Reducing Capital Costs

Jan 11, 2016

Why: The United States spends a significantly higher percentage of its Gross Domestic Product (GDP) on healthcare than any other nation in the world. Healthcare spending in the United States reached $2.9 trillion and accounted for 17.4% of the GDP in 2013. This rate is approximately 2.5 times the world average of 6.9% of GDP. Compounding this disparity is the issue that U.S. healthcare expenditures are expected to grow at an average annual rate of 5.8% and reach 19.6% of GDP by 2024. At that point, federal, state and local governments are forecast to shoulder 47% of the nation’s spending on patient care.. The current and forecast level of healthcare spending strains both public and private funding, and imposes a financial burden on the nation, which places the United States at a competitive disadvantage on the world .

What: The healthcare landscape is shifting with the passage of the Affordable Care Act, changing reimbursement structure, aging demographics, increased competition from both regional and national systems, heightened focus on ‘customer’ satisfaction and the growing cost of healthcare delivery. In the past, the focus has been on managing patient flow through the system and rising costs, which could simply be passed through to those funding the delivery of care. Now, competition and reimbursement practices are forcing providers to focus on cost reduction and operational efficiency, while at the same time improving patient care are expected to provide effective, efficient, high-quality care at an affordable cost.The objective of this white paper is to identify new, innovative, and effective actions concerning capital expenditures that healthcare providers are taking to help meet this challenge.

How To facilitate the collection of relevant and reliable data regarding the white paper topic, a team of healthcare experts was assembled by the Academy of Healthcare Infrastructure, a program of the National Institute of Building Sciences in Washington, D.C. The team consisted of 11 industry professionals with extensive healthcare expertise from leading healthcare providers, designers and contractors. Prior to commencing the interview process, a literature search was initiated to identify relevant work with a focus on the area of study, and an interview outline was developed. Over a four-week period, interviews were conducted with each member of the team. The interviews were by phone, and the length of each ranged from 60 to 90 minutes. Interviews were transcribed.

Dennis Bausman, PhD (Clemson University)
Presented at: 
National Institute of Building Sciences Building Innovations 2016 Conference
Published & professionally reviewed by: 
Academy for Healthcare Infrastructure

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