Health Care: The Market is OK—for Now
July 01, 2005

By Staff
Appeared in Consulting-Specifying Engineer

For the New York-based Syska Hennessy Group, the health-care market has been very good to the consulting engineering firm, with major activity on both coasts.

"Everything we see, hear and feel suggests that the health-care market will continue strong," says Bill Scrantom, the firm's national health-care director. "The end is not in sight. The only thing that might slow it down is an increase in interest rates."

That being said, Scrantom adds, they have heard some economists suggest that the health-care market might begin to taper off in the coming year. But as things stand today, the firm is plenty busy.

"The East Coast continues to offer a lot of opportunities for designing acute-care facilities," he says. "And on the West Coast, there's also lots going on."

One driving force in the California market is SB-1953, which mandates that all hospitals in the Golden State—new and existing—meet seismic codes. There are exceptions and extensions for hospitals in lesser seismic zones—but only through 2006, says Scrantom.

Another major driver that's keepping health-care work steady is the fact that technology in specific health-care fields continues to develop. Combined with changing population demographics, this more advanced medical equipment has led to a market for specific types of outpatient care clinics.

"On both coasts, we're seeing a big interest in specialized cancer treatment centers and ambulatory care centers," says Scrantom.

Actually, to hear Scrantom tell it, the picture has changed little since last year. In CSE's 2004 overview of the hospital market, the trend was a strong and robust market with new facilities being built on greenfield sites with good-sized budgets to support this construction. Since then, little has changed, but health-care facility owners, according to Scrantom, are a little tighter with their budgets.

"Any talk of budgets usually elicits discussion of what is a revenue generator," he says. "For instance, a chiller is not a revenue generator."

That means designers of basic building infrastructure have to more carefully scrutinize their designs. Offsetting a turn toward value engineering, however, is the need for reliability, particularly in retrofit projects, where the ongoing operation of a health-care facility can't be compromised. "If you shut the facility down, the ROI doesn't pencil out," said Scrantom.

And not all infrastructure-related improvements are a hard sell. "Cogen is a no-brainer for hospitals," says Scrantom, "because they generate so much heat."

Elsewhere on the technology front, Syska is looking at microturbines, especially for health-care systems in California, where local government rebates support their installation and use.

Regardless of the the type of technology engineers experiment with, Scrantom adds, there is a universal mandate affecting the health-care design industry: the need for facility flexibility.

"That's the real buzzword in health-care design these days," says Scrantom, "no matter what you're talking about. Future adaptivity is the key. And that's all about modularity and plug-and-play."

Seemingly good advice for all for consulting engineers working any market these days.