Purchasing the right land for a healthcare enterprise is only the first in a long line of steps it takes to move from an idea on paper to ushering in the first patient.

 

While many of the challenges in choosing a site with favorable demographic patterns, an architect with functional and aesthetic sensibilities and a reliable contractor and construction team mirror those of any business build process, healthcare presents its own unique challenges. A long list of federal regulations, patient safety considerations, load-bearing requirements to house heavy equipment and increasingly complex technology needs calls for professionals with specific healthcare experience.

 

A healthcare hub, Nashville has become a natural fit for those in allied or supporting industries, including numerous healthcare-focused real estate and construction firms. In addition to homegrown companies, many national firms have set up satellite offices in the city. One such company is Robins & Morton, which was listed as the top general contractor by Modern Healthcare in 2009’s annual construction and design survey. Founded in 1946, the firm has been involved in healthcare projects for more than four decades. The specialized industry sector now makes up more than 90 percent of Robins & Morton’s projects.

 

Based in Birmingham, the national contractor has six offices in the United States including one in Nashville. Jim Poole, division manager who oversees Middle Tennessee operations, said HCA was the impetus to open a local office in 1981. Robins & Morton had begun working for the hospital giant when HCA officials asked them to establish a local presence. Poole called the decision to come to Nashville a “no brainer.” He added, “There’s such a broad medical base here that we’ve been open ever since.”

 

When selecting the right team to design and build a project, Poole cautioned it’s key to do the homework and select companies that truly understand the healthcare industry and its myriad special needs. “Healthcare, on the construction side, takes a unique approach because there are so many systems,” he explained. “You have to spend a lot of money training your people … teaching them the requirements,” he said of the commitment to the industry. He added it’s also important to look for companies with collaborative mindsets to work together as building is very much a coordinated team effort.

 

From the standpoint of growing construction concerns, Poole noted, “Probably the one thing we’re running into more and more are seismic constraints that are related to earthquakes.” Over the past several years, contractors have been required to beef up structures. The need for enhanced support is evident in light of recent major quakes in Haiti and Chile and more minor quakes in Los Angeles and off the coast of Oregon.

 

One example of reinforced measures, Poole explained, is to install hangers to provide additional support to duct work, piping and fixtures to either withstand shaking or to at least allow additional time to evacuate a healthcare facility. While not typically thought of as a hotbed of earthquake activity, the New Madrid Seismic Zone runs midway between St. Louis and Memphis to the west. Historically there has been activity along the East Tennessee/North Carolina border, as well, so building to withstand quakes has to be considered throughout Tennessee.

 

Like most business sectors, Poole said healthcare contractors have felt the impact of the sagging economy. Unlike some industries, however, the timing of the downturn has been somewhat delayed.

 

“The way our cycle works, once things slow down, it takes about a year to hit us; and once things pick back up, it takes about a year for us to get caught back up,” he explained. For his company in 2009, he continued, “Revenue-wise we had a good year because we already had work on the books. Sales-wise, we were off 30 percent … maybe more than that … because owners were running into roadblocks financially.”

 

He noted the bond markets fell apart and credit tightened up leaving many who wanted to move forward on projects without a viable funding source. He noted that in the current crunch, more and more hospitals have been looking into the HUD 242 program.

 

Originally set up as hospital mortgage insurance, the U.S. Department of Housing and Urban Development (HUD) expanded the 242 program last summer to allow eligible hospitals to use 100 percent of such loan proceeds to refinance existing debt, according to attorneys in Waller Lansden’s finance and restructuring practice. HUD, in conjunction with the Federal Housing Administration (FHA), has provided hospitals with access to affordable financing for major capital expenditure under this program. The program is structured so that the FHA insures certain mortgage loans placed by private lenders to eligible hospitals.

 

If financing can be secured, Poole said it’s an ideal time to move forward on projects. “The smartest thing you can do is keep moving right now because it’s a buyer’s market.”

 

During this latest economic downturn, Poole has seen projects coming in under budget with lowered materials costs and idle construction companies. However, he cautioned, “I think in time prices are going to start going back up. Our fear is the commodity market is going to start increasing its prices,” he said. Poole added the price of rebar is already on the rise and said his company has already experienced one price increase from a steel provider.

 

Still, Poole believes the window of opportunity to build at the best price is still open. “I think that trend could continue for a little while. There are a lot of folks who are very, very hungry right now.”
 

The Winnie Palmer Hospital for Women & Babies, built by Robins & Morton, opened May 31, 2006 in Orlando. With a construction cost of $88 million, the elegant, yet cost-efficient, hospital is one of the latest additions to the campus of Arnold Palmer Medical Center and is named in honor of the golf legend’s late wife. The Winnie Palmer hospital facility incorporates a luxurious assortment of furnishings, fabrics, art and amenities comparable to an elegant hotel. Other innovations include large private rooms with Murphy beds, large showers, private consulting rooms, and the use of retractable artwork and moveable textiles for concealing in-room medical equipment.