Healthcare construction costs for 2023

Many factors contribute to the rising costs of healthcare construction—the need for critical system upgrades, infectious disease prevention, environmental responsibility measures, labor shortages, inflationary impacts and supply chain disruptions are some of the most noteworthy.

According to Gordian’s RSMeans Online Building Models, the national average cost per square foot for commercial new construction of hospitals is more than 15% higher today than in 2019.

The evolution of treatments and technology advancements are a few reasons for hospital systems to expand and improve their facilities. Facilities upgrades done to reduce the risk of viral outbreaks are here to stay. Partitioning, automated kiosks, hand sanitation devices, improved signage and lighting, and socially distanced waiting areas are now expected when entering healthcare facilities.

Current and accurate construction cost data is critical to help healthcare project owners implement the facilities upgrades their patients need. Gordian’s data features over 100 building models, including hospital buildings. These localized models allow architects, engineers and other preconstruction professionals to quickly and accurately create conceptual estimates for future builds.

This table shows a five-year view of costs per square foot for three-story hospital buildings.

Visit rsmeans.com/bdandc for more information about RSMeans data from Gordian.

Location	2019	2020	2021	2022	2023
National Average	$362.69	$371.48	$382.12	$400.11	$419.18
New York, NY	$484.88	$494.19	$506.94	$523.11	$540.45
Chicago, IL	$436.50	$444.21	$456.40	$474.03	$494.76
Boston, MA	$414.67	$427.46	$433.44	$454.36	$479.38
Los Angeles, CA	$409.55	$419.04	$430.83	$452.05	$475.20
Ann Arbor, MI	$362.97	$369.02	$382.83	$396.83	$409.43
Omaha, NE	$330.20	$340.43	$352.74	$363.59	$383.59
Denver, CO	$323.44	$333.80	$345.51	$362.23	$378.97
Atlanta, GA	$322.76	$329.05	$342.71	$359.46	$375.52
Phoenix, AR	$320.55	$327.81	$332.73	$351.97	$373.71
Houston, TX	$312.00	$320.44	$329.72	$341.67	$357.30

Please note: Square foot models are used for planning and budgeting and are not meant for detailed estimates.

During the second week of November, the architecture firm NBBJ launched a podcast series called Uplift, that focuses on the transformative power of design. Its first 30-minute episode homed in on designing for behavioral healthcare facilities, a hot topic given the increasing number of new construction and renovation projects in this subsector.

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