Healthcare Design + Construction: Trends, Innovations, Opportunities
AIA Academy of Architecture for Health
American College of Healthcare Architects
July 24-26, 2009 – Chicago, Ill.
My topic today is “Healthcare Design + Construction: Trends, Innovations, Opportunities.”
In the time allotted to me, I hope to accomplish several goals:
• First, to examine the current status of hospital design and construction, largely from the perspective of your client, the hospital CEO.
• Second, to look at the changing EMPHASIS in healthcare delivery and what it means to you as hospital designers.
• I will also discuss some KEY INNOVATIONS in building design and construction, notably BIM and Integrated Project Delivery.
• Finally, I hope to unveil some important OPPORTUNITIES for AEC firms, especially those that will result from the growth and aging of the U.S. population over the next three decades.
I have some valuable data that my colleagues Jayne Talmage, Tim Duggan, and Dr. Jim Haughey at Reed Construction Data and RS Means have prepared exclusively for this meeting.
They show the following:
• $17.1 BILLION dollar value registered 2009 YTD
• Renovation is taking a slightly increasing share of the healthcare market.
o In 2008 it was 36% of the market
o In 2009 YTD renovation makes up 40% of those projects registered in the pipeline
• GREEN PRODUCTS more evident in new construction than in renovation projects.
• In June 2009, RSMeans 30-city national average cost of hospital construction was $258 PER SQUARE FOOT for the building envelope only.
• 2,000 HEALTHCARE-RELATED FACILITIES currently in the “planning” pipeline, representing hospitals, clinics, nursing homes, and assisted living facilities
• In Chicago, Children’s Memorial is the largest project currently under way, at 1.2 million SF and about $500 per SF (for the building envelope only).
• 659 MEDICAL PROJECTS are currently under construction across the US, representing 46 million SF of space.
They also have some less cheerful news, which you’re well aware of …
• A 14% DROP IN HOSPITAL PROJECTS registered this year compared to last year at this time.
Of course, all this is happening within a much more turbulent economic environment.
Hospital systems are suffering from the global downturn:
• Debt problems – cost of debt has doubled, if they can get funds at all
• Charitable donations – down (except for “star” hospitals)
• On top of which, they face great uncertainty about reimbursement – more on this later.
Let’s take a look at how your client, the typical hospital CEO, views the world.
What is the profile of the typical Hosp CEO – What’s he or she like? Probably 51 years old, MBA and more, 3rd decade of HEALTHCARE, immaculate desk.
These people are not Type A. They’re Type A++.
What’s on their minds?
I call this my “Oprah Question”: “What wakes you up in a cold sweat?”
• CEOs may be able to “work around” a lot of other problems, but not the medical staff
• More hospitals putting doctors on salaried staff – a new set of issues
• Whether the medical staff is salaried or fee-for-service, CEOs have to keep the docs happy: w/o the docs, they’re no longer C-E-O, they’re D-O-A!
2. Reimbursement – “Can I keep the doors open?” – ongoing issue, even more uncertain in today’s climate – more on this later
3. Competition: Sutter vs. KP, Northwestern vs. U of Chicago, Children’s Memorial vs. Comer Children’s
• How is “the other guy” gonna cut into my market share?
4. Regulatory bodies: Medicare/Medicaid oversight thru the CMS, JCAHO, state boards. You know the line: “I’m from the government, and I’m here to help you.” Yeah, right.
• It is the nursing staff that keeps any well-run hosp humming.
• They are the “drill sergeants,” the NCOs, of the hospital
• Avg nurse: 48-52 yr old, 20-30 lb overweight, walks 5-7 miles per shift – 80% of their time is spent “fetching” (proven in 1000 hours of videotape)
• Hospitals lose a substantial % of RNs every year due to worker comp claims and long-term disability
• They feel underpaid and exploited – not given respect
• This leads to high turnover: many of the best leave to work for pharma companies or other less stressful employment situations.
6. Patient safety and liability
• Bed falls, infection control, “medical misadventures,” other disasters
• 100,000 patient deaths/yr to hospital error or nosocomial infection
Think about that: 100,000 patient deaths. That’s about 25 a year per hospital, twice a month. Every fortnight, on average, there’s a death that should not have happened. How would YOU like to be saddled with that responsibility?
