How Much Does it Cost To Build a Hospital?

Many factors can impact the cost of hospital construction, such as size, location, and design. Project complexity can also impact labor costs since hospitals must be designed and built to be compliant with today’s standards and adaptive to the growth of the industry in the next few years. 

Healthcare construction also requires the integration of high-tech medical equipment, medical gases, communication technology, and fire protection. Planning and development of the project must also consider special attention to infection control procedures, staff needs, and patient comfort.

Hence, to come up with a competitive cost estimate and proposal for such a complex project, major general contractors are using technology such as AI estimating software. The technology enables them to speed up the takeoff process and shift their focus towards high-value activities such as scoping and value engineering.

Read further to learn the cost to build a hospital and the different factors that influence it. 

Disclaimer: The pricing stated here is based on average data from third-party research. Prices may still vary due to differences in seasonality and supplier.

How Much Does It Cost To Build a Hospital Per Square Foot?

A new hospital's development costs can range between $200 and $625 per square foot. On the low-end, a micro-hospital with 60 beds, an emergency department, outpatient surgical facilities, and limited administrative areas could cost as little as $52 million. But for large private hospitals, a 500,000 square-foot facility with 150 beds, administrative areas, specialty units, and extensive operating rooms could cost as much as $210 million.

How Much Does It Cost to Build a Hospital?

Location is one of the many factors that can heavily impact the cost of building medical establishments. This is because the market demand, availability of construction materials, and inflation rates can vary between cities and countries. 

Statista reports that in the first quarter of 2022,  Los Angeles had one of the highest general hospital construction costs in the U.S. with an average of $772 per square foot. According to the same report, Las Vegas had the lowest average construction cost of $437.50 per square foot. 

Average Cost to Build a Hospital Per City in 2022

The table below shows a summary of the average construction costs per city in the United States during the first quarter of 2022. It also includes their low-end and high-end costs per square foot in U.S. dollars. Source: Cost to build a hospital in the USA for 2022 from HowMuches and Statista.

Average Cost to Build a Hospital Per City in 2022

The scatter chart below visually compares the differences in average hospital construction costs between the cities in the U.S. during the first quarter of 2022.

Factors that Impact Hospital Construction Costs

The national average to build a hospital costs between $60 million and $187.5 million on average. The wide range of associated costs can be attributed to various factors such as hospital size, type, number of beds, location, equipment, and supply costs. Read further to learn more about each factor below. 

• Hospital Size

The hospital provides healthcare services to patients suffering from a variety of diseases. Because of the high risk of germ contamination especially with the recent pandemic, a spacious area is required.

Thus, the average hospital needs roughly 2,500 square feet per bed, which means a 120-bed hospital is approximately 300,000 square feet. This will help maintain distance between people and also accommodate healthcare equipment. If hospital costs range between $200 and $625 per square foot, a 120-bed hospital can cost between $60-$187.5 million.

• Hospital Type

Hospital construction costs are not only impacted by size and location, but also by the goal of the project and the level of equipment present in the facility.  For example, temporary emergency hospitals aim to cater to sudden spikes in patients and may not have the medical equipment to handle more serious needs. On the other hand, premium healthcare facilities aimed at long-term patient care will invest in more modern equipment that will inevitably cost more. Read further to discover the three different types of hospitals, and how they vary in purpose and medical equipment needs.

Cost to Build a Hospital by Type (Labor Included)

The table below shows a summary of the three different hospital types along with their low-end and high-end costs. 

1. Emergency Hospital - $200 to $500 Per Square Foot

Despite being larger than a micro-hospital, emergency hospitals are cheaper because they're not built with the same materials and practices. They are makeshift buildings that can be constructed within days or weeks using prefabricated compartments such as shipping containers. They are not intended for long-term use and are built to serve communities during disasters like war and pandemics.

