Texas & Louisiana's 2016 Owner of the Year: Memorial Hermann Health System
With 14 hospitals, five convenient care centers, more than 24,000 employees and 5,500 medical staff, all within the greater Houston area, Memorial Hermann Health System’s presence in the city is well-rooted. Founded in 1907, Memorial Hermann has become the largest not-for-profit health system in Southeast Texas and is ranked as one of the top five large health care systems in the country by Truven Health based on patient safety and quality.
The system is in the midst of an extensive expansion program, dubbed the “Breaking New Ground” project. It includes five major construction and renovation projects aimed at meeting the health care needs of the new residents Houston has attracted as its economy has been bolstered over the last five to seven years by the bounty of oil and natural gas.
For its efforts in bringing quality health care to the entire greater Houston area by adding new locations and services, as well as its reputation among the local construction community, ENR Texas & Louisiana has selected Memorial Hermann Health System as its 2016 Owner of the Year.
“Breaking New Ground”
Back in 2007, Memorial Hermann celebrated its 100th anniversary with what was then called the Century Project, which included almost $1.5 billion worth of work across greater Houston, explains Marshall Heins, senior vice president and chief facility services officer with Memorial Hermann.
Then almost three years ago, Memorial Hermann began looking at doing a new round of work—just under $2 billion of physical plant improvements scattered through the Houston market area.
Breaking New Ground is the largest multi-construction project initiative in Memorial Hermann’s history. Five projects in Cypress, Katy, Pearland and Sugar Land and at the Texas Medical Center will be completed between 2014 and 2020. The Texas Medical Center project, which broke ground in May 2015 and will be complete in 2019, is the largest at $650 million. The expansion adds a new tower to the system’s main teaching hospital campus.
It is also the most challenging of the projects “because we’re trying to build in and around a very defined campus that has buildings that date back to the 1920s,” Heins explains. “So you’ve got a 1920s building, a 2000 building, a 1990 building—and we’re trying to slip this giant new tower right in the middle of that.”
In addition, the center serves as headquarters for Memorial Hermann’s Life Flight—the only hospital-based air ambulance serving Houston and surrounding communities—and one of Houston’s two Level 1 trauma centers. “We have to keep everything working around there and not interrupt our own teaching hospital, and build this giant 17-story tower that’s over a million square feet. Then we also have to not disrupt access to the Texas Medical Center,” he adds.
Part of Memorial Hermann’s strategy involves building up its campuses in phases, from urban infield areas to brand new rural communities. The provider typically develops on new greenfield campus sites, typically 30 to 35 acres to allow for future expansion. They select locations along a main thoroughfare or transportation artery, and program growth in three or four phases.
These types of campuses typically begin with a convenient care center, one medical office building, then an acute care hospital of around 110 beds, Heins says. “Then as years go by, we’ll add a second medical office building, a second bed tower and so on. So we’ve got many campuses where that model has worked well for us. Some are still in the first phase just coming out of the ground,” he adds.
On March 29, the new 250,000-sq-ft hospital in Pearland opened. “This was a $60-million hospital that was about a 17- to 18-month schedule, so it was fast and furious,” says Danny Thompson, Vaughn’s project director for the hospital.
Meanwhile, a 230,000-sq-ft, six-story patient tower opened in Katy in January—the system’s second bed tower in that location. Memorial Hermann also added a second office building, putting that campus in Phase 2 of expansion, Heins explains.
A 45,000-sq-ft convenient care center opened in Cypress in February. These types of facilities help Memorial Hermann deliver care close to communities without building a full-blown hospital.
Under Breaking New Ground, a total of six medical office buildings are almost finished. The final MOB broke ground back in February in The Woodlands, north of Houston.
When Breaking New Ground began in 2014, construction costs were on the rise, so teams had to come up with new ways to try and mitigate those increases. For example, Memorial Hermann turned to tilt-wall construction for some of its hospitals, including those recently completed in Pearland and Katy.
The Katy hospital, which opened in January, is the tallest hospital in the U.S. built using tilt-wall construction, according to project architect FKP Architects.
Another cost-control strategy that Memorial Hermann uses almost exclusively is a competitive bid delivery method, taking projects to full design and completion of construction documents so contractors know exactly what they have to build.
“The other thing that I think is extremely important is standardization,” Heins adds. “For keeping the cost of health care down and keeping the facilities as new, as high-quality and as long-lasting as possible, standardizing and coming up with best practices have really been beneficial.”
Using existing designs for medical office buildings, for example, Memorial Hermann can tell a contractor or architect to take those designs and make the building fit to a new site.
Memorial Hermann is seen among the construction and design community as a very loyal client. “They have a high standard of quality both on the design and construction side and high level of expectation that quality will be delivered,” Thompson says.
Companies in the local area are also “waiting in line” to present their credentials to work for Memorial Hermann because they are a highly desirable client, adds Bill Ganshirt, principal with WHR Architects. “They have a real focus on hitting the budget and hitting the schedule. Once you’re in that part of the process, the scope rarely changes.”
Memorial Hermann also builds locally, turning to firms in the Houston area. “We probably accomplish 90% of what is required to be LEED certified, but we’re not going to spend the money just to get certified LEED Platinum or Gold just because we have to have it. We’re trying to be good stewards of the community’s money,” Heins says.
For the third year in a row, Memorial Hermann was named Energy Star Partner of the Year for its health care energy management programs.
Moving forward, the system has plenty to complete in the Breaking New Ground program, with the Texas Medical Center project still two and a half years out from completion.
“We still have a couple of hospital expansions to complete, a few more office buildings to build, and you never know what’s next,” Heins says. “We’re going to grow with Houston, and we’re going to go where Houston needs us to go and take care of the population that lives here.”