Hospital construction costs continue to rise yearly, alongside demand for increasingly complex designs and projects. Determining hospital construction costs can be a vexingly complex topic influenced by several factors ranging from budget considerations to desired patient health outcomes. In this article, we’ll dive into the complexity surrounding hospital construction costs by looking at some of the main factors affecting hospital construction costs today. In doing so, we’ll outline how medical center construction practices have changed the design and bidding phase of a hospital construction project.
Table of contents:
Below are some of the cost breakdowns in hospital construction. We analyzed our cost estimates using the US National average data on hospital construction from RSMeans. The costs, however, vary depending on market conditions, scope, location, and annual fluctuations.
The broad scope of services in hospitals is meant to serve many partners and clients. Below are the average costs to build a hospital per square foot.
| COSTS | COST PER SQUARE FOOT |
| Labor | $234 |
| Contractor fees | $58 |
| Architectural fees | $26 |
| Subtotal | $318 |
| MATERIAL COSTS | COST PER SQUARE METER |
| Concrete | $22.45 |
| Masonry | $14.86 |
| Metals | $23.52 |
| Wood and Plastics | $32.52 |
| Thermal and Moisture | $25.32 |
| Openings | $8.90 |
| Equipment | $13.34 |
| Finishes | $52.34 |
| Fire Suppression | $6.78 |
| Plumbing | $42.55 |
| HVAC | $56.21 |
| Electrical | $49.23 |
| Grand Total | $613.38 |
It is common for hospitals to classify their useable area based on the number of beds available. There are hospital beds in trauma centers, surgical rooms, incubators, cribs, and beds for children and adults. The total number of hospitals is determined by the number of expected patients in a year at a hospital’s location. According to Royal Takeoffs, the construction costs for a large hospital with more than 500 beds could range anywhere from $250 million to close to $1 billion. The average hospital construction costs are 1 million per bed. Below are the average prices for building a hospital based on the need for hospital beds according to Fixr:
| NUMBER OF BEDS | AVERAGE CONSTRUCTION COSTS |
| 50 | $25-50 million |
| 100 | $50-150 million |
The average hospital construction costs vary depending on the type of hospital. Smart hospitals with more space per room tend to cost more than average hospitals. Hospitals with specialized equipment and furnishings also tend to cost more. Below are the most common hospital types and the accompanying construction costs.
Emergency hospitals refer to medical treatment facilities that care for patients in need of acute care since they cannot book a prior appointment for themselves. These hospitals have a lot of specialized equipment due to the unplanned nature of the attendance of patients. Emergency hospitals are smaller than regular hospitals. The things that spike construction costs in emergency hospitals are the specialized equipment and the construction method.
Emergency hospitals are not always built using conventional techniques. They are designed as makeshift buildings from prefabricated materials. Emergency hospitals are not meant for long-term use due to safety concerns. Sometimes when an emergency arises, they might need to be completed in weeks to satisfy the sudden surge in demand. Usually, emergency hospitals cost anywhere between $200 and $500 per square foot.
Micro hospitals refer to small-scale inpatient facilities with 8 to 10 beds where patients can be admitted or observed for a short stay. They have services such as laboratory services, imaging, pharmacy services, and inpatient care services. Micro hospitals cost anywhere between $300 and $400 per square foot. The cost is primarily influenced by the type of service the hospital offers. As the name suggests, micro-hospitals are smaller than ordinary hospitals and therefore have lower construction costs. The idea of micro-hospitals is to reduce the strain on the big hospitals. Only the patients needing specialized medical attention are sent from the micro-hospitals to the full-scale hospital.
Modern medicine has shown us the limits of the current healthcare system and professionals’ resilience to bring about transformative change. Smart hospitals have advanced features like telehealth, remote patient monitoring, electronic health records, sliding doors to minimize infection risks, and intelligent daybeds. These hospitals are wired with these technologies to effectively serve a patient’s care. The average cost for setting up these hospitals ranges from $500 to $650 per square foot. These hospitals are also constructed from prefabricated material, speeding up the construction process. Developers can start using the facilities sooner and consequently repay their construction loans faster.
Small hospitals are hospitals with less than 100-bed spaces. These hospitals are necessary to cater to the increasing need for expansion and access to healthcare facilities. They provide medium to high-level acuity care, imaging, lab services, and minor surgeries. The only difference between small and full-scale hospitals is the bed spaces and level of specialization. A small hospital with a bed space of 100 would cost about $400 per square foot.
There are numerous costs one needs to consider when building a hospital. These are:
Numerous factors influence a hospital’s construction costs. Some of these are inherent in the hospital itself, whereas others depend on outside factors. Cost estimation in these healthcare projects is a precise science that deals with forecasting and in-depth knowledge of the market structure. Some factors that impact a hospital’s building costs are location, resiliency, and future technologies.
