Construction Monkey

Construction Monkey Blog

Know Productivity Losses/Gains Immediately

Three months ago, I took a stab at what I thought ObamaCare meant to Subcontractors.  In reviewing that after passage, I still agree with my thoughts in that article.  I did not address in that article, whether there would be more or less construction under the near universal health care.  I would have to agree with Jim Haughey of Reed Construction Data  that construction will not fundamentally change in volume.

So what will change?  In my opinion, you are going to see the return of the utilitarian heath care facility.  In the past two decades hospitals, ambulatory care facilities, surgery centers, and even medical office buildings have change the architectural and aesthetic approach.  There were "healing environments" created with private patient rooms, nice finishes, and state of the art facilties.  The legislation pushes more costs down on the providers like preventative and screening services and the reduction of procedure reimbursements.  If it becomes more expensive for the providers to furnish services and they do not receive more compensation, then they will have to take it out of their costs.  When new facilities do go up or there are remodels, I would expect to see designs and costs around more functional needs than the healing environments we have been seeing in the past 10 years.

With more people moving onto the government insurance plans, I would expect to see government at some point in the near future taking a more active role in construction funding.  What would this mean?  Expect more Davis-Bacon wage requirements on hospital work.  Expect longer lead times for design and expect more time during construction.

The real changes are not yet written.  The Department of Health and Human Services will have to create tens of thousands of pages of new rules, procedures, and guidelines.  I can guarantee to you that those documents will contain language that will seriously affect the construction industry.  For example (and this is purely hypothetical), if they deem that a MRI is a preventative procedure where it is illegal to charge a co-pay for it, then you will see less MRI machines in future work and probably even remodels to remove MRI machines.  The political process is by no means over and the medical lobby along with many others are sitting with HHS to draft a future that will affect most of us subcontractors.

About the Author

Craig Pierce

Craig Pierce has been working in the construction industry for the past 25 years helping subcontractors master their trade. Currently he is President of Atalanta Enterprises which provides consulting services to contractors And software solutions through