HOUSTON – With more than $3 billion in construction projects under way, Houston’s Texas Medical Center is the largest life sciences destination in the world. But that’s not all. Construction of medical facilities in Houston is booming, with medical office buildings being built around town as well as expansion of Memorial Hermann, Houston Methodist and Baylor College of Medicine in the Bayou City suburbs. Houston-based Arch-Con Construction, a full service general construction company, recently named Evan Alford to lead its Healthcare Division. Alford, who has spent more than a decade in healthcare construction at McCarthy Building Companies, has worked on projects including the University of Texas MD Anderson Cancer Center’s $240 million Alkek vertical expansion and renovation as well as the University of Texas Southwestern Medical Center’s $27.8 million Laboratory Research & Support Building in Dallas. Realty News Report sat down with Alford to find out more about the boom in medical construction in Space City.
Realty News Report: You’ve been named to head Arch-Con’s healthcare division. Why is Arch-Con making a major move in medical construction now?
Evan Alford: There is a significant need for construction services in Houston to keep pace with the demands of the world’s largest medical center, a thriving aging population, a continued movement of major health systems establishing themselves in the suburbs and the Texas Medical Center’s (TMC) vision of a new research campus called TMC3. Arch-Con’s Healthcare Division is nearly five years in the making and I am happy to be a part of meeting these healthcare needs.
Realty News Report: The division’s focus will be on hospital systems, medical office buildings and specialty care centers. Can you provide some examples of current or future work?
Evan Alford: We are actively discussing opportunities with several of the healthcare systems within the Texas Medical Center as well as their satellite campuses. We will continue working with these potential clients to determine how we can best assist them as they upgrade, expand and grow their organizations throughout Houston and the surrounding areas. We will also continue our efforts within the private sector, currently working on opportunities in Pearland, Webster and Katy. We feel that as the major healthcare systems move into the surrounding cities/suburbs, the market will dictate that these practices continue to upgrade and expand.
Realty News Report: You have said “Arch-Con is a different kind of contractor?’ Can you explain?
Evan Alford: Arch-Con doesn’t only think like a contractor, it has the mindset of a partner. By assisting the project team at an early stage of the process, we can create accountability by the entire team to accomplish the desired project goals. This early involvement philosophy is particularly critical in the healthcare industry and is a driver in why I am so excited to lead the Healthcare Division for Arch-Con. Often, patients are witnesses and, at times, unwilling participants in the construction process and so their care during the project is critical. We have systems in place to ensure that the construction work we perform is acceptable, thoughtful and forward thinking from a patient and staff perspective.
Realty News Report: How is Obamacare impacting medical real estate construction?
Evan Alford: During inception, skepticism of the Affordable Care Act led to an initial decline in healthcare construction. However, following President Obama’s reelection in 2012, healthcare systems were forced to accept the new policies and adapt accordingly. The results have led to an increase in systems upgrades and renovations which allow greater operational efficiencies and a surge in outpatient care construction to meet the demands of a higher insured patient population.
Realty News Report: What’s happening in Houston healthcare construction? Does it involve building only in the Medical Center or all throughout Houston?
Evan Alford: Healthcare construction in Houston is and will continue to be complex, vast and incredibly dynamic. I believe there will always be a steady stream of construction within TMC’s existing healthcare systems as they are dedicated to updating their facilities – as the world’s leading medical center, they are savvy and know they have to lead by example. Due to the grand scale of Houston, healthcare systems within the TMC have been and will continue to branch out into Houston’s suburbs whether they are hospitals, associated doctor’s offices in retail store fronts, medical office buildings or emergency care centers.
Realty News Report: How do you see healthcare delivery changing – and construction adapting? Smaller hospitals? More work performed at a surgical center or expanded doctor’s office?
Evan Alford: Thanks to medical advancements and medical costs, healthcare delivery is rapidly evolving. For example, more elective, same-day surgical care is performed in ambulatory surgical centers (ASCs) and even doctor’s offices than in traditional hospitals and this trend is only expected to rise in the next decade as it is more cost-effective. Therefore, I wouldn’t say smaller hospitals but rather specialty care centers – from ASCs to imaging and diagnostic centers – are being built due to accessibility of state-of-the art medical equipment and cost-effectiveness.
Realty News Report: Are privately-owned doctors offices a thing of the past? Are docs just going to work for big healthcare systems and hospitals? What impact does that have on the construction market.
Evan Alford: I wouldn’t consider privately-owned doctor’s offices a “thing of the past.” However, over the past several years, there has definitely been a trend where practices have begun consolidating with other physicians or aligning with larger healthcare systems as a means of increasing capital, administrative and technical resources. A trend within this consolidation and alignment are physician practices opening or relocating within mixed-use or retail space to be accessible to their patients and so, from a construction perspective, we can be building out medical office spaces next to a restaurant or grocery store that didn’t typically happen 10 years ago or even five years ago.
Realty News Report: The medical sector is growing throughout the country. Is Houston facing any competition from, say Florida, or other states?
Evan Alford: With Houston having the largest medical center in the world, it is not just competing with the top medical markets in the nation but in the world. With competition comes collaboration and, at times, acquisition. These acquisitions, such as Catholic Health Initiatives’ (Colorado) acquiring St. Luke’s Episcopal Health System in 2013, are increasingly more common as the major hospital systems work to consolidate resources and strengthen their overall reach in the region.
Realty News Report: Could the healthcare industry become overbuilt like the energy sector has?
Evan Alford: With today’s rate of technological advancement, and the overall level of competition in the healthcare industry, we strongly believe that we will continue to see a trend where, as facilities become obsolete, upgrades and renovations will remain constant. Where economical, expansions to these “older” facilities will become a necessity as the industry continues to adapt to new federal healthcare policies, accommodate the increased patient demand and the need to maintain cost efficiencies.
May 15, 2016
Realty News Report is a Texas-based publication edited by Ralph Bivins.