How Much Does It Cost To Build A Hospital

How Much Does It Cost To Build A Hospital?

Building a hospital is no small feat. It requires detailed planning, careful budgeting, and considerable resources. At the end of the day, having hospitals in local communities is essential for providing expert healthcare, and it’s worth the effort. For those looking to take on such an ambitious project, the question remains: How much does it cost to build a hospital?

Here at Royaltakeoffs, we’ll be exploring the various factors that contribute to the cost of building a hospital. We’ll look at examples of hospitals around the world and uncover what it costs to construct one from scratch. Whether you’re looking to start a project or just curious about the cost of such an endeavor, this guide has all the information you need. Let’s get started!

The average cost of building a hospital depends on numerous factors and types of facilities. According to U.S News & World Report, the average cost of constructing a new acute care hospital is estimated to be around $1 billion. This estimate includes construction costs for all components of the hospital: from the administration building to the emergency department to inpatient units.

Land Acquisition and Site Preparation:

The initial step in constructing a hospital is to locate and prepare a suitable plot of land. The cost of the land may differ based on its location, accessibility, and local market conditions. Preparing the site will involve clearing, grading, and installing utilities, which will increase the total cost.

The cost of acquiring appropriate land and preparing the site typically ranges from $500,000 to $5 million, depending on the size and location of the hospital.

Architectural and Engineering Design:

It is essential to hire architects and engineers when designing a hospital that meets functional requirements, safety standards, and aesthetic considerations. The cost of their services may vary based on project complexity but generally falls between 6% and 12% of the total construction cost. For a $100 million hospital project, the fee would range from $6 million to $12 million.


During the construction phase, the hospital is built which includes creating the structural framework, adding interior finishes, and installing essential systems. The cost of construction varies depending on the size, number of floors, design complexity, and local labor market. Typically, the cost ranges from $200 to $700 per square foot, meaning a 200,000-square-foot hospital would cost between $40 million and $140 million to construct.

Medical Equipment and Technology:

Acquiring medical equipment and technology is a major cost when building a hospital. This can include diagnostic machines, surgical equipment, patient monitoring devices, and IT systems. The expense will depend on the hospital’s services and desired sophistication level. Typically, medical equipment and technology can