ER for primary care.”

Orange, Osceola, Lake and Seminole — the four counties that make up Central Florida — are home to nearly 2.4 million residents. This number is expected to grow to 2.6 million in 2020 and 3.7 million by 2045, according to projections by University of Florida’s Bureau of Economic and Business Research.
The population in Osceola County is projected to have the highest growth among the four counties, with the potential for nearly doubling to about 600,000 residents in the next three decades.
Osceola Regional Medical Center, an HCA hospital, is investing $50 million in several construction projects this year, said CEO Davide Carbone.
The hospital is adding new floors to an existing patient tower, and bringing new services online, including an eight-bed Level 3 neonatal intensive care unit (NICU), and a 28-bed inpatient physical rehabilitation unit.
It’s also expanding its free-standing satellite emergency department in Hunter’s Creek by adding 9 beds.

“It’s a great place to be with all this growth,” said Carbone, whose main nearby competitor is Florida Hospital with campuses in Celebration and Kissimmee.

Not too far away stands Lake Nona Medical City, home to UCF College of Medicine. The school partnered with HCA last year to build a 103-bed teaching hospital there. If the project gets the final approval from the state, that construction could begin soon.
Meanwhile, Orlando Health and Florida Hospital have several projects in the works in Orange County, the most populous county in Central Florida and home to 1.3 million residents. That number is projected to grow to 2 million by 2045.
Florida Hospital is adding a seven-story inpatient tower and breaking ground on a three-story medical office building at Florida Hospital Winter Garden, turning the existing free-standing emergency department to a full-service hospital.
Its new 120-bed Florida Hospital Apopka campus is opening later this year, which will be an upgrade to the health system’s older hospital that will shut down.
And in the next few months, the health system will start building a stand-alone 24-bed emergency department in Waterford Lakes. It will also begin the construction of Project Wellness in Winter Park — a partnership with Winter Park Health Foundation.
The health system’s Winter Park Memorial Hospital is beginning construction on a five-story patient pavilion on the east side of the facility.

“I see us continuing to grow in multiple locations throughout the community,” said Tim Burill, vice president of facilities management for the health system. “It’s diverse in the offerings and goes back to getting closer to patients and where they live. And that means new facilities in places we’ve not been before.”

It’s a “fair assumption,” he added, that the hospital will be building more urgent-care centers too.

Orlando Health, the region’s other major health system, is focusing this year on developing what it dubs “Health Pavilions” — a flexible design of services and buildings tailored to meet each particular market’s demands, said CEO David Strong.
The first of those, the Spring Lake Health Pavilion in the Dr. Phillips area, is expected to open in the coming days. Another pavilion is slated to open in spring in Summerport on Winter Garden Vineland Road. Both will offer primary care, specialty care, imaging, laboratory services.

“Globally, you see a movement toward ambulatory and outpatient care, which are easier and cheaper for consumers,” said Strong. “And that [trend] will continue.”

A few weeks ago, Orlando Health began the construction of a free-standing emergency department at its Horizon West medical campus near State Road 429. It will start building an accompanying 103-bed hospital tower next year.
South Lake Hospital, which is part-owned by Orlando Health, is building two health pavilions with free-standing emergency departments. The Health Pavilion at Blue Cedar in Leesburg near U.S. Highway 27 and Florida’s Turnpike broke ground earlier this month, and another one at Four Corners at the junction of U.S. 27 and U.S. Highway 192 in Lake County, is expected to open later this year.

“As more people come to Central Florida, more hospitals will come online and come out of the ground,” said Spencer of Cushman & Wakefield. “I can’t tell you how many, but it’ll be interesting to see where each hospital system will stake their claim and where everyone’s territory going to be.”

 

Source: Orlando Sentinel
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