Dayton reaps gains from hospital building boom

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Dayton reaps gains from hospital building boom

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Construction continues on Dayton Children’s Hospital’s new eight-story, 260,000 square-foot patient tower.

The Dayton area has been a hotbed of hospital and health-care related construction recently with at least five major projects planned or nearing completion and generating growth for a local economy continuing to fight back from the Great Recession.

Experts say the metro area is a prime market for building new facilities and expanding health care services because of its aging infrastructure and population, which is expected to see unprecedented growth over the next decade with those 65-and-older accounting for 22 percent of the state’s population by 2030, according to a recent report from Miami University’s Scripps Gerontology Center.

Keeping up with demand has led to steady construction of new patient towers, cancer centers, and emergency departments across this region.

Nationwide, there are at least 1,340 projects underway or in the planning stage valued at $97 billion, according to a recent report from Revista, a Maryland-based health care real estate research firm.

Locally, hospital construction has been booming for several years as major hospital networks continue to pour hundreds of millions of dollars into projects directly benefiting architects, construction firms, suppliers and others.

“The commitment to Dayton that Kettering (Health Network), Premier Health, Dayton Children’s Hospital and Springfield Regional Medical Center have made is really a huge benefit for our region,” said Bryan Bucklew, president and CEO of the Greater Dayton Area Hospital Association. “Not only does it provide high-quality care, it’s also a major economic engine for the area.”

The list of local projects includes:

• Dayton Children’s construction of a new $141 million, eight-story patient tower slated to open in the spring next year on the hospital’s main campus near downtown.

• Kettering’s $53 million, 120,000-square-foot comprehensive cancer center opening later this month across the street from its flagship Kettering Medical Center.

• And, Premier Health just last week announced plans for a $60 million expansion at Miami Valley Hospital South in Centerville, expected to be completed by 2018.

Chris Hopper, vice president and account manager at Skanska USA Building Inc., said hospital construction has accounted for more than a third of the $1.1 billion in revenues the company has generated in southwest Ohio since opening for business here 12 years ago.

And Dayton-based Premier has been one of its most lucrative clients.

“They’ve been an amazing client and account for a large portion of our portfolio,” Hopper said, noting that Premier projects have generated more than $400 million of the $600 million in health care construction work the company has done in southwest Ohio.

Business has been so good that the New Jersey-based firm opened a permanent office in Cincinnati about five years ago.

“We didn’t have an office in southwest Ohio before that, and we’ve grown exponentially since that time,” Hopper said. “We’re a national company that does all sorts of construction. Other industries can be up and down, but health care has remained steady for us.”

Randall Fox, executive director of the Dayton branch of the Associated General Contractors of Ohio trade association, said, overall, health care construction accounts for about 20 percent of revenues for its 75 local members.

“That’s a pretty significant share,” Fox said. “Health care is extremely important and vital for our industry.”

Hospital officials say new state-of-the-art facilities will help them fulfill their mission of providing high-level care closer to home.

“Our decision to construct new facilities is made with careful thought and research of community need,” said Fred Manchur, Kettering’s CEO. “We want residents in our 16-county service area to have better and faster access to quality health care. We consider many factors including population growth and shifts, and increases in health issues in a particular community.”

The new facilities have the added benefit of attracting top-notch doctors and specialists, who in turn will bring more health-care dollars to the community and keep more health-care dollars here, according to Craig Self, Premier’s chief strategy officer.

“We’ve been able to recruit 10 neurologists to the Premier Health system in the past nine months,” Self said. “They have a lot of choices. They can go to places where there are beaches and mountains, but they come here because of the new facilities and investment.”

Over the past three years alone, Premier spent approximately $150 million on construction, while Kettering spent more than $50 million in the past five years.

The investment in new facilities has been a boon for overall employment in the Dayton area as well, according to Bucklew: “Right now, there are 33,000 individuals who get a paycheck every week from a hospital in the nine-county Dayton region, and nonprofit hospitals in the Dayton region have an $8.1 billion dollar economic impact — not including construction spending.”

And that’s just the tip of the iceberg, according to data from the Ohio Department of Job and Family Services, which shows the number of residents in the area employed in health care and social assistance has grown at more than twice the rate of job growth in the overall economy.

Nationally, health care occupations and industries are expected to have the fastest employment growth and add the most jobs to the economy between now and 2024, according to the U.S. Bureau of Labor Statistics, which projects the sectors to add 2.3 million in employment, representing about one in four new jobs.

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