Healthcare construction is undergoing significant transformation, particularly as contractors leverage prefabrication and emerging technologies, while the sector faces uncertainty over tariffs, supply chain concerns and workforce shortages.
BY KATIE KUEHNER-HEBERT
The shift toward prefabrication and offsite manufacturing is picking up serious momentum across the sector, as hospitals and clinics are under pressure to open faster, safer and with greater cost control, said Dan Parker, vice president of sales, Wells’ Mountain States division, located in Brighton, Colorado.
On a recent Wells project, the contractor enclosed 80% of a five-story, 138,000-square-foot medical office building in just 12 days using prefabricated, single-source façade panels. The system that Wells, an AGC member, used combined a thin, lightweight architectural precast exterior with a steel frame, insulation and glazing, all pre-installed at its facility. Once delivered, the panels immediately enclosed the structure, saving time and reducing congestion on a tight site.
“That kind of speed is transformational for the construction schedule,” Parker said.
Because healthcare systems are operating on a tightrope, it’s very important to maximize their investment, and as such, more are calling for prefabrication that specifically drives cost down, said Ben Bruns, vice president of modular for Bildt, the modular company of The Boldt Group, a member of multiple AGC chapters.
One example of economical prefabrication is interior room pods. At a recent outpatient clinic in Hoffman Estates, Illinois, the Boldt/Bildt project team prefabricated 59 patient care rooms offsite at their Montgomery, Illinois facility. The walls were built and finished with drywall, paint, wall protection, wall-mounted accessories and casework before they were delivered and put in place on the project jobsite.
“Speed to market is very important to our healthcare clients,” Bruns said. “Return on investment means getting projects to a price point, but it also means delivering projects as quickly as possible so they can generate revenue.”
Prefabrication allows for greater speed, consistency and quality because factory workers follow specific instructions for each step of the process, he said. In contrast, those working in the field have additional challenges to overcome.
Consider a bathroom pod, he said.
“Some bathrooms we’re building have very tall ceilings and angled walls. This requires an odd-shaped ceiling to be installed, and it needs to be taped, finished and painted.”
In the field, a worker would require a ladder or scaffold to reach where the oddshaped sizes of drywall need to be placed. Fasteners need to hit the studs where they were framed, which may not be consistent from unit to unit.
“Imagine the same thing in our shop,” Bruns said. “We assemble that whole piece on a rack that we can spin and move around. We can do all of the rough-in on both, including lights, access panels and diffusers, and then paint, tape and finish it, and hang the rock while standing on a working surface that is safe and true.”
Sustainability
This is another big trend, Parker said. Healthcare clients are placing greater emphasis on low-carbon, high-performance envelope solutions. That’s prompting Wells to use cement-reducing mixes and lighter-weight systems that still meet demanding thermal and structural goals.
On the new Baptist Health Hospital in Pensacola, Florida, Wells used a thin, single-source facade system that significantly reduced the amount of concrete used while enhancing the building’s sustainability profile in various other ways.
More hybrid structural approaches are also being used, like prefabricated stair and elevator cores in combination with other framing materials to achieve both flexibility and efficiency.
“This kind of system lets teams streamline construction in key areas while still customizing the rest of the structure to meet specific design, performance or site needs,” Parker said. “It’s a practical way to keep projects moving while staying responsive to the unique demands of healthcare construction.”
Technology
In March of this year, McCarthy Building Cos., a member of multiple AGC chapters, topped out at CHI Memorial Hospital Georgia, a member of CommonSpirit, in Catoosa County, Georgia. The 134,000-square-foot project broke ground in March 2024 and is scheduled to open in January 2026. The $126 million project budget covers all aspects of the new hospital, from construction and infrastructure to interior furnishings and advanced medical equipment and furnishings essential for patient care.
As a “smart hospital,” CHI Memorial integrates advanced technology to improve patient care, streamline operations and enable data-driven decisions. The hospital will feature artificial intelligence, automation and virtual care technology to help both physicians and providers provide a modern healthcare experience.
“Technology has not only driven efficiencies in the field but also in our offices and businesses,” said Kyle Orr, senior project director at McCarthy. “We are focusing on consistency in our processes and how we handle the incredible amount of data we collect from our projects. The AI tools that are being created will help us better analyze this data and create greater efficiencies in our workflows.”
Tools like automated quantity takeoff are helping McCarthy to be faster and more effective, but these tools still require verification of the data, he said. While these tech tools are helping the contractor decrease the time it takes to analyze information, they still require knowledge and experience to make sound decisions based on the data that is provided.
“Advancements like exoskeletons are being used to help keep our craft workforce safer and decrease the physical toll of many activities,” Orr continued. “We’re also employing technologies to track productivity and find areas where we can be more efficient and do more with less.”
Building Information Modeling (BIM) allows Wells to identify clashes and plan the integration of prefabricated components with a healthcare facility’s mechanical, electrical and plumbing systems well before they are installed onsite, Parker said.
“There’s also a common misconception that prefabricated structural systems lack flexibility,” he continued. “In reality, with thoughtful design and early collaboration among all stakeholders, it’s very possible to plan for MEP penetrations and future modifications. Whether it’s a beam, double tee or wall assembly, the key is proactive coordination from the outset to ensure long-term adaptability and performance.”
Looking ahead, there will be even more integration of digital tools, including AR/ VR for client walkthroughs, lifecycle performance modeling, and even digital fabrication, Parker said.
Financial Uncertainty
“Uncertainty exists, of course, including how the federal government is going to treat the various programs that healthcare systems and insurers interact with,” Bruns said.
“When you make a large capital investment, you really want to have certainty if that investment will pay you back over time, so a number of healthcare systems have just taken a pause until they see where this is headed,” he continued. “As legislation or directives change, they’ll need to adapt programs to make sure that the economics of whatever they’re planning is viable.”
The imposition of tariffs and the threat of more has resulted in some opportunistic price increases on materials by suppliers, though not for practical or legitimate reasons, Bruns said. Most healthcare systems are amenable to sharing the pricing risk, but a few are still trying to put the risk solely on the backs of contractors.
“As an industry professional, that is a very limiting proposition for a customer to take that opinion,” Bruns said. “This is a risk that we all share, just like we all participate in elections. The idea that all that risk would be on the builder is very unfair.”
Safety
The labor market, as well as the continuing construction boom, has required an entrepreneurial mindset in the construction industry, said Orr.
“We are focused on being more efficient, working in a controlled environment and creating a safer workspace,” he continued. “Techniques like prefabrication allow us to create efficiencies in the building process and better control the areas where craft employees operate. Prefabrication of everything from bathroom pods to entire exterior envelope systems helps drive value and safer work environments.”
Workforce
Workforce shortages, in all sectors of the industry, is a concern. “One of the biggest advantages of prefabrication is reduced labor demand onsite,” said Parker. “We’re often installing with crews as small as seven to 10 people, which helps drive cost certainty and safety while keeping projects on track.”
Prefabrication helps the recruitment process too, said Bruns, because it’s done in a more-controlled environment.
“They don’t have a background in tradecraft, but they can come to our shop and on day one after their orientation be working in a limited way on part of the assembly that they can perfect very quickly,” he said. “Then we take them into another part of the assembly and they learn that skill. Over time they grow their capabilities so that if they did want to work in the field as a journey person, they can upskill in that way.”
The controlled environment also provides more consistency. For example, the crew can do their job on a set hourly basis, and there’s going to be work the next day. This environment also provides more comfortable amenities, which a construction site doesn’t, like a designated lunch and break room, and indoor restrooms.