NCPA - National Center for Policy Analysis


January 6, 2006

The United States is in the middle of the biggest hospital-construction boom in a half-century. During the past five years the hospital industry has spent 47 percent more on new facilities than it did in the previous five years, according to the Census Bureau.

New hospitals don't mean more beds. Instead, the money is being spent on more luxurious buildings and other amenities, including more:

  • Private rooms -- the nation's hospital system moves from semiprivate to private rooms.
  • Technology -- including bedside Internet connections and expensive air-conditioning and filtration systems to keep infections from spreading.
  • Suburban locations -- hospital beds are being shifted from inner cities to growing suburbs, where the most-affluent and best-insured people live.

Some researchers fear the new hospitals will drive up costs without improving patient survival rates and widen the gap between the medical care provided to the rich and that available to the poor.

Others say the new hospitals will provide an affluent, aging society the top-notch medical care it expects and may restrain health care costs through increased competition.

Source: Dennis Cauchon and Julie Appleby, "Hospital building booms in 'burbs: Facilities stress high-tech care," USA Today, January 3, 2006.

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