Hospital Revenue Losses Limiting Construction

By By Dan Hounsell
March 29, 2021
Kent E Roberts / Shutterstock.com

U.S. hospitals lost $323 billion in 2020 revenue, according to the American Hospital Association, primarily due to elective and non-emergency procedures canceled last year to prioritize COVID-19 patients. The association estimates that 2021 will see losses between $53 billion and $122 billion.

The impact on the bottom line for facilities has limited the capital projects that the hospitals are doing, according to Construction Dive.

Many projections at the beginning of the pandemic said healthcare construction would not see the same uncertainty that other sectors have. After all, hospital construction was deemed an essential service even in parts of the country where other types of construction projects were shut down.

Part of the hospital capital cash problem, said Mike Pedersen, strategy and market development director at Mortenson, is that hospitals are still tussling with the federal government and private insurers over COVID-19 patient reimbursements, which do not lend themselves to the same patient volume projections that hospitals use in their budget forecasting,

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