7. Finally, we arrive at “Patient” issues: “Patients, like the poor, will always be with us.
8. Technology: medical equipment, services, IT, electronic med records
9. Keeping big donors and foundations happy
10. Public relations, marketing: catastrophes, clinical staff malpractice
So, that’s the “milieu” of today’s hospital. You’re working with CEOs, hospital executives, and health systems boards that have an overwhelming list of EXCRUCIATINGLY COMPLEX PROBLEMS AND PRIORITIES.
Have you noticed that I’ve said VIRTUALLY NOTHING about “buildings”?
You – hospital designers and your Building Teams – are way down on the CEO totem pole of priorities.
• Hospital CEOs may do 1 major project per career move (every 5-10 yr)
„« May be their first and only building project
„« Each one poses a new set of problems
„« Always a new learning experience, every single time.
• Remember, too, that they are not in the “building business” – they’re in the HEALTHCARE business.
• Thus, your project actually represents A THREAT to them, a potential disaster – cost overruns, delays, design or construction shortcomings, worker or visitor injury, etc.
If something goes wrong with the building, that’s another headache the CEO would rather not deal with.
• Things that may be important to you – “sustainability,” EBD, LEED, biophilia, aesthetics –are not nearly as important to the CEO
• Most hospital CEOs are going to invest in visible medical technology – the latest-generation open MRI, or a new linear accelerator for the Radiation Oncology unit – anything they can put in their radio and TV ads – before they will invest in anything related to “building technology.” You can’t brag about variable-speed drives for your HVAC system in a TV ad.
• Most of the things you can influence or improve – take energy savings, for example – are only a small portion of the total hosp budget. A 1% savings on debt or worker comp may have much more impact on a hospital’s bottom line than 10% savings in energy.
By no means do I wish to suggest that what you do is unimportant. For the 3 or 4 years that your project is actively in planning, design, and construction, it will surely be one of the hospital’s top priorities.
And occasionally, you may get a “dream client” who shares your enthusiasm and loves doing capital projects. These CEOs are candidates for sainthood.
In general, however, most CEOs just want you to build the box as fast as you can and get out of the way so they can get on with their REAL business, PROVIDING HEALTHCARE – and staying afloat.
But never forget that most executives in the C Suite have a swarm of other problems – some of them gravely important – buzzing around in their heads.
Strangely enough, this scenario presents opportunities: Can you make the process painless? Can you “sneak in” things you want (LEED Gold? GGHC?), while still delivering on quality, cost, and schedule?
That’s very difficult to do, and I don’t envy you the task.
TODAY’S HEALTHCARE CLIMATE
The scenario I just described broadly describes the situation of a year or two ago, and much of it still applies. But let me turn now to what’s new in Today’s HEALTHCARE Climate.
Of course, you already know what’s new: ECONOMIC MELTDOWN. Bear Stearns. Wachovia. B of A. AIG. GM. CIT.
On top of the macroeconomic mess lies yet another unsettling factor for your client – HEALTHCARE REFORM. What does HEALTHCARE Reform mean to the typical hospital CEO?
Your client has one thing in mind: How will HC reform affect my hospital’s reimbursement? What will my revenue stream look like? And why should we risk building in such uncertain times?
Let me put this in perspective.
In the early 1980s, when I was with Medical Economics magazine, I wrote about the “business” of medicine for my 140,000 physician readers. At that time, healthcare represented 7-8% of GDP, and I would write horror stories about the terrible things that would befall the medical establishment – and the free world as we know it – if HEALTHCARE as a percentage of GDP ever went into double digits.
But as costs kept going up, the Reagan Administration pushed through diagnosis-related groups, or DRGs, which for the first time since the creation of Medicare in 1965 gave government the upper hand over reimbursement.
Well, of course HEALTHCARE did go over the dreaded 10% tipping point, and the Clinton Administration tried to reform the whole system, with drastic consequences. When the Balanced Budget Act sliced Medicare reimbursement to shreds in 1997, hospital construction went flat for three straight years.
Since then, HEALTHCARE has grown to where today it consumes 17% of GDP, or $2.4 trillion - $7,900 per person – and – left unchecked – could reach 20% of GDP and exceed $4.3 trillion in less than a decade.
Those are the kinds of numbers that are fueling the Obama Administration’s push on healthcare. And you are all too familiar with the litany of other complaints against the system:
• 50 million Americans not covered by health insurance.
