Inside Modular: The Podcast of Commercial Modular Construction
Inside Modular is the official podcast of the Modular Building Institute, the Voice of Commercial Modular Construction. This series will highlight industry news and trends, include conversations with industry thought-leaders, and discuss the advantages of modular building construction.
Inside Modular: The Podcast of Commercial Modular Construction
The Future of Healthcare Construction & the Potential of Modular w/ EIR Healthcare
Grant Geiger, CEO of EIR Healthcare, explores how modular construction is transforming healthcare building projects by addressing the industry's unique challenges of high costs, slow timelines, and technology integration.
What makes healthcare construction unique isn't the materials or processes—it's the motivation behind the projects. Unlike economically-driven commercial developments, healthcare facilities often expand based on community need rather than financial returns. And with more hospital systems shifting to a "hub and spoke" model with smaller satellite facilities, the opportunities for modular building has never been greater.
In this episode, Grant shares his thoughts on the potential for modular healthcare construction to produce buildings that not only deliver care for patients but deliver faster, more predictable timetables for stakeholders. By eliminating the "blank sheet of paper" approach that currently dominates healthcare construction, modular methods promise facilities that can be built faster, cheaper, and with better patient outcomes—a win for providers, patients, and healthcare systems as a whole.
Hello and welcome to Inside Modular, the podcast of commercial modular construction brought to you by the Modular Building Institute. Welcome everyone. My name is John McMullen. I'm the Marketing Director here at MBI. Today I'm joined by Grant Geiger, CEO at EIR Healthcare. Grant is here to talk about changes and advancements in healthcare building projects and the potential these bring for modular construction. Grant welcome Thanks, John. Good morning, Tell me about yourself, Grant. What's your background and what led you to EIR Healthcare.
Speaker 2:Well, it's a little bit of a windy road, but I actually have been in the healthcare industry for 20 years coming up. Started actually in the healthcare IT space, working on implementing electronic medical records in hospitals around the country and, from a technology perspective, stuck with healthcare. And you know, today I'm in modular. But you know, what got me into modular construction was actually some of the design and engineering of my late father, who had implemented and was awarded patents around modular construction of patient rooms. So that caught my attention and in 2016, I left my corporate job and started EIR Healthcare. And here we are.
Speaker 1:Very good. It seems to be a sort of a theme I've noticed with a lot of guests here. They've left their corporate gig and started modular and we're all thankful for it. So that's cool, tell me about EIR Healthcare itself. How did the company start, what was your process for that and what's its mission?
Speaker 2:Yeah, yeah, absolutely. So. You know, at the end of the day, with Air Healthcare, what I tell folks, eir, is that we do two things we do modular construction and we do healthcare projects. We're not interested in deviating from that. We believe that the healthcare industry itself is unique in such a way that, you know, what we do lends itself to, you know, supporting that industry.
Speaker 2:And really the fundamental question that we ask ourselves every day is how do we find a way to deliver healthcare at a lower cost?
Speaker 2:Right, you know some of your listeners may not be as familiar with the healthcare industry, but you know the sort of macro trends that we look at is that we have 10,000 people every day and 65 years old, we spend more per capita than, I think, the next 10 countries in terms of our health care expense expenditure and we technically have worse outcomes than most of the Western world.
Speaker 2:So, for all the advances that we have and we should be proud of what we've done in the health care space, you know and from a from a clinical and from a health care perspective what we do today, it's still very expensive, and so what we are always looking at is what is something that we can do to help reduce costs, to help deliver care into areas where care is not able to get to. We're talking about rural healthcare, those that are impoverished people that you know do not have insurance, things like that. But how do we find solutions to engage people so they get access to healthcare? And you know we do a little bit, you know, in our own little way, but you know our mission is to try to improve those outcomes.
Speaker 1:What can you tell me about the healthcare building industry in general? How does it typically work and how does modular construction generally benefit that sector of the building industry?
