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— Health Care Properties Quarterly — September 2016
Designing a NEWGENERATION of Senior Environments...
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H
undreds of hospitals across
the U.S. are facing myriad
issues related to aging
infrastructure and facility
performance. As the deliv-
ery of modern health care continues
to evolve, many health care system
operators are finding significant benefit
to investing in real estate and facil-
ity assessments.These assessments
can help owners proactively identify
the reasonably predictable risks and
deficiencies they may be facing in the
near term, typically the next one to five
years. Health care providers may find
this analysis to be particularly advanta-
geous versus other types of campus
or facility owners for a multitude of
reasons, including the redundancy
and backup required to maintain the
critical needs of their patients 24/7;
to allow for an apples-to-apples com-
parison of varying facility needs and
existing conditions across a system,
regardless of whether the facilities are
operating in different locations or on
the same campus; and the fact that
aging infrastructure on one part of
the campus could affect operations in
other, newer parts of the campus.
A sophisticated assessment team
also can provide data to assess and
evaluate existing real estate assets
often found on or in proximity to
many health care campuses. Inclu-
sion of these components, such as
land or an underutilized facility, along
with an understanding of the valua-
tion of assets and market projections,
provides a health care owner with a
holistic frame of reference.The overall
assessment can help guide decisions
for both short- and longer-term solu-
tions, and compare these costs and
benefits of renova-
tion against starting
over with a major
project or new
build.This clarity
of the performance
and risk across all
of their facilities,
regardless of location
or the way it is oper-
ated, helps eliminate
surprises.
Health care cam-
puses typically are
large energy con-
sumers, and those
costs make up a
major portion of
any provider’s operational budgets.
Designers, mechanical/electrical engi-
neers and energy consultants typically
are the first stop an owner may make
when looking for energy assessment
services and they provide valuable
information regarding impacts of any
proposed energy upgrades. But in
recent years, many health care pro-
viders are finding it highly beneficial
to include a builder with expertise in
health care facility construction, one
who can provide a gut check on con-
structability, along with accurate cost
data reflecting current or future market
conditions, based on historical data
and escalation.
This ensures better decision-making
for systems and equipment, in addi-
tion to best practices for phasing, mini-
mizing impacts to the facility and bun-
dling of construction into packages.
Having a health care facility con-
struction specialist on board is impor-
tant because it addresses the signifi-
cant cost implications that can come
from needing to answer the question,
“How will we get this done?” Perhaps
the upgrades require a crane. Maybe
you need to remove a section of the
enclosure to remove a major piece of
equipment. Having a clear lens on the
entire picture allows for appropriate
allocation of dollars across all the cam-
puses based on need and failure risk.
On a recent assessment program
for a major health care provider in the
Denver region, Mortenson performed
an analysis in tandemwith a design
team, resulting in a comprehensive
report that clearly delineated high-
priority recommendations for mitigat-
ing risks, along with outlined costs for
each of the recommendations.
Before starting, the assessment team
sat with the owner’s facility manage-
ment team to understand the nature
and severity of any operational and
equipment issues. By creating this list,
the teamwas able to pay particular
attention or provide additional inves-
tigation into higher priority items
as warranted. It allowed the team to
incorporate “must haves” into the plan
and prioritize the mitigation of any
risks of failure, such as those systems
that have gone past their typical esti-
mated life, or if there is a potential for
a component to fail that would result
in a major impact on the operation of
the facility. By individually outlining
and pricing each of these proposed
solutions to the each of the items on
the list, the teamwas able to quickly
assemble items with common denom-
inators and/or potential overlapping
solutions, such as replacing pumps
within a cooling tower all at once.The
owner was able to prioritize based on
return on investment and available
budget, while also allowing them to
easily see where bundling improve-
ments could provide better value, or
save on schedule or general conditions.
Energy use and performance also is
key to a successful assessment. Energy
models can provide valuable predic-
tive performance of any new proposed
equipment or systems. Seemingly
small design decisions often can pro-
foundly affect energy utilization and
construction costs. Beyond initial
first cost and payback periods and
performance efficiencies of the equip-
ment, it is important to consider the
availability of rebates from local utili-
ties on equipment selection. These
rebates can significantly impact the
bottom line, particularly for a hospital
that may be considering upgrading its
central utility plant. As an example,
a health care facility could receive a
rebate of between 40 cents to 50 cents
per square foot of building area if done
correctly. Mortenson’s in-house energy
modeling services provided a cost- and
schedule-based complement to the
design team’s data /evaluation.When
all put together, the comprehensive
report provides target dates for execu-
tion of the work, the initial cost of the
improvement, along with expected
savings for the life of the improvement.
Comprehensive assessments are the
best way to benchmark assets and cur-
rent conditions compared to the same
baseline.This allows your organiza-
tion to analyze and plan holistically
across the system to ensure every
dollar is having the largest impact on
your operations and every facility is
functioning at the highest level. It’s
about providing the most bang for the
buck.
s
Brandon
Bergholz
Construction
executive and
health care market
sector leader,
Mortenson, Denver