• No insurance portability.
• No coverage for many pre-existing conditions.
• An unconscionable infant mortality rate.
• Medicare in danger of going bust as Baby Boomers retire.
We also know all too well that there’s a great deal of waste in the system.
Here I would strongly recommend a brilliant article by the surgeon and Harvard Medical School professor Atul Gawande in the June 1 issue of The New Yorker.
In this article, Dr Gawande reported that, in El Paso, Texas, Medicare spends $7,500 a year per patient. Meanwhile, in McAllen, Texas, just a few hundred miles away, with all possible variables accounted for – patient demographics, malpractice, availability of medical technology, environmental factors, etc. – Medicare spends $15,000 a year per patient. In fact, McAllen has the second-highest Medicare cost per patient in the U.S., after Miami.
Why such a disparity in costs? Because in McAllen, Gawande found, physicians routinely order more tests and procedures than their counterparts in El Paso. The “medical culture” allowed for – in fact, it ENCOURAGED – overutilization, even though – and this is a key point in the whole HEALTHCARE debate – even though it produced NO SIGNIFICANT IMPROVEMENT IN CLINICAL OUTCOME over El Paso.
Let me repeat that: no significant improvement in clinical outcome, at twice the cost.
The Obama White House has cited this article to make the case that the government – and private insurers – should not have to pay for drugs, treatment, or services that DON’T WORK.
That’s why the President went to the Cleveland Clinic earlier this week, because the Administration sees the Cleveland and Mayo Clinics as models of how healthcare should be delivered: through coordinated care, and preferably by salaried medical staffs who do not have a vested interest in overprescribing and overutilizing the system.
Now, from my decade of experience writing about doctors, I can tell you that achieving this vision will take nothing short of a revolution in how healthcare is provided in this country.
Doctors like their little fiefdoms, and nowhere do they like their fiefdoms more than in the hospitals that they staff.
So, there is going to be a huge struggle ahead, as government INSISTS that the current system of healthcare delivery be radically reformed – or else we go bust – and physicians and some hospital systems resisting that pressure.
It’s impossible to predict how this struggle is going to be resolved, but I suspect that hospital systems will be pushing their medical staffs very hard – and that this will result in new models of healthcare delivery in hospitals.
And, as a result, there will be a demand for radically different design concepts to make a new style of healthcare delivery feasible.
EMPHASIS ON PERFORMANCE
That’s why PERFORMANCE is going to be the next big watchword in healthcare. It’s already happening. For example:
• Since last October 1, Medicare has stopped paying hospitals for additional costs for certain medical errors. These 8 “Never Events” include leaving a sponge or clamp in a surgery patient, or transfusing a patient with the wrong blood type.
• 1300 hospitals and at last count six states – Colorado, Massachusetts, Michigan, Minnesota, Oregon, and Vermont – are also not billing patients or insurers for up to 28 “Never Events.”
• Medicare is also looking into “value-based purchasing,” whereby healthcare providers would be reimbursed to some extent based on clinical outcomes.
• Medicare has also set up a Web site where the public can obtain comparative information on hospitals. This is going to be like “Angie’s List” for hospitals, providing more information than the public has ever had on relative performance of hospitals.
Whether or not you agree with these policies and programs, they represent a major trend in Washington and in many state capitols to place greater emphasis on:
2) Measurable outcomes, and
3) Greater public access to comparative data – greater “transparency,” to use that tiresome Inside-the-Beltway expression.
How, then, will these trends affect your firm and your bottom line?
The new stress on PERFORMANCE will filter down from the clinical side of the healthcare business into facility design and construction. You can bet that if the government is going to be hammering hospitals and doctors on performance, healthcare executives will soon be hammering you to PROVE the measurable value of your piece of the cost equation.
Thus, hospital executives are going to be asking you for the VALUE PROPOSITION of your designs.
Hospital pencil-pushers will be putting even greater pressure on AEC firms to control spending and demonstrate improved performance.
You are going to have make a compelling case that the facilities you are designing and constructing are cost-effective – not just on long-term, life cycle cost, but right up front, on first cost.
You are going to be asked for evidence – verifiable data, scientific studies, not just anecdotes – to prove and that any seemingly elaborate design features (e.g., multistory daylit lobbies) or “exotic” innovations—healing gardens, standardized headboards, same-handed rooms, natural ventilation, and other components of evidence-based design and sustainability — really pay off in terms of clinical efficacy, patient safety, and cost savings.
