We recently checked in with Michael Strogoff, FAIA, a California-based management consultant and former chair of the advisory group for the AIA Practice Management Knowledge Community, about how the new health-care law will impact firms, individual architects, and health-care architecture. Strogoff anticipates critical shifts for the market in the coming years, as demand grows for outpatient facilities and lags for multi-billion dollar hospital complexes.
Image courtesy Michael Strogoff
LM: How will this affect firms, both large and small?
MS: The implementation of the Affordable Care Act is not likely to have a major impact on larger firms, as almost all of them currently offer health insurance benefits to their employees. Although the law specifically exempts firms that have fewer than 50 employees, which is the vast majority of architectural firms, the smaller firms that don’t offer health insurance benefits will be more likely to do so because of lower overall premiums and a wider set of choices through the insurance exchanges.
The main impact is for individuals, solo practitioners, and small firms that have been unable to offer sufficient health-care benefits or have shifted costs to employees. Ultimately, this will be decided on a state-by-state basis, as states decide whether to set up their own insurance exchanges or opt into federal exchanges. As a result, no one knows how the new law will impact premiums and coverage, though presumably, costs will be lower for individuals with pre-existing conditions.
LM: How will it affect individual architects? Will it inspire some designers to strike out on their own?
MS: Architecture has always been a transient profession, with people moving from firm to firm in order to gain broader experience and better positions. As health-care insurance becomes unlatched from employment, employees will feel even freer to leave an employer to go somewhere else or to set up their own shop.
Also, with the removal of obstacles for obtaining health-care insurance, such as pre-existing conditions, and the availability of better rates through insurance exchanges, becoming a sole proprietor will suddenly become feasible for a segment of the profession. And perhaps younger people entering the profession, those 26 or younger who can stay on their parents’ plans, can afford to more entrepreneurial.
LM: How will it affect the design of health-care facilities? Also, will it help jump start projects?
MS: The passage of the Affordable Care Act does remove some uncertainty for health-care organizations that have been waiting to evaluate whether to proceed with new facilities. So we might see a short-term increase in new medical facilities and certainly more renovations as hospitals and healthcare organizations adjust to new reimbursement patterns.
For health-care projects, the trend will continue toward outpatient facilities, with more diagnostics and treatments being done within outpatient settings. This will likely translate to smaller facilities that do not entail the stringent regulatory reviews that are part of designing inpatient facilities. Theoretically, this should make it easier for firms with similar experience but without health-care portfolios to enter the health-care design market.
For large firms, they will likely see fewer mega-projects—the $1 billion-plus projects—than we saw a few years ago, as the trend continues toward less costly outpatient facilities and more people scrutinizing health-care costs, including facility expenditures.