Speaker 2:Yeah. So I mean I wouldn't say that the healthcare building industry is all that much different, in the traditional sense of construction, than any other industry in terms of multifamily or residential or commercial or whatever that may be. At the end of the day, you're still going through the same processes, you're still using the same people architects, engineers, general contractors so those things don't necessarily change. The only thing that I think is the biggest difference is that it's probably the only industry where the development and expansion of healthcare facilities is not purely economically driven. So what I mean by that is you know, if you're a developer who's building ADUs, for example in California, or if you're a developer who's building multifamily housing across the United States, like with three over ones or five over ones, things like that you know there's generally a pro forma and there's a financial metric that's driving that. There's a lender involved. There's a whole component of how that's being done. There's an expected return.
Speaker 2:Healthcare construction doesn't necessarily, is not necessarily driven that way.
Speaker 2:Right, the development of that new bed tower with 300 beds or the opening of that new children's hospital in your town the funding for it and the mechanism for why it's being built may not be economic at all and who's funding it and how it's being funded.
Speaker 2:It may be donations, it may be grants and tax dollars, and so I bring all that up because you see a lot of development that's getting done in the healthcare space and it may seem counterintuitive.
Speaker 2:So I think that's something that people need to understand. And then I think the other thing is generally, I think one of the things that we see that's a huge issue and it makes it a little bit unique is that the healthcare industry construction moves extremely slow. So when we talk to some of the large health systems in the United States, they're looking at building bed towers and their timeline and their horizon may be 10 years to when that tower finally opens. And what's unfortunately happened, which is extremely acute to the healthcare industry, is that healthcare driven by technology, much more so than multifamily, again, residential or these other parts of the building industry and so healthcare is being forced now to make technological decisions for buildings that actually, by the time they're being built, they're obsolete, and so I think that's an interesting component too. That makes it a little bit different, but at the end of the day, the process is still the same, the buildings are still the same, they're still using the same wood the same drywall, all those types of things.
Speaker 1:It's just, you know it has a little bit of that your company has built. Recently I saw on your website that you've done at least two for Good Samaritan Hospital, which is large hospital systems like ones you mentioned. What can you tell me about those projects?
Speaker 2:Yeah. So I mean, we'll talk about them and I'll give you another one too in a minute. But I think you know, with Good Samaritan, they're a client in Bakersfield, california, and, as I said earlier, their development and their growth is not driven by a IRR or by an investor. Their growth and their drive is actually done by the need for providing clinical care in rural and remote areas. And so in this case, with Good Samaritan, the funding for their construction projects is actually backed by the state of California, and so the state has really come in and said, hey, you know what? There's actually a need for these types of clinics and these types of buildings, because there is a what they call a health care desert. So there's a lack of health care options for people in this area.
Speaker 2:We're going to provide funding and for them, their particular focus is around behavioral health, mental health and those types of that subset of issues. So you know, with them we're currently working on two, six thousand square foot clinics. Those clinics we now are going through an entitlement process and production for those is starting this year. So they aren't completed, john. I think it just to be clear about that. But you know, we think that's part of a larger trend across the United States, which is we're seeing that healthcare systems are. They call it a hub and spoke model. So you have a main hospital that's your hub and then you have a spoke system of smaller ambulatory or outpatient type centers, and so that has many different permutations. But in our example in California it's around behavioral health, but it very much as easily could be the same thing but could be done in Texas, could be done in Florida, could be in New York or somewhere else.
Speaker 1:I've been lucky enough, I will say, to tour a large modular hospital that was in construction at the factory, and I guess this goes back to a little bit your background in IT. It was fantastically complex just in terms of the technology and everything that had to be connected module to module throughout the hospital just to make this thing work. I'm curious how advances in digital networking and computing are impacting hospital construction, whether they be a bed tower, like you mentioned, or the smaller ambulatory centers, and how is that impacting modular construction? Are you able to give any examples of maybe what's changed over the past few years with this, you know, explosion in data processing and networking and computing, and how have you had to adapt to that?
Speaker 2:Yeah, that's a good. It's a really good point, john. I think previous to this I used to work, actually, in a data center that had well, still today actually has a third of all medical records in the United States. So we were responsible for, you know, approximately 90, 100 million people's medical records. So you know the technology piece. I would say you know to your point.
