Prefab Construction Will Change the Healthcare Business Model

Healthcare is moving away from a direct ownership model and toward aggregation with a cohort of operators contributing to a single facility. Aggregation, in general, has become popular in the last decade, with companies like Airbnb, Uber and even Amazon focused on connecting supply with demand rather than owning and selling goods.

“This is an approach to organizing things that is really about aggregation more than ownership,” Stan Chiu a principal at HGA Architects & Engineers, tells GlobeSt.com. “Companies like Amazon, Airbnb and Uber have a business model that is about connecting needs with people. Prefabrication really lends itself to that. We are at a place in time culturally where we are able to do an Airbnb-type model for healthcare.”

Healthcare owners and operators have been moving toward prefabrication or modular construction as a way to, first, save on construction costs, but, more importantly, to save on operations costs—which can be crippling to healthcare providers. The standardization that comes with prefabrication makes it easy to have one company manage patient beds, another bathrooms and yet another company will handle the OR. “We are able to handle this kind of complexity and the interface between those connections is really important,” says Chiu. “We are able to handle this in a way that we weren’t 15 years ago.”

This isn’t to say that there is no longer owns to property, but that there is now a set of companies managing construction and operations within the building, each overseeing a different segment. “The owner would still own everything, but instead of hiring one architect and one designer, the process is getting more complicated,” says Chiu. “The rule of design really changes too when they make decisions, and we are able to track that complexity better now than we were earlier.”

Prefabrication is rapidly growing in popularity and for massive projects. In San Francisco, Chiu recently completed a prefabrication hospital. The project was built in two segments offsite. He is also working on Greenfield Hospital in Wisconsin, which at 300,000 square feet he says will have “even bigger prefab goals.”