As Healthcare Supply-Demand Gap Grows in Austin, Lean Construction Methods Take Center Stage

by Taylor Williams

By Jake Snyder, director of preconstruction, Hoar Construction

Thanks to its rich culture, technology-friendly atmosphere and eclectic music scene, Austin has blossomed over the past decade into a hotspot for businesses and residents alike that are seeking to ride the wave of the city’s phenomenal growth story.

Just last year, the U.S. Census Bureau reported that Austin is the fastest-growing major metro area in the country, posting a 3 percent increase in population between 2020 and 2021. Pair that recent growth with a global pandemic, and you have an urgent need for increased healthcare development to accommodate the number of people moving into the city.

Jake Snyder, Hoar Construction

Jake Snyder, Hoar Construction

However, as with most other facets of commercial real estate, construction took a proverbial uppercut blow from COVID-19. Project delays, price hikes and material shortages have made every aspect of the construction life cycle more difficult, but not impossible.

According to Associated Builders and Contractors, nearly 650,000 additional workers are currently needed to meet the demand for labor on construction sites, while an estimated 1.2 million will leave their jobs this year to work in other industries. A recent report from labor market research firm JobsEQ also found that the Austin area could be short by as many as 3,000 trade partners over the next 10 years.

With these competing factors at play, what can be done to ensure that Austin’s healthcare infrastructure stays up to speed with this rapid growth?

One answer lies in lean construction and the industry’s efforts to make construction processes more efficient. This ensures that project timelines are as predictable as possible, labor shortages can be accommodated and challenges with procurement can be addressed head-on. Prefabrication and modular construction are two lean construction methods that have become increasingly popular in the industry and have been shown to reduce the amount of time and waste on a project.

Introducing Lean Construction

Modular construction is a method wherein an entire unit of a building is constructed offsite at a warehouse, with electrical, plumbing and design finishes usually installed at the facility.

The broader prefabrication category simply refers to a process in which select building elements are put together either offsite and then shipped to the final job site for installation or put together onsite before installation. Overhead MEP rack systems arrive ready to go from prefabrication facilities, for example, or exterior walls can be prefabricated on the same deck where they will be later installed.

Both methods are useful practices in addressing scheduling uncertainties, labor shortages and procurement issues, particularly in dense, urban environments where the inflow and outflow of people and materials can be challenging.

Healthcare is one of the leading sectors that has embraced modular construction and prefabrication in recent years, utilizing the practices on nearly all aspects of the hospital environment. From surgical rooms to maternity wards and even bathrooms, lean construction can deliver to the standards that healthcare professionals require in the shortest amount of time possible.

During the preconstruction phase of a recent healthcare project in Austin, we identified challenges in the labor market as a major hurdle to meeting our client’s timeline. We found multiple opportunities for modular construction components of the building — including the building’s exterior skin — that allowed us to shift work to offsite trade partners who could complete the work within our schedule.

The components were then delivered just in time for installation, with fewer trade partners needed onsite. Saving significant time in project delivery with these modular components, we were able to build the headwalls four months faster, the exterior skin and bathrooms two months faster and the MEP racks one month faster than with a traditional construction method.

Because healthcare projects typically involve ongoing construction while most hospital functions are still fully operational, there’s a heightened sense of awareness for patient and staff safety, particularly around construction traffic and materials storage and delivery. However, sourcing a large portion of work offsite with modular and prefabrication strategies can also ease many of those concerns. Some projects have reported moving nearly 80 percent of construction activity to offsite locations.

Supply chain issues have impacted all sectors of construction, but with healthcare specifically, the importance of speed to market for finished projects means contractors have to look extra hard for solutions to combat this uncertainty. When the owner, design team, contractor and trade partners collaborate early on to release critical path design packages and lock in pricing, some of these challenges can be mitigated.

Modular and prefabricated strategies fit perfectly into this timeline and provide more certainty for component pricing and delivery because they’re typically planned for and agreed upon before sitework has even begun. We’ve also seen healthcare clients use the same modular designs and components for multiple projects across the country, which reduces costs for bulk ordering that are then prioritized for on-time delivery.

Playing Catch Up with Austin’s Rapid Population Growth

Hoar Construction has played an active role in the growth story of Austin’s landscape over the past decade. Our team has seen firsthand the benefits and successes that come with implementing these lean construction practices.

With expedited timelines for crucial healthcare projects using prefabrication, we have received overwhelmingly positive feedback from our partners and healthcare clients on how smoothly and efficiently the projects have proceeded, a key factor in why more healthcare systems in Central Texas are now requiring proposals that at least present options for prefabrication techniques.

Beyond improving the speed to market for new healthcare projects, modular construction also adds more predictability, quality control and improved safety that may not be as easy to achieve at a traditional job site. Lean construction, particularly modular and prefabrication, alleviates the stress of the unknown so the final product meets all the standards. With components built in a more controlled environment, quality checks are simplified, and with fewer workers required on site, safety concerns are more readily addressed.

Even though many of the pandemic’s after-effects are now subsiding, lean construction will continue to grow in influence as more general contractors and healthcare providers realize the overall benefits for improving the quality of work within healthcare construction.

Austin’s growth shows no signs of slowing down anytime soon, and key stakeholders will need to make appropriate accommodations to ensure there are enough high-quality health facilities to meet the demand of the region’s burgeoning population.

The solution remains clear — lean construction is the missing puzzle piece that will balance the scales between supply and runaway demand, ensuring Austin’s healthcare system is fully equipped to meet the challenges of the next decade and beyond.

This article originally appeared in the July 2022 issue of Texas Real Estate Business magazine.


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