Hospital Construction Costs in the USA
The national average cost to build a hospital ranges from $64,000,000 to $192,500,000. The average project costs $114,500,000 for a new 300,000 sq. ft. hospital that includes administrative areas, emergency and operating rooms, and enough space for 120 beds. At the low end, projects could be as low as $54,200,000 for a 150,000 sq. ft. micro hospital with 60 beds, an emergency department, outpatient surgical facilities, and limited administrative areas. Without referencing the cost of medical equipment, the normal costs to build a hospital are about $400 to $700 per square foot to build.
Cost Breakdown in Major Cities
- Honolulu: $475 to $760 per square foot
- New York City: $475 to $700
- Los Angeles: $470 to $700
- San Francisco: $450 to $650
- Boston: $400 to $650
Factors Influencing Hospital Construction Costs
The average cost of hospital construction per bed ranges from $500,000 to $1,500,000, which usually depends on the type of hospital and how much square footage per bed is required. The beds are a large part of every hospital. Beds are in the ER, trauma centers, pre- and post-surgical areas, and short-term and long-term inpatient areas and waking rooms.
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.
Regulation and Land Acquisition
The Clinical Establishments (Registration and Regulation) Act, 2010, requires all medical establishments to get a registration certificate. The land acquisition process is one of the essential steps in starting a hospital building. The cost of acquiring land for hospital building varies depending on various factors such as location, size, and local zoning regulations.
CEO Compensation in the Healthcare Industry
CEO pay depends on hospital revenue. At hospitals making under $50 million per year, CEOs make $274,300 on average. But at hospitals making over $1 billion yearly, CEO salaries average $1.4 million. Although large hospitals pay more than $1 million, the average 2020 health care CEO salary is $153,084.
Hospital Business Profitability
The average emergency room cost is $2,500 and the average hospital stay is $15,000. Hospital operations are expensive, so your profit margin will be about 10%. In your first year or two, you might have 100 emergency room visits per month and 50 inpatients, bringing in $12,000,000 in annual revenue. This would mean $1,200,000 in profit, assuming that 10% margin.