A hospital’s location affects construction in numerous ways. The land acquisition costs for hospital construction vary in different places, with land in urban areas costing more than in suburban areas. The government approvals and licenses for hospital construction also vary depending on location. The location also affects labor costs as staff remuneration varies in different localities. When it comes to a project’s scalability, the hospital’s location should accommodate plans for expansion, parking, or construction of new services such as pharmacies. Patients also prefer convenience in care services. They prefer outpatient units that are nearby rather than having to travel for long distances to receive treatment. Hospitals are therefore prioritizing the ease of patient access, and this comes at a premium.
There has been a sudden spike in need for healthcare in the recent past. This has led hospitals to respond to this through integrated disaster planning in their building processes. Resiliency is twofold; from outside factors and internal factors. An example of resiliency from external factors is unforeseen disasters that affect a hospital’s operations, while inner resiliency can be due to a sudden increase in patients. Hospital construction, therefore, considers a building’s layout ensuring that there is fast and efficient access to services when they are needed in high demand. For instance, hospitals must be designed according to the construction codes in those locations in earthquake-prone areas. These extra considerations to cater to unexpected situations lead to higher construction costs.
The rate of technological change in the hospital industry is staggering compared to other sectors. Hospitals, therefore, must be designed flexibly to accommodate upcoming technologies. Current hospital designs have cutting-edge technologies to cater to the future. The hospital also needs to have the necessary infrastructure to accommodate these new technologies.
Hospitals have different areas that serve multiple functionalities. It is essential to note the various hospital areas and include them during the cost estimation process. Some hospital projects are unique, with many variables affecting the cost information. A hospital is primarily divided into administrative, capacities, safety standards, and medical units.
The hospital administrative area is additional to the patient treatment and care area. It is inexpensive to build and costs about $200 per square foot. The administrative area is separate from the patient care area and is accessible through a different entrance. The size of the administrative area varies depending on the type of hospital. Teaching hospitals have more extensive administrative areas compared to ordinary hospitals.
These areas have services such as laundries, kitchens, and housekeeping, and they all require space in a hospital. The construction costs for these services also depend on a hospital’s size, location, layout, and design.
These include the restaurants, kitchen area, lounge, and facilities for reheating and storing food. The size of these food service areas depends on the hospital types and capacity. On average, it costs about $125 to construct these service areas.
These are the areas responsible for ensuring everything is sanitary and running smoothly and efficiently in a hospital. The size of these areas also depends on the hospital’s capacity and the equipment included in the hospital. The average cost for the housekeeping areas ranges between $150 to $300 per square foot.
The safety areas in a hospital encompass many utilities, such as ventilations and storage and supply areas. These safety units are responsible for maintaining safe and secure hospitals.
The most common sanitation service in a hospital is plumbing. Each hospital bed needs an average of 110 gallons a day. In addition to plumbing, sanitation covers decontamination, waste management, and sterilization areas. Maintaining sanitation services costs anywhere between $45 to $200 per hour.
The electricity construction costs vary from $3 to $4 per square foot.
Other safety services include ventilation, oxygen and gas supply systems, and hospital radiology.
The Hospital Medical Unit is the central unit of the hospital, with construction costs ranging from $250 to $625 per square foot. Different hospitals have different functional units. Below are the most common hospital medical units.
Average hospital patient rooms cost between $250 and $450 per square foot. They have basic amenities and specialized equipment depending on the types of patients they house.
Emergency rooms are integral to many hospitals, especially those with trauma centers. They have access points with the sizes and layouts varying with the type of hospital. Emergency room construction costs range from $280 to $400.
These are the most expensive hospital units, ranging from $350 to $625 per square foot. The high price is due to specialized medical equipment, lighting, and ventilation.
Diagnostic units cost anywhere between $300 and $350 per square foot. Most diagnostic units are near emergency rooms or inpatient areas.
Not all hospitals have maternity units, but most of them have. Maternity units are divided into nurseries, pre, and post-birth rooms. Maternity wards cost anywhere between $400 to $500 per square foot.
Research facilities are not present in many hospitals and are majorly inclusive in research and teaching hospitals. Average costs range from $400 to $625 per square foot. These costs depend on the facilities and equipment necessary for the space.
Below are some examples of hospitals in the United States with related construction costs.
The University of Texas Southwestern Medical Center constructed a new 140-bed hospital which cost $140 million. The Kindred Healthcare Anderson hospital sits on a 62,570-square-foot facility, costing $28.5 million. It has a bed capacity of 50. The Lone Peak Hospital in Utah is a 40-bed facility that costs $54 million to construct. In Michigan, Caro Psychiatric Hospital’s aging facility was replaced with a $68 million, 127,000 square foot building in 2023.
Managing hospital construction costs is critical for ensuring the healthcare system’s success. Hospitals are complex to build, which is reflected in the high construction costs.Dealing with these complexities needs collaborative design processes among stakeholders. It is nearly impossible to estimate hospital construction costs without construction software. Hospitals are increasingly growing in complexity, and therefore, we can expect reliance on technology to produce higher efficiency rates and better patient satisfaction also to grow. Effective cost models developed early in the planning stages ensure industry success among the key players in construction.
