Healthcare Design - April 2022 - 20

HILE THE DEVASTATING impact that
COVID-19 has had on the U.S. healthcare
system is clear, reverberations
were felt throughout the healthcare
design industry, as well. Healthcare architecture/engineering/construction
(A/E/C)
firms made their way through a
2020 defi ned by emergency response eff orts
as providers grappled with surging patient volumes as well
as uncertainty tied to the long-term building project outlook
due to sinking healthcare revenues. However, even as
the pandemic continued its course into 2021, a rebound was
underway-and a robust one-as indicated by the results of
the 2022 Healthcare Design A/E/C Survey.
Key findings highlight growth across projects completed,
requests for proposals (RFPs) received, and contracts
signed in 2021 compared to 2020. But it's growth that's
clearly driven by where we've been, with projects guided
by issues that have emerged throughout the crisis such as
achieving flexibility/adaptability, growing revenue, and
improving population health and care access. Yet this rapid
escalation in projects isn't coming without its challenges, as
fi rms share that project team sizes aren't growing at the rate
of project volume, meaning talent acquisition and retention
remain key to moving forward. Meanwhile, issues plaguing
the building industry broadly are influencing healthcare,
including those tied to material availability, labor shortages,
and cost infl ation.
The 2022 survey was conducted online in January and
February. It was open to any U.S. A/E/C fi rm that completed
at least one healthcare project in the prior year; all fi nancial
and business data reported is from 2021. Of the responding
companies, 81 percent were architecture fi rms, 15 percent
construction firms, and 4 percent engineering. In total,
healthcare represents 46 percent of the participating
fi rms' overall business; 36 percent of respondents reported
healthcare as their primary sector, comprising 60 percent
or more of their work.
DIGGING IN
Survey respondents reported a total of 3,726 projects completed
in 2021, and 45 percent of fi rms said the number they
completed in 2021 was more than it was in 2020. Additionally,
36 percent said they saw about the same number and
just 19 percent reported fewer. Comparatively, in the last
A/E/C Survey (which was conducted in 2020 and assessed
2019 business results), 39 percent of firms reported completing
more projects compared to 2018 and 46 percent
about the same.
Meanwhile, RFPs received in 2021 skyrocketed over 2020
levels, with 60 percent of firms reporting receiving more
year over year, as 21 percent said they received about the
same and 19 percent fewer. In sum, the survey respondents
reported receiving 5,752 RFPs last year. In 2019, 43 percent
of fi rms said they had more than in the previous year, while
40 percent saw about the same and 17 percent fewer.
20
APRIL 2022
HCDMAGAZINE.COM
A total of 5,114 new healthcare contracts were reported signed in 2021
and valued at $25.9 billion; of those, 63 percent were for architectural services,
16 percent engineering, and 21 percent construction. Fifty-two percent
of respondents said they saw a year-over-year increase in contracts
signed compared to 2020, while 27 percent said theirs were about the same
and 21 percent said they had fewer. Compared to 2019, just 32 percent at
the time had signed more healthcare contracts than the prior year, 41 percent
about the same, and 27 percent fewer.
Together, the responding A/E/C fi rms reported a combined $11.3 billion
in healthcare revenue generated in 2021. Of that, 67 percent was for architectural
services, 15 percent engineering, and 18 percent construction. And
as the year closed, a reported 6,946 projects remained in progress, with
3,039 scheduled for completion in 2022.
A CLOSER LOOK
Of the projects completed by responding firms in 2021, 60 percent were
renovations versus 40 percent new construction. This represents a significant
jump in renovations from 2019, when completed projects were
split between 49 percent renovations and 51 percent new construction.
Specifically, hospitals comprised 52 percent of projects completed and
outpatient/ambulatory 36 percent, while skilled nursing/rehabilitation
and infrastructure-only projects comprised just 6 percent each-all nearly
mirroring results from 2019.
Completed projects primarily skewed smaller, as more than half of those
reported (55 percent) fell into the smallest size range of 5,000-19,999
square feet. Next closest was 20,000-49,999 square feet with 20 percent
and 50,000-99,999 square feet at 12 percent. Although projects in 2019 followed
the same pattern, they were more distributed across the ranges-for
example, in 2019, 37 percent were 5,000-19,999 square feet, 23 percent
20,000-49,999 square feet, and 20 percent 50,000-99,999 square feet.
Project values in 2021 showed similar results, as well, with most reported
on the lower end of the scale. Of completed projects, 33 percent fell in
the smallest range of less than $500,000, followed by 29 percent valued at
$1 million-$9.9 million (values are construction costs excluding land). Next
highest was $500,000-$999,000 with 16 percent of projects, while a combined
22 percent fell across remaining values of $10 million and above. In
2019, the most common value range was $1 million-$9.9 million, representing
28 percent of that year's completed projects, followed by less than
2021 PROJECTS COMPLETED
BY RENOVATION/
NEW CONSTRUCTION
RENOVATION/NEW
CONSTRUCTION
2021 VS. 2019
60%
52%
48%
40%
60%
2021
Renovation
New Construction
2019
40%
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Healthcare Design - April 2022

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