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Banner Health Touts $1.2B in Active Construction Projects

Banner MD Anderson Cancer Center. Rendering credit: HKS Architects

AZBEX ProfilesBy Luci Scott for Arizona Builder’s Exchange

Phoenix-based Banner Health, one of the largest non-profit hospital systems in the country, has 275 active projects under way worth $1.2B.

“We have really big projects coming up, which we’re planning now, and that’s the merger with the University of Arizona Health Network,” said Kip C. Edwards, Banner’s vice president, development and construction.

The merger will result in Banner’s $500M investment in Tucson over five years, including a new hospital building on the University Medical Center campus, plus a number of ambulatory facilities in Tucson.  (AZBEX, June 27, 2014).

In Phoenix, the biggest current project is a building for an emergency department at Banner Good Samaritan Medical Center, which will be renamed on Feb. 27 to Banner University Medical Center-Phoenix to reflect Banner’s merger with the UA Health Network.

Banner likes to work with proven contractors, so the company uses a pre-qualified list of architectural firms and general contractors.

“For any given job, we will solicit about five proposals – typically we do CM at risk – and we reduce that to a short list, interview three and select one for the project,” Edwards said.

Banner has multiple teams in the Valley, and to save potential contractors time searching for jobs, Banner hosts an annual meeting, scheduled this year in late February, to which the invitees are general contractors, architects and engineers on the list.

Each Banner team presents its upcoming projects, and professionals and contractors mark a checklist to identify the jobs they’re most suited for, taking into account their resources, skills and people available, and they need to be discerning.

Checklist decides RFPs

“We use that checklist to decide who will receive which RFP,” Edwards said. “I tell people if they check all of the projects off, I’ll throw it away.”

Seventy percent of Banner’s hires are done with this system; the other 30 percent of projects pop up throughout the year.

Edwards looks for firms that that deliver at the right cost, safely, and in a health-care environment without disruptions.

“I want a firm … that anticipates things before they happen and solves them,” he said.
He also looks for a high level of sophistication from a GC, particularly on large projects where firms work in an integrated project delivery format. The GC brings in the subs and actively participates during the design so issues are resolved before construction begins.

Edwards juggles these projects amid an atmosphere of extreme cost pressure.

“We continue to press for more economical ways to create quality health-care facilities, and I think that pressure is going to increase in the coming year,” he predicted.

Workload is up; staffing is not

The project workload is way up but staffing is not; Banner is doing 50 percent more project work now than a few years ago, so Edwards is constantly looking for efficiencies.

That includes his system eBuilder, which allows the company to automate work flows, and his propensity for looking for efficiency.

“We look at what we do from time to time and ask ourselves, ‘Are there things we don’t need to do to gain efficiency?’“

The biggest trend is that health care, he said, is a focus more on maintaining health and supporting well-being and less on curing illness.

“We’re moving away from what I call a sick-care system to a true health-care system, with a focus more on health of the population. … It’s really what health care needs to become, not what it’s been. It will flip the whole equation.

“What that means to facilities is we will be building a lot of outpatient facilities that move health care into the communities we serve.”

“Hospitals will always be part of the system, and we’re investing in those, but we are investing a lot in moving health care closer to the community, making it more accessible, and we’re preparing for that next big shift in health care.”