In a recent interview, MedBuild Director of Business Development Brian Albers shared some insights on the future of healthcare construction. In it, Albers noted that an aging population, the Affordable Care Act (a.k.a. Obamacare), and the economy are the three largest factors in determining the future of healthcare construction.
There’s no question that an aging population will require increased healthcare services in the near future, creating further demand for related medical facilities. The economy continues to show improvement. The wild card in the equation remains the Affordable Care Act (ACA), and whether its intended goals will help or hurt healthcare-specific building projects.
Halting the Decline
In 2012, Architectural Record predicted a decline in healthcare building as a result of the ACA. Findings from McGraw-Hill supported this downward trend with medical construction dropping from $30 billion in 2008 to $23 billion in 2011 after the passage of the ACA. Many firms were unsure as to whether the ACA would be overturned by the Supreme Court or whether the law would be impacted by a new president in 2012. As a result, nationwide plans for new medical facilities were put on hold at the financial modeling stages. With the ACA and presidency solidified, plans have become more concrete.
A July 2013 report by the Huffington Post suggested that benefits from the ACA are already being realized in the form of thousands of federally-funded expansion projects nationwide. These projects include qualified medical clinics and community health centers. These reported increases in healthcare construction are likely to continue, if the ACA lives up to its billing.
Anticipating the Market
Should the ACA’s estimate of millions of uninsured individuals acquiring health insurance prove accurate, the country’s current medical facility infrastructure will need a quick boost. Expansions to existing buildings or new satellite locations will be the obvious first choices. Additional projects would hinge upon the growing pool of newly-insured Americans coupled with an increased need for additional services by the already-insured aging population. If the ACA fails to enroll enough people over the next six months to compensate for its early shortfall, the medical construction industry may suffer. To what extent is yet to be determined.
How do you see the ACA impacting healthcare construction in your market?