You can expect further interrogation of your designs, even as the competitive environment between hospitals creates greater demand for single-patient rooms with family space, ever-larger ORs, the latest medical and information technology, and greater “customer” amenities – all of which may add to project costs that YOU will be expected to keep in line.
Let me now turn to INNOVATION.
I’m sure every firm that is represented here today is doing many clever things in its HEALTHCARE projects, or you wouldn’t be here.
For example, HDR has come up with a system for putting the surgical bed on a track. This allows the surgical team, when necessary, to move the patient from the OR to the MRI without risk of contamination.
You may also have seen the Experimental Patient Room 3.0, which is being developed by Anshen+Allen and Arup.
Tsoi/Kobus has established a reputation in designing proton therapy facilities.
Others are experimenting with Midboard Patient Rooms, where the bathrooms for two adjacent rooms are located in a space between the rooms.
And there are many other design elements you’re working on – such as flexible nursing stations, patient-controlled lighting, technology to reduce bed falls, noise-reduction systems, water-saving plumbing fixtures, bariatric facilities … the list could go on and on.
If I may ask for your indulgence, I’d like to mention an innovation my company will be introducing in about six weeks.
Reed Construction Data and RS Means will be releasing a new service that will help you analyze how healthcare construction markets in more than 300 metro areas across the U.S. are expanding (or contracting). You’ll be able to track the “hot” and “cold” markets dynamically across a 12-month timeline.
BIM + IPD
The innovation that we at Building Design+Construction are following most closely is BIM, and its first cousin once removed, IPD, or integrated project delivery. Along with the Green Building Movement, we at BD+C refer to BIM and IPD as “transformational ideas,” because they can literally transform the AEC industry.
Building information modeling represents the next generation of Computer Aided Design. As you know, the key to BIM is its PARAMETRIC nature: the ability to instantaneously change your design and have the model flow all the physical consequences of those changes in dynamic fashion.
Change that patient room door from a 7-foot-6 wooden door to a 7-foot-8 metal door, and everything changes with a click of your mouse.
Of course, implementing BIM in your practice is much more difficult than I have just described, and architecture firms across the country are struggling with it to one extent or another.
We just released our 2009 Giants 300 survey results, and we have exclusive data on BIM adoption by major AEC firms.
Of the 320 AEC firms that participated in Giants survey:
• 83% have at least one BIM seat license in house
• Half have more than 30 seats
• 23% have 100-plus seats
• The average firm has 106 seats
Among leading HEALTHCARE design firms, the leaders are:
HDR and AECOM, with 2000 seats each
HOK, with 840
Cannon Design, 320
Turner, with 530 seats, and Mortensen, with 163, lead the contractors, along with DPR (121), McCarthy (120 seats), Hensel Phelps (71), JE Dunn (62), and Ryan Companies (60 seats).
It’s one thing to have licenses for BIM seats, and another to have professionals actually using BIM in projects.
We’re hearing about all levels of use. At one end are early adopters like KlingStubbins, which has been doing virtually 100% of projects in Revit for a number of years.
At the other end are firms that are “experimenting” with BIM. Some are setting up a skunkworks to “shadow” a project in BIM while also using CAD or even 2D. Others are doing parts or aspects of projects in BIM, such as the structural work.
Many are participating in BIM User Groups. One strong recommendation I would make today is that you check out your local BIM user group and have some of your best IT people join it. That’s where the real learning and collaborative problem-solving is going on.
It’s all early innings for BIM. Autodesk Revit has captured most of the market, somewhere around 80%, but Bentley and Graphisoft have their loyal followers, and there are specialty software vendors that are also contributing to the BIM revolution – such as Rhino, our own SmartBIM, and Autodesk SEEK, Tekla for structural engineering, Ecotect and Integrated Environment Solutions for energy modeling, and so on. Some of the bigger AEC firms are staying “platform neutral,” to meet the needs of any client.
Let’s be clear about one thing: BIM is merely another tool. It will not turn your computer into a thinking machine. Fluency with Revit or MicroStation or ArchiCAD will not magically transform a 24-year-old architectural intern into a skilled, knowledgeable HEALTHCARE designer. Nothing replaces real-world experience, working on site in real hospital projects.
