Impact on Construction

Contact

Jim Young
Director, Strategic Communications & Congressional Relations
Government & Public Affairs
Associated General Contractors of America
2300 Wilson Boulevard, Suite 400
Arlington, VA 22201
USA
Phone: (202) 547-0133
Fax: (202) 547-1635
http://www.agc.org

It is too early to tell if the recently passed health care bill will add or subtract from health care construction in the future. The 32 million individuals that will be entering the health care insurance market may not lead to an outpouring of hospital and physician care facilities. Previously, many of these individuals were receiving either emergency room care and others had declined coverage because they didn’t feel a need for coverage. Another issue to look at is if hospitals and other facilities will be adequately compensated to allow them to expand and if the health care workforce expands to the point it needs more facilities.

Looking at the demand for different health care facilities is a mixed picture. Over the last year spending on hospitals, medical buildings and special care facilities were down and the largest portion of health care spending is privately financed.

Hospitals that rely on endowments or capital campaigns saw their capital budgets shrink and they may resume some multi campus as the economy recovers. Medical building construction has been down due to the glut of general office building, a normal office building can be remolded at significantly less expense than new construction. This sector also reflects the difficulty of receiving bank financing. Special care facilities are also down as funding sources have dried up.

The health care bill will impact physician owned hospitals in a negative way. The law will restrict their ability to expand or even modernize the facilities..