One-Third of Hospitals Have Active Construction Projects in the Pipeline

A recent survey of hospital and construction industry insiders performed by Health Facilities Management and the American Society for Healthcare Engineering found that about one-third of hospitals surveyed reported active hospital construction projects and about the same amount were planning projects within the next three years.

Other key findings of the survey include:

• Lots of construction. About 63 projects valued at more than $100 million each were under construction in late 2010, and another $20.8 billion of such megaprojects were in planning. However, some contractors think many of those projects won't be built.
• Cancer, heart and orthopedics represent the top specialty hospital construction categories. Types of specialty hospitals with the most construction activity were cancer (21 percent), heart (18 percent) and orthopedics (12 percent).
• Less new hospital construction. There were an estimated $24.9 billion of new hospitals and clinics under construction in the fourth quarter of 2010, 10 percent lower than in the year before.
• More new construction planned. Some $27.7 billion in new hospital construction is currently in planning, up from $26 billion a year ago, but the figure was down 24 percent from 2008.
• Renovations more common. Renovation or expansion accounted for 73 percent of construction projects a survey of hospitals late last year. About two-thirds of current renovation projects are worth less than $3 million. Hot spots for current projects are Texas, California, New York, Massachusetts and Illinois.
• Lots of infrastructure work. One-third of hospitals surveyed were in the process of replacing or upgrading air handlers or ventilation systems, 26 percent were upgrading building services systems to meet IT infrastructure needs and about 20 percent were upgrading or planning to upgrade a data center.
• Other types of projects. Other popular building projects are physical plant infrastructure upgrades, medical office buildings, ambulatory specialty treatment centers and central energy plant work.
• Healthcare reform causes hesitancy. Hospitals are still deciding what will be the combined impact of payment changes and higher patient volume under healthcare reform.
• Mixed views of future. Although many hospitals predicted a slight increase in projects this year, about one in four survey respondents believed 2011 would see fewer previously planned projects reach completion than in 2010, and 29 percent reported projects were on hold or delayed.

Read the 2011 Hospital Building Report in Health Facilities Management.

Read more coverage of hospital construction projects:

- Survey: 67% of Hospitals Undergoing Construction

- 10 Largest Hospital Expansion Projects of 2010