State of LA: Health Care Reform’s Impact on Local A/E/C Industry

March 16, 2010

Healthcare, January 2010 On January 20, 2010, SMPS offered its local community the opportunity to attend a forum at The Millennium Biltmore Hotel in Downtown Los Angeles.  An esteemed panel of healthcare experts addressed the ever-present issue of health care reform to examine the state of health care in three Los Angeles area facilities.  Moderator of the event was James Lott, Executive Vice President of the Hospital Association of Southern California.  Lott was joined by three other panelists: Richard Thompson, Vice President of Facilities Management, City of Hope; Zeke Triana, AIA, Director, Facilities Planning and Construction, Cedars-Sinai Medical Center; and Robert Hacker, Regional Director, Facility and Construction Services, Providence Health and Services.

The panel presented their perspectives on health care reform and where the industry is in relation to our local A/E/C community.  Panelists offered a vision of what their specific facilities have to offer the Los Angeles area A/E/C industry.  Lott opened the forum by discussing information on where our current industry is, economically.  He mentioned that a major goal President Obama has had includes the final decision on health care reform bills being made before his State of the Union Address.  However, the election of Representative Scott Brown, Massachusetts, to the Senate seat has provided a slight set-back on the process.  Lott stated, "What happened yesterday may be a game-change on health care reform." 

]With the reform in mind, panelists offered some positivity to the moment.  Thompson gave a brief history on the City of Hope culture with insight into why their facilities are on the rise.  He said, "We are not just a hospital, but a research program as well."  The facilities house research programs for AIDS, diabetes and cancer (with a primary focus on cancer treatment), which allows for the need to transcend and expand their facilities.  This means more work for quality A/E/C professionals.  City of Hope is working on the following growth opportunities: Ambulatory Surgery Center; Vivarium Expansion and Renovation; Ambulatory Treatment Center; Hospital Expansion; and Miscellaneous Renovations and Expansions totaling $6 million annually.

Triana discussed the extensive changes taking place as Cedars-Sinai Medical Center expands its horizons.  For over 100 years, Cedars has provided the highest-quality health care for patients in Los Angeles, West Hollywood, and Beverly Hills.  Through the health care reform uncertainty, Triana offers that Cedars aims "to focus and continue to improve on quality patient safety," regardless of the state of the health care reform.  With that in mind, Cedars has invested heavily on advanced technology information systems.  With patient volume up and finances up, there is a demand for research recruits.  This means there is a demand for more space.  Thus, they are proceeding with all or most of their capital improvement projects at this time.  These include: an ED Expansion, Cath Lab Expansion, Cancer Center Expansion, and OR Expansions that are all to be developed between now and 2017.  Long-term, they look forward to replacing the main medical center by 2030.  His take-away: "If you are interested in working with us, come to us understanding what scale or size of project is appropriate for your firm.  Bring a seasoned 'A Team' to the table with very senior people."  Cedars provides a positive outlook for A/E/C organizations with the capacity to work with this premier healthcare provider in Southern California.

Finally, Hacker presented prospective opportunities offered by Providence Health and Services' five California campuses. After a brief background on Providence history and current projects he spoke about the various campuses' needs.  Upcoming, Providence has a possible seismic retrofit in San Pedro, which may or may not have to be completed.  They also have two tower replacements in both Torrance and Tarzana that are OSHPD projects with target construction dates of 2018-2021.  They are also responsible for construction of a high school science center, in addition to a few upcoming parking structures.  However due to budget constraints, all projects will be phased-out.  Hacker said, "We can't afford to do all of the work at the same time."  They are a faith-based organization whose primary focus is to "take care of the poor and vulnerable."  Based on this mission, Hacker and his team must work on a project-by-project basis with most of the opportunities based on their budget demands.

In closing Lott offered that based on future medical technological advances, Americans will continue to live longer lives.  What does this mean for the A/E/C industry?  As medical technology advances, and people live longer, the medical industry will continue to grow.  So will the need for modernized facilities.  Fortunately, this offers A/E/C professionals an even better perspective for opportunities in health care construction and development - regardless of the nations' outlook on health care reform.