Speaker 2:Hospital construction and healthcare in general has always been very tech heavy. The difference that we're seeing today, I think, is two things. One is that it's going from what used to be hardwired and wired components to wireless and remote type services. So you know, and and I mean very, very literally we're going from you know, and I mean very, very literally we're going from you know when I started in healthcare IT, from you know hospitals having, you know, a server room and having servers in their hospital to now running things off of AWS and doing other types of things.
Speaker 2:The point is, you know, there's been a massive expansion in not only the technology platforms that are being used by hospitals but also the integration with what I'll call the physical and the virtual space. What Modular really lends to that and makes it really's trade is going to have to come in once the building is substantially complete or you know, as part of fit out and put in RFID sensors and technology and you know IoT, whatever it may be pieces and actually build them into the process of what's going on in the modular factory so that when the modules roll off the line and they're getting ready to be shipped to the site, all of those things have already been commissioned, they've already been tested and they're already installed. So we're cutting down on the time for when it takes to open that clinic and that facility.
Speaker 1:Well, you bring up your factory. I'm curious Tell me about your factory. How is it set up? Is it any different than other modular manufacturers who are putting out large multifamily buildings or smaller single-family residential homes? What's going on in your factory?
Speaker 2:Well, here's the interesting thing, John we don't own a factory, so we are agnostic. Well, here's the interesting thing, john we don't own a factory, so we are agnostic. The way we position ourselves in the market and the way we work with our clients is that we work with a suite of manufacturers, many of them MBI members, and we actually take our client through a process where we say, okay, based on your needs of what you're actually building, here are three or four, depending on how many. There are factories that could actually meet the criteria for what you're trying to build. And we've interviewed them, we've vetted them, we've looked at it and here's a recommendation, and here's our first and here's the secondary, and you make, as a client, the final decision. We're transparent in that pricing. We're not trying to make a buck on it. What we're trying to really do is make sure that the process is successful.
Speaker 2:I was the non-executive chairman of a modular manufacturer company by the name of Edmaris for eight years, so I've been on the factory side. I've toured dozens of factories around the world and what I've come to realize is it's not necessarily at this point in the industry. You know, what we're focused on is the quality of the work that comes out of the factory, not necessarily how much robotics they have, how much automation they have, because you have to. You have to look at the whole picture and how do you get the delivery of the of the end product right? And and how do you fit the delivery of the end product right and how do you fit the modular factory part of it into the overall process?
Speaker 1:Speaking of the end product, what can you tell me about building strategies for healthcare facilities in general? In the wake of all the technologies that we've talked about, hospital groups seem to be changing the way that they're building new facilities. You mentioned the hub and spoke model earlier. How are these changes affecting EIR and similar companies in the way they provide buildings?
Speaker 2:That's a good question, john. I think the reality is that healthcare is changing, and it's changing in a way that is becoming, I don't want to say, more personalized, but probably the footprint of it is going to feel smaller. But what I like to tell people is that, with all the crazy things that are going on in healthcare, people love today to talk about GLP-1s, things like Ozempic Wagovi and that's a weight loss type approach. But what's interesting about it is we're finding that there's now such a large enough subset of the population that's taking these types of prescriptions that it's actually going to have downstream effects on clinical outcomes for patients down the road. And I bring all this up because what I tell people all the time is the technology or the way that healthcare is being delivered may be changing, but at the end of the day, you still have four walls where you have to go somewhere to receive healthcare right, like you can do a telehealth appointment on your phone Some of your listeners, myself as well, you know I do telehealth doc appointments, things like that.
Speaker 2:But the healthcare experience is not going to go away, and so you know, I think in terms of the industry, you know what we're seeing is consolidation among hospitals and health systems and we're seeing the footprint shrink into a smaller type facility. And so you know, and our response to that as EIR Healthcare is that we have found, really, that our sweet spot is sort of in this five to 20,000 square foot space, where there's a lot of volume, there's a lot of repeatability in terms of a hospital or a health system saying I'm going to need five of those, I'm going to need five clinics. How do we come up with something? And you're always going to have your bed towers. The large, huge, big health systems are always going to continue to build those types of things. But you know, I think the delivery of it is changing and it's getting, you know, smaller and it feels more personal, but you know it's still an in in building healthcare facilities, be they large or small.
