Kansas City's Healthcare and Construction Boom

An unprecedented healthcare boom is driving area construction despite the fact that medical institutions are struggling to keep their heads above water. One example is the area’s largest general contractor and organization most engaged in building these facilities, J.E. Dunn Construction. In the last few years J.E. Dunn has increased their firm-wide portfolio to 40% in healthcare, compared to the previous average of 25% in this sector.

Most area hospitals have spent hugely on new construction, additions and renovations, the last of which are often far more expensive than new construction, this in a market in which building is relatively expensive.

HCA has spent literally hundreds of millions in facilities and construction since they acquired Health Midwest. This includes the $270 million CenterPoint Medical Center in Independence, HCA’s largest investment in a facility anywhere. They are also spending nearly $100 million at the Research Medical Center campus. The University of Kansas Hospital just spent $77 million to build the newly opened Center for Advanced Heart Care—this is only one of several development projects underway on that campus. And the list goes on.

This construction boom will likely continue into the foreseeable future. Baby boomers are turning 60, and they will do for healthcare in this coming decade what they did for bell-bottoms and disco in the ‘70s.

For all the investment in facilities, however, hospitals, both for profit and not-for-profit, struggle with budget busting variables—increased technology costs, worker shortages, a slowing economy, shrinking margins, physician relationships, increased customer demands, relentless legal costs.

The question then is why all the investment? The answer is as complex as the system itself. Despite the corruption of any real free market principles, healthcare remains an extremely competitive enterprise. The customers—and these include physicians as well as patients—continue to insist on the best. The HCA investment in Research, as a case in point, was driven by the need to retain its doctors.

The November election on Missouri Amendment 2, the Stem Cell Research and Cures Initiative, will go a long way to determine whether KC remains a hotbed for healthcare expansion and the life science movement.

If the stem cell amendment passes, momentum will surely build and the region should enjoy a groundswell of interest for research-related investment. If it fails, many organizations will look elsewhere, if we’re lucky to Kansas, but elsewhere in any case. It is unlikely that the Stowers Institute would leave the area, but it is unlikely too that they would continue to invest as much in a region that hinders research advancements.

Ideally, the area’s tech-related healthcare organizations will flourish with the life science movement. Cerner is a good example. The company is filling its North Kansas City campus, has moved into the former Farmland facility on North Oak, has converting the old Sam’s Town Casino into an off-campus facility, and most recently, purchased the former Aventis/Marion Laboratories campus to expand. If Amendment 2 passes, it will create the environment for more companies like Cerner to establish and build operations here. It just might be the healthcare technology industry that drives the future of our region.

A great deal is riding on the voters in the November election, including the very future of healthcare and related technology-based investment in the life, plant and animal sciences. The KC area could find itself as the darling market of America, a lure for leading physicians and researchers the country over, or it might be forced to rethink its very role as a life science center.

We’ll know soon enough.

Regards,

Editor-In-Chief & Publisher

Editorial@IngramsOnLine.com