Top Health Systems Show Slight Decline in Medical Construction Spending for 2018
The top 10 leading U.S. health systems account for more than $20.4 billion of current and upcoming medical construction, according to a recent analysis from BuildCentral, down approximately 5% from 2017.
Behind the numbers
One potential reason for the slight decrease in spending by top systems is the continuing focus on renovation work and new outpatient facilities rather than costlier, ground-up expansions. Compared to this time last year, BuildCentral reports a 26% increase in the number of newly planned and active renovation projects industry wide, with new construction and expansions up 8.5% in the same time frame.Compared to this time last year, BuildCentral reports a 26% increase in the number of newly planned and active renovation projects industry wide, with new construction and expansions up 8.5% in the same time frame. Click To Tweet
Investments in outpatient care continue to grow
Investments in outpatient care and ambulatory surgery centers continued a three-year, reported growth trend with an 18.5% increase in projects from 2017. Health Facilities Management Magazine and The American Society for Health Care Engineering (ASHE) showed similar findings in its 2018 Hospital Construction Survey, with respondents continually reporting a focus on renovations, along with ambulatory and outpatient care.
Only Scripps Health broke $2 billion in active construction value and remained the active construction leader, compared to three additional health systems in 2017, with its $2 billion Scripps Memorial Hospital replacement in La Jolla, California. Last year’s leaders Sutter Health and the New York Presbyterian Healthcare System no longer even rank in the top 10 of spending, having respectively completed around $2.6 billion and $1.8 billion in construction the past year. The University of Maryland and Indiana University health systems also left the top 10 in spending this year, along with Providence Saint Joseph Health.
Leading the top 10’s new additions for 2018 is University of California Health with its $1.5 billion, planned replacement hospital for UC San Francisco. Other health systems with major planned projects include the University of Pittsburgh Medical Center (UPMC) with nearly $1.8 billion worth of projects in combined estimated value, and Mount Sinai Health with $1.5 billion in combined projects, both new additions to the list in 2018.
Other shifts on the 2018’s top 10 list include the new arrival of the Mayo Clinic Health System with $1.7 billion in planned and active projects, and the Inova Health System with $1.5 billion in planned and active projects.
Top 10 Health Systems Rankings
The top 10 health systems ranked by combined active and planned construction value are:
|Top Health Systems||Value (in millions)|
|University of California Health||$2,715|
|University of Pittsburgh Medical Center (UPMC)||$1,920|
|Mount Sinai Health System||$1,866|
|University of Pennsylvania Health System||$1,851|
|Mayo Clinic Health System||$1,745|
|Inova Health System||$1,551|
The analysis is based on BuildCentral’s proprietary medical construction market research tools available via www.buildcentral.com and www.medicalconstructiondata.com as of 11.15.2018. BuildCentral, headquartered in Chicago, compiles comprehensive construction intelligence on all major U.S. medical construction projects as well as multifamily, hospitality/lodging and CRE construction. Publisher and analyst data licenses available.