Health Care Construction 2009

Despite financial woes, health care projects continue to spur the state’s construction industry

By Robert Carlsen

If there is one single silver lining on the construction industry horizon in California in these hard times, it would be the health care segment.

As the state continues to struggle with budget issues, the California Hospital Association lauded Gov. Schwarzenegger’s plan to stimulate construction jobs by simplifying permitting and plan review processes to accelerate hospital construction projects under $2 million. The governor says this would inject approximately $160 million into the economy.

“Under this plan, hospitals will be able to undertake lower cost construction projects -- such as the installation and anchoring of new equipment, bracing of cabinetry or moving non-weight-bearing walls -- without having to obtain prior approval from OSHPD,” says C. Duane Dauner, president of the CHA.

“Hospitals will still have to comply with all applicable building codes and standards, and OSHPD inspectors will be required to certify a hospital’s compliance with these standards at the completion of the project,” he adds.

But these small projects, if they get off the ground, are small potatoes compared to the majority of health care projects under way.

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Since 2003, health care construction in California has more than doubled to $21.4 billion, and 2009 will no doubt continue the rise. According to the Office of Statewide Health Planning and Development’s Facilities Development Division, there are 5,363 projects – seismic upgrades or building replacements – either in the plan review stage, in-between planning and construction, under construction or just recently completed.

The reason for the jump is, of course, compliance with Senate Bill 1953, the amendment to the 1973 Hospital Facilities Seismic Safety Act that was passed following the 1972 Sylmar earthquake. SB 1953 came into existence as a result of the 1994 Northridge earthquake. The bill requires that all 450 acute care hospitals in California evaluate and report on both the structural and nonstructural safety of each of its hospital buildings. Either repairs or rebuilds will be made or the facilities will be shut down.

The deadline to meet the requirements have changed over the years, but those buildings that OSHPD deems high-risk now must meet compliance by Jan. 1, 2013. A two-year extension is also being offered to some projects. Other buildings with less risk have until 2030.

Last year, OSHPD introduced the Hazards U.S. Multi-Hazard standardized methodology and software program that estimates potential losses from earthquakes. The California Hospital Association says that using HAZUS system is a much more accurate risk evaluation method of hospital buildings and saves hospital owners millions of dollars in project costs (and pre-construction time).

Hospitals across the state have requested HAZUS reevaluations for 250 hospital buildings. The program also allows hospitals to gain deadline extensions by reevaluating the seismic risk of its buildings subject to the 2013 seismic safety deadlines. The final filing date for HAZUS reevaluation is July 1.

In addition, the state’s new 2020 Seismic Safety Extension allows city or county hospitals that meet strict financial hardship criteria to receive a seven-year extension from the 2013 seismic safety deadlines and instead requires the hospitals to replace those buildings by 2020.

Meanwhile, construction, engineering and design firms are currently heavily engaged in a number of high-profile health care projects.

For example, McCarthy Building Cos. has seven major projects under way, including the Mercy Medical Center in Merced.

Catholic Healthcare West’s $162 million Mercy Medical Center replacement project was designed by RBB Architects; Harris & Associates is the construction manager.
The 196-bed, 267,000-sq-ft facility, scheduled for a January 2010 completion, was sited on a greenfield across town from the existing Mercy Medical hospital. A central utility plant is also included in the project.

Bryan Anderson, McCarthy project manager, says that although every job has challenges, this one had to do with getting OSHPD approvals completed so construction can begin. “We did a lot of early, upfront work and it paid off,” he says.
In Southern California, McCarthy recently completed the $558 million Los Angeles County + University of Southern California Medical Replacement Center project and is currently constructing the Providence Holy Cross Medical Center in Mission Hills, Providence St. Joseph Medical Center’s Roy and Patricia Disney Cancer Center in Burbank, the Rady Children’s Hospital Acute Care Pavilion in San Diego, the Ridgecrest Regional Hospital Patient Tower in Ridgecrest and the St. Joseph Mission Hospital in Mission Viejo.

McCarthy is also completing the new Kaiser Vallejo, a $240 million, 430,000-sq-ft replacement hospital with 188 new beds, an inpatient rehab unit and a new central utility plant.

Also up north, Skanska, as general contractor and CM, is involved in site preparation (environmental cleanup and infrastructure) for the new Palo Alto Medical Foundation’s San Carlos Medical Center project in San Carlos. NBBJ is the architect. A construction start is planned for early this year and completion for 2013.

The campus will include 97 beds, an urgent care center, laboratory, cardiovascular care, emergency room and a full-service acute care hospital.

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