That’s one reason why I think that BIM represents a golden opportunity for the design and construction professions: one where cross-generational teams could work together to maximize the power of this exciting new tool, with younger staff members bringing their fluidity with new technology, their absolute lack of fear of software, and older staff members contributing their years – even decades – of wisdom to shape truly outstanding projects.
INTEGRATED PROJECT DELIVERY
The other important innovation is IPD, or integrated project delivery. As we shall see, you can “do” an IPD project without BIM, but BIM will be used more and more to enable Building Teams to meet the demands of any well-constructed IPD agreement.
IPD is the next generation of project delivery, following closely upon the heels of CM-at-large, Design/Build, and LEAN construction.
But IPD goes beyond these other delivery methods in that it binds the parties into a tightly knit contractual arrangement where risk and reward are truly shared. IPD goes well beyond collaboration and team building, too.
Two weeks ago, I attended a meeting in Richmond, at the offices of the KLMK Group, an owner’s representative that specializes in healthcare.
The principals of KLMK, John Kemper and Bill McMahon, have assembled a distinguished group of healthcare design and construction professionals – some of whom are here today - along with lawyers and insurers, to develop a “best practices” manual on IPD.
Let me tell you, this stuff is complicated. IPD has less to do with the actual design or construction process than it does with how the parties will share risk in a binding agreement. Negotiating the insurance component of an IPD agreement is extremely complicated, but handled right, it can be the catalyst that breaks down barriers between the parties and establishes real trust to get the job done right.
Any conversation that mixes the sexy allure of insurance documentation with the scintillating pizzazz of contract law sounds like it could be pretty dreadful, and from what I have learned, these negotiations can get pretty intense. Doing IPD right takes a lot of work up front, but it can be worth it in the long run, especially for complex HEALTHCARE projects.
Not to mention that your healthcare clients are going to be asking for IPD in the future. They will see IPD as a way to hold down costs, control risk and uncertainty, and eliminate – not just reduce – haggling and lawsuits between the Building Team members. That’s the VALUE PROPOSITION they’re going to be looking for in choosing Building Teams for future projects.
Where, then, are we headed with BIM and IPD?
We’ve been devoting a lot of attention to BIM in BD+C and in our blog, BuildingTeam360, where our Senior Associate Editor, Jeff Yoders has been making a name for himself as our very own “BIMBoy.”
In my opinion, BIM is getting a lot of attention because it’s new and sexy and gee-whiz, and you’ve got all those bright colors that make for great client presentations, and because YOU want to know about it!
Many architects like BIM for its ability to integrate with other software, such as Google earth for topographic analysis, or Ecotect for daylighting and sun shade analysis.
The structural engineers love BIM for its ability to detect clashes and produce files that flow right into materials fabrication.
The contractors see it as an opportunity to be more engaged in projects at an early stage.
The orphans of this perfect technological storm are the lowly MEP engineers, who have been left out to soak in the rain when it comes to BIM. The MEP component of BIM has been lagging, to say the least.
I’m proud to say that my company is helping to solve that problem. We have formed a joint venture with TME Engineering, headquartered in Little Rock, to incorporate their MEP BIM technology into our Reed Construction SmartBIM Library. It may not be a giant leap for mankind, but it is one small step in the right direction for BIM.
Let’s not fool ourselves: BIM is going to be a lot more demanding to implement in your daily workflow than the vendor ads would imply.
Based on past experience with CAD, it is likely that BIM will probably take at least a decade to be fully operational in most large-scale architecture firms.
But make no mistake: BIM is here to stay. I wouldn’t wait: the early BIM adopters may suffer through some nasty growing pains, just as the early adopters of green building and LEED did. And those who struggle through the learning curve will have an advantage when HEALTHCARE clients start asking about “that BIM thing” they’ve been hearing about.
BIM is the fun tool, but IPD is going to be the workhorse of future healthcare projects, especially for anything over $100 million.
Sutter Healthcare has been forging ahead with IPD. Presumably, they see it as a way to control construction costs and get an edge on their archrival – you know, the one with the acronym that sounds like “Kitchen Police.”
But a number of other true IPD healthcare projects are coming online, one as small as $20 million, another at $50 million, and a biggie in the $400 million range. Your clients are going to start demanding IPD agreements.
