Hospitals are hoping their construction projects stay on schedule, because a delay of only a few months could add millions to the final cost, reports the Birmingham Business Journal. The construction industry had a 10% cost increase in 2005 and expects another 6% to 10% jump in 2006. Steel prices have skyrocketed by 25% in the past few months, fueled by heavy demand by the Chinese as their robust economy allows them to rebuild the country and prepare for the 2008 Olympics. And oil and copper prices have also increased. HCA Inc. says it forecasts its construction costs by inflating the cost of previous projects by 10% annually, and Vanderbilt estimates that a new patient tower will cost $322 per square foot to build. Average costs for hospital construction range between $265 and $275 per square foot. “I worry about this for our industry because reimbursements haven’t changed and these healthcare guys are having to provide the same quality of care for the same reimbursement, but the costs keep going up and up and up,” Jim Poole of the Birmingham, Ala.-based construction firm Robins & Morton Group told the Journal.