Speaker 1:What's the biggest challenge with working with your factory partners, your manufacturing partners, and getting those delivered?
Speaker 2:I think the biggest challenge is, well, I think, two things. First of all, the healthcare industry. By nature, and not just the healthcare construction, but healthcare overall is generally a somewhat conservative industry, right, I mean, you know you have cutting edge R&D and you know, and pharma get them back out the door and back at home or wherever they need to be and they're going. But I also think that the opportunity is probably greater in healthcare than it is in others, because healthcare has the highest, probably, level of standardization in terms of what they're looking for and the look and feel and all of that kind of stuff. Right, aesthetics matter, but they matter in a different way than, for example, in a multifamily-type setup.
Speaker 2:So the other part is it's actually, it's really, and everybody says this in our space, but I think it's probably the regulation and the approval process, right. So, like we're in California with these projects we have to work with, it's now HCAI used to be OSHPD and they exist for a reason. They exist for a very good reason and we like them, but that adds more complexity to the project than, again, for example, building residential homes, right, and so to go through that approval process to make sure you know things that we are building is within the code requirements, not just for the building type but also for the clinical use. But also for the clinical use and, for example, if it's behavioral health, are you using ligature-safe beds, ligature-safe window treatments, all these types of things that make it more safe? But I think the process overall it can be a challenge because you could have something as simple as a 5,000 square foot clinic but the entitlement process could take you 12 months by itself.
Speaker 1:You mentioned the healthcare industry being sort of a laggard in adopting modular, and you mentioned that there is probably more opportunity for the healthcare industry to adopt modular. So in your opinion, do you think we're more likely to see a lot more modular healthcare projects in the near future, or are hospital groups and developers sort of still discovering that modular is a possibility and it might take a while?
Speaker 2:Yeah, I think it may take a while. I think it's not near future. I think the thing is, you have to remember, you know, in the United States today I don't know the exact number off the top of my head but it's, I think it's over 3000 hospitals are in the United States. And so the way I like to explain to people is there's sort of like the Fortune 500, and then there's like the Russell 2000 or 3000, to use a financial analogy. And so I think I had a very well-known VP of construction for a health system tell me once. He said Grant, the way I explain modular construction in healthcare is that there's a pool, right, and we're all looking at a pool. And way I explain modular construction in health care is that there's a pool Right, and we're all looking at a pool and we're all looking at how deep it is and we're all standing around it as meaning the needs of construction and we're saying, yeah, I think the pool is three feet deep, but none of us and this is at the Fortune 500 level, right, we're somewhat, we're reluctant to want to be the first ones to jump into that pool, right, because we don't know what that is, and you know. So we've had a lot of conversations with large academic medical centers that you know, quite frankly, are not ready for it because they have such a large, their processes are so complicated, their clinical pathways are so robust that to change the delivery of this construction product let's call it fundamentally changes some of the things that they do as a business, and so I don't think we're going to see things happen overnight. But again, maybe the sort of play is at this 5 to 20,000 square foot area there's a lot of this stuff being built. As we as an industry meaning the modular industry can continue to be successful at this space, then we will continue to see, I think, modular grow and expand in the healthcare you know, in the healthcare industry.
Speaker 2:You know I had a, again really large health system VP of construction was sitting in one of our conferences a couple of years ago and he said you know, grant, I don't understand, because every time we sit down to build a new tower, we start with a clean sheet of paper and we sit down with the architect and we design what the tower is going to look like, but we know every single time what our patient room is going to look like, because we have a standard patient room and they have a standard patient design. So why am I constantly starting with a blank sheet of paper every time I am starting a new project? Why am I not just taking my model room in Revit or whatever it may be and dropping that into my next design and keep on iterating? Right and that's what we're trying to focus on is like, how do we drive lean principles and that Toyota production processing concept of iteration to the design of hospital construction?
