Hospital buildings and wings have a tendency to become functionally obsolete for specific services before they become physically obsolete — often resulting in inefficient space utilization, high labor costs, and staff and patient dissatisfaction. The cost of renovation may exceed the cost of new construction and may even take longer if multiple construction phases are required to maintain existing operations. However, this depends on the services to be accommodated, the age and general characteristics of the space, building codes, replacement alternatives, and the reuse potential of the vacated space.
Current Trends
Read about current trends in utilization, medical practice, care delivery, and regulations and their facility impact.
Fluctuating Demand for Hospital Beds
Starting in the 1980s, healthcare strategists and policy experts encouraged hospitals to reduce their surplus inpatient bed capacity in response to declining admissions, use rates, and lengths of stay — as a result of the advent of Medicare’s diagnosis related groups (DRG) payment methodology in the public sector and managed care in the private sector. Hospitals responded to changes in demand by shifting their resources. Between 1980 and 2003, community hospitals in the United States took 175,000 inpatient beds out of service — an 18 percent reduction — through downsizings, consolidations, and closures. At the same time, skilled nursing and subacute care facilities were developed to provide a less expensive and less resource-intensive alternative for patients requiring a lengthy recuperation. Home health agencies also proliferated. Since 2003, the number of hospital beds has declined less dramatically — a reduction of another 12,700 beds. Although, nationally, inpatient admissions rose from 1992 to 2012, both the rate of inpatient admissions per 1,000 population and the average length of stay have declined to an all time low — resulting in an overall decline in the demand for inpatient beds.