It’s the only way they can be sure of a positive, noncontentious outcome to their big projects. In the coming years, IPD may be the only way you will be able to the meet the VALUE PROPOSITION needs of healthcare systems owners.
So, if you get one take-away from this talk, it is this: “Now is the time to get hip to IPD.”
Let’s consider the OPPORTUNITIES in Healthcare.
Becoming expert in BIM and IPD is one opportunity for your firm can distinguish itself from the crowd.
Another immediate opportunity lies in stimulus funding for US Military and VA healthcare facilities.
• The stimulus set aside $150 million for VA for long-term-care facilities, which could generate $225 million in projects.
• There’s also $399 million for energy efficiency projects, and $601 million for “nonrecurring maintenance” projects.
• For the Defense Department’s Military Health System, there’s $1.3 billion in stimulus bucks, including $563 million for a Naval Hospital at Camp Pendleton, and $621 million for a replacement hospital at Fort Hood, Texas.
Unfortunately, if your firm isn’t already on top of most of the VA and DOD stimulus dollars, you may be too late to cash in.
The good news is that DOD is forecasting that its “medical spending” will increase to $64 billion by 2015, so may want to look to the military for your next HEALTHCARE opportunity.
DOE ENERGY COALITION
Another opportunity may be with the Department of Energy’s new “Hospital Energy Alliance.” This is a coalition of healthcare providers representing 17% of the total U.S. hospital market, who will be looking at ways to reduce the $5 billion American hospitals spend each year on energy.
If you do business with any of the following hospital systems, you’ll want to learn more about this program. In addition to the American Society for Healthcare Engineering, the partners in DOE’s Hospital Energy Alliance are the Veterans Administration, HCA, Kaiser Permanente, New York-Presbyterian, Catholic Health Care West, Gunderson Lutheran, Providence Health of Seattle, Texas Medical Center, and the University of Pittsburgh Medical Center. More hospital systems are expected to join.
You can help these clients meet the DOE’s goal for “Energy Smart Hospitals” of a 20% cut in energy costs for existing hospitals, and 30% reduction in energy use for new construction.
I haven’t even mentioned CLIMATE CHANGE. As you know, the next round of international meetings on climate change comes up in five months, in Copenhagen. Unlike our hands-off stance regarding the Kyoto Protocol, the Obama Administration has committed the U.S. to taking an active role in the development the next protocol.
Climate change is an exceedingly complex topic, as evidenced by the 2007 UN Intergovernmental Panel on Climate Change report, whose 3 volumes come to 2800 pages and weigh nearly 19 pounds.
Happily for you, we at Building Design+Construction last year wrote a White Paper on “Green Buildings + Climate Change” that condenses everything you wanted to know about greenhouse gas emissions – but were afraid to ask (boy, does that line date me!) – into 64 eminently readable pages.
Climate change is a healthcare issue – not just for the poorest countries of Africa, Asia, and Latin America, but for the U.S. and Europe as well.
Climate change is going to climb ever higher on the agendas of forward-looking healthcare systems like Kaiser Permanente and Mayo and the Cleveland Clinic and many of the university-based healthcare providers.
Healthcare design firms that take a leadership role in understanding how to combat climate change in their healthcare projects – through adaptation, mitigation, and environmental improvement – will gain a strong position with leading-edge hospital clients.
NEXT 100 MILLION
Finally, I’d like to talk about what demographers are calling “The Next 100 Million.” The Next 100 Million Americans will be a boon for architecture firms. Here’s what is meant by this term:
It took until 1915 to reach our first 100 million population, but just 53 years (1968) to get to 200 million, and only 39 more—till October 16, 2006—to top 300 million.
The Census Bureau says we’ll reach 400 million by 2043, but more reliable predictions suggest we’ll add the next 100 million Americans as early as 2037—that is, in only another 28 years.
These figures are from a remarkable report by Arthur C. Nelson and Robert E. Lang, in the January 2007 issue of Planning, the magazine of the American Planning Association. The authors, co-directors of the Metropolitan Institute at Virginia Tech in Washington, D.C., note that, among industrialized nations, only India will add 100 million people more quickly than the U.S.
It is the composition of the next 100 million that’s truly interesting. One factor will be the percentage of single-person households in the U.S. In 1970, one-person households represented only 17% of U.S. population. As of 2006, single-person households constituted 26% of the population, an they are expected to stay at 26% through 2037.