Speaker 1:Well, I think that VP of construction is thinking exactly along the right lines. What is your elevator pitch? So, when you're having these conversations, you're talking with VPs of construction at big companies that want to build modular, what's your pitch to them as to why they should consider modular and what are their responses? Yeah, so I mean it's really simple.
Speaker 2:At the end of the day, the pitch is this we're proposing a new solution to you in terms of how you can deliver healthcare. Our process, if you work with us, is going to give you an end product that is going to be built. Most cases I can't guarantee, but I will say most likely is going to be built. Most cases I can't guarantee, but I will say most likely is going to be built either faster or cheaper than traditional construction, and there's different ways for us to look at that. But generally speaking, that has held true.
Speaker 2:And on top of that, what we are proposing is if you, as an organization, commit to modular construction as your sort of means to an end, it will open the doors for you in terms of your technology platform, your technology integration, how you treat patients, and we believe and we do believe this very strongly potentially is getting you to the point where you will improve patient outcomes. And patient outcomes are important to a lot of these hospitals and health systems because that's tied to how they get reimbursed from the federal government. And so if we can improve your patient outcomes and we can change the economic formula of how you're reimbursed, everybody wins because you're going to save time, save money and your patients are going to be happier doing it.
Speaker 1:What's your outlook for the industry over the next few years? The modular healthcare industry that is. There's a lot of new federal policies, there's a lot of tariff talk, there's immigration talk. What does all that mean for the healthcare building industry and for EIR and modular building itself?
Speaker 2:Yeah, that's the million-dollar question right.
Speaker 2:I mean I think, yeah, just a few. Look, I mean, nobody has a crystal ball. I think at the end of the day, I think that if we have an opportunity to bring this type of manufacturing and this type of technology in-house, meaning into the United States, and we can drive that, I think that's ultimately good for everybody. While I'm not necessarily a big fan of the tariffs, I think the tariffs, inadvertently, are kind of creating that opportunity, because being able to now build something in a lower cost country right, as we already know and then bring it to the United States now we got to slap 25, as of this morning, actually right 25% on top of something from Canada or Mexico. That changes the economics, right, and so I think that that's good for us long term as an industry.
Speaker 2:But ultimately I think that the healthcare modular industry overall has a long road ahead of it in a good way, a long runway, because the cost of construction within healthcare is already extremely high, the timeline is already extremely long, and so any opportunities where there exists for us to provide value-added opportunity to reduce those things is going to be good for us. It's hard to really crunch this number. I know we always look at construction starts and what percentage of those in the United States are modular. It's really hard to drill down into that in the healthcare industry because it's not really reported. But I suspect that if you were to take modular in a broad sense not just meaning volumetric modular panels, but even talking about bathroom pods, talking about even mechanical racks you know things like that of nature. I suspect that we've seen a pretty steady increase in the utilization of modular within the healthcare industry and I think it's going to continue to increase.
Speaker 1:What's next for EIR, both going you know, going into 2025 and beyond, if you're able to say what's on the horizon for you guys.
Speaker 2:Yeah, so I mean we're obviously looking to get our buildings into the ground. We have another building which we didn't mention, but I want to just give a shout out. We're working on a 10,000 square foot medical office building right now in Brooklyn. We just finished the foundation and modular production is starting actually this month on that. So we got a lot of work cut out for us this year on the building side.
Speaker 2:But the future for us is really about not only getting these buildings into the ground but starting to really develop the technology aspect behind it to support them and working with our partners to do that. So you know, what we're really driving ourselves to is how do we use the building, how do we use modular construction to build the building? But then how do we also use the building to collect data and insight as to what's going on inside so that we can, for our clients and for ourselves, have insight into building better clinics, better hospitals down the road, and not starting with that blank sheet of paper, as that VP of construction said, and actually starting with something that is tested and we actually have some data points on.
Speaker 1:Well, grant, this has been a great conversation. I really appreciate your time today. Thank you for being here and I can't wait to see what the future holds for EIR. Thanks, john, looking forward to it. Thank you, my name is John McMullen. This has been another episode of Inside Modular, the podcast of commercial modular construction. Until next time.