2. Micro Hospital - $280 to $400 Per Square Foot

Micro hospitals are permanent structures that serve as urgent care facilities, but with the medical supplies and equipment to handle more serious needs.

Compared to full-scale hospitals, micro-hospitals are much smaller in size and can only serve 30 - 60 patients a day. By treating patients and sending only those who require more specialized care to full-scale hospitals, they can help reduce the patient load in larger hospitals. They also remove large costs involved in building a full-scale hospital.

3. Smart or Modular Hospital - $500 to $625 Per Square Foot

Smart hospitals are full-service hospitals built by assembling prefabricated modules into a digitalized layout. Its construction is much more costly than the alternatives because they invest in several advanced features that improve patient care, such as:

- Automatic Sliding Doors - Helps patients and families move around the hospital with ease.

- Intelligent Daybeds (With Window Controls) - Helps patients easily customize their environment to suit their needs with minimal help.

- Switchable Privacy Glass - Helps hospital staff observe infectious patients quickly with a switch while reducing the risk of cross-contamination.

The smart technology and medical equipment in smart hospitals largely impact the costs. But by leveraging prefabricated materials, developers and general contractors can speed up the construction project by as much as 40% which helps finish construction faster and repay loans sooner.

Number of Hospital Beds

Hospital beds determine the patient capacity. The larger the patient capacity, the higher the construction costs. A new hospital typically allocates 590 to 810 square feet per patient bed. But because the recent pandemic encouraged social distancing, some hospitals allocate 2,500 square feet per bed with construction costs including labor typically falling between $500,000 and $1,500,000 per bed. 

Cost to Build a Hospital Per Bed (Labor Included)

• Hospital Equipment and Supply Costs

Below are the differences between hospital equipment and supply costs.

1. Equipment Costs 

Hospital equipment is categorized as a semi-permanent fixture. Some examples are patient monitors, surgical lights, and x-ray viewers. They can cost between $300 - $400,000 depending on the size and type of hospital.  

2. Supply Costs

In contrast, supplies are consumed during patient care and are thrown away afterward. This includes protective equipment, pharmaceuticals, and even office supplies. While they make up about 15%-40% of the hospital’s regular expenses, they are still dependent on the patient volume of the hospital. Supply costs are not included in the construction costs, but newly established medical buildings need to be fully stocked before becoming operational.

• Hospital Labor Costs   

In building a hospital, labor accounts for 60% of the costs, while the rest goes towards materials. Different construction professionals are involved in the building process, such as an architect, a general contractor, and engineers. Labor costs can range between $30 and $500 per hour, and can be impacted by location, the scope of work, skills, and experience level. Read further to learn more about some of the different professionals that will take part in the hospital construction.

Average Labor Costs to Build a Hospital 

The table below shows a summary of the average labor costs per construction profession. It also includes a description of their roles along with their low-end and high-end costs per hour, per square foot, or per project costs. 

Source: Data for labor costs taken from Fixr. 

Speed-Up Cost Estimation for Hospital Projects with Technology

Several factors impact the cost to build a hospital. This includes the location of the project, hospital size, hospital type, number of hospital beds, hospital equipment, the volume of hospital supplies, and labor costs. 

While building larger hospitals often costs more than building a smaller one, size isn’t the only determinant of construction costs. Just like building a micro-hospital costs less than building an emergency hospital, factors such as equipment, purpose, materials, and finishing practices can heavily impact the final costs. 

Want to speed up the takeoff and cost-estimation process of your healthcare construction project? Leverage our AI estimating software, Togal.AI. With Togal.AI, you can complete takeoffs in seconds with 97% accuracy. 

Not only does it help you speed up the cost estimation process with reduced human error, but it also enables you and your team of estimators to focus on more important tasks such as scoping and value engineering. 

Experience how Togal.AI can help finish takeoffs in seconds and increase the profitability of your healthcare construction project by booking a free demo. A dedicated product manager will help you explore how easy it is to integrate Togal.AI into your workflow.