Equally interesting is what is happening to households with children. In 1970, they were 44% of the population. By 2006, they had declined to 35%. In 2037, households with children will represent only 27% of the population.
This means that by the time the next 100 million are in place, the scales could be nearly balanced: 26% one-person households, 27% households with children.
Accompanying this shift is the aging of the population, a trend in which I personally hope to participate, considering the alternative.
In 2006, 29% of Americans were under age 20. By 2037, this group will constitute only 19% of the Next 100 Million.
In 2006, 59% were in the age 20-64 bracket. Their share of the Next 100 Million will fall to 40%.
The big burst will be among the 65 and older group. In 2006, they were a mere 12% of the population. If you’ve done the math in your head, you will already have calculated that “Seniors” will constitute 41 million of the Next 100 Million.
For the U.S. as a whole, under-20s will drop from 29% in 2006, to 27%, and the middle group, 20-64, will decline from 59%, to 54%.
But the 65 and older crowd will leap from 12% in 2006, to 19% in 2037. More than a third of these will be living alone – that’s going to be a lot of widows in need of hip replacements.
In California, the population will increase 37% by mid-century, but the 65-and-up group will have grown 150%, according to Andrew Scharlach, PhD.
By 2050, there will be more Californians of retirement age than children under age 18, and the fastest-growing segment of the population will be those 85 and older, who will have grown by 250%!
The 65 and over group are a medical goldmine:
• 84% have a chronic condition.
• 62% have more than one chronic condition.
• 80% are overweight or obese.
• Half need help with so-called “activities of daily living.”
• 25% have 15 or more medical interactions per year.
The shock waves that will emanate from these demographic upheavals will reverberate throughout the built environment. By 2037, the U.S. will have to build 70 million housing units—30 million new, 40 million replacement units—to keep pace with the growing population.
On the nonresidential side, Nelson and Lang predict that 30 billion square feet of new construction and 70 billion square feet of replacement construction will be needed.
One hundred billion square feet in new commercial, industrial, and institutional buildings—that’s more than the 87 billion sf of existing nonresidential space. In other words, America will have to be completely rebuilt in the next three decades.
That’s going to require $30 trillion in residential and nonresidential construction and another $5 trillion in infrastructure improvements, the authors say.
Now we’re really talking “stimulus.”
What does all this mean in terms of healthcare?
Just as the population is aging, so, too, is the hospital infrastructure. Many of the 3,000 or 4,000 hospitals in the U.S. are over 40 years old and are either obsolete or obsolescing. They’ve got to be reconstructed or replaced, which is going to mean more business for your firms.
The Second America will be greener – by mandate, not choice. Hospitals and other medical facilities, whether public or private, will be REQUIRED by state and local governments to be much more energy- and resource-efficient. Water conservation will be hugely more top-of-mind than it is today.
In fact, our 7th White Paper on Green Building will be on the topic of water use, abuse, reuse, and conservation – it will be out in November.
This “Second America” will be denser, not just to accommodate the next 100 million, but also because many of the growing number of older persons and singles – and, of course, many older single – will want to live in or near cities, or be forced to live there by economic or social factors.
How will the healthcare system deliver services to these individuals, many of whom will be widows in frail condition, with limited mobility, barely subsisting on fixed incomes? That’s a future we as a nation are going to have to grapple with.
In conclusion, therefore, I would like to ask you to reflect on something I wrote in Building Design + Construction a few years ago and which I return to now, in slightly edited form:
“Of all major building projects,” I wrote at that time, “hospitals are unique, not just for their complexity — the vast amounts of high-tech equipment, the mountainous record-keeping systems, the maneuvering of thousands and thousands of employees, patients, and visitors, the grueling 24-hour schedule — but also because those who walk through their doors, patients and their families, are in dire need of help.
“Hospitals,” I went on to say, “are sacred places where life begins, where life is often made better, and where[, sadly,] life may end. The gravity of that mission imposes a unique burden on those who design and build hospitals, a responsibility to make these institutions places where core human values [must be] vigorously respected [and upheld.]”
All of you in this room share in that responsibility. Through your many years of study, hard work, and practical experience, you have earned the PRIVILEGE of designing these venerable institutions, so full of life and hope.
With privilege, however, comes responsibility. As you complete your stay here in Chicago and return to your homes and workplaces, I trust you will continue to do your best to honor that sacred duty.