Big Jump in Public Health Facilities Construction in October

After a significant drop in September, health construction starts increased significantly in October: A 1.3 percent increase versus a 1.0 percent increase for other construction starts (see Table I). On a twelve-month basis health facilities construction is still positive, but has been running slower than the booming non-health construction market: 6.1 percent versus 13.3 percent.

20151201 Construction

The big jump was in public construction of health facilities, which increased 4.3 percent. Over the last twelve months, there has still been a significant drop in construction of public health facilities, so perhaps October’s increase was idiosyncratic. We should not necessarily cheer more construction starts of public health facilities. If it reflects a pick-up in building Veterans Health Administration hospitals, that is a problem, because the VHA remains racked with scandal and problems.

October’s construction starts for private health facilities were positive (0.4 percent), but only half the increase in starts of private non-health facilities (0.8 percent).  Broadly speaking, this continues the trend of the last twelve months.

We should not lament slow construction starts for private health facilities, especially hospitals. Hospitals are often the least efficient location of care. Building more of them foretells increasing health costs.

Comments (3)

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  1. Gary Williams says:

    Is that $1.1 Trillion??? Or is that Thousands instead of Millions?

    • Johnnycake says:

      Table heading says “(Seasonally adjusted, $ millions). So the figure quoted at the bottom of the table would be $1,107.4 x 1,000,000. Or $1,107,400,000. If the math is correct

      • Pretty sloppy of me, which I regret. The actual title of the release is “October 2015 construction at $1,107.4 billion annual rate.” If it were up to me, I would have written “$1.1 trillion.”