A recent Federal Reserve Bank of St. Louis healthcare report revealed that spending on hospital construction has reached a nearly record-setting high despite costs of operations increasing, Construction Dive reported Aug. 29.
"Construction costs across all sectors, including healthcare, remain at all-time highs, exacerbated by the double-digit annualized inflation rates. Making matters worse for some is the rising cost of lending rates," Chris Hopper, president and general manager of Skanska, a Sweden-based contractor, told the publication. "From a healthcare perspective, particularly where schedule urgency is of utmost importance, we are seeing projects move forward despite the higher costs."
Kevin Hinrichs, president of Taylor Design, a strategy-based design firm, told Construction Dive that hospitals stand to lose more money by not following through with construction.
"By not following through with planned projects, healthcare networks would lose more in revenue than they pay in construction costs, even with price escalation," Mr. Hinrichs told the publication. "Some are even accelerating project schedules, and presumably paying more to do so, as a way to get patients in the door faster and revenue coming in sooner."
The pandemic is another reason for current heightened construction since plans have been put off for the past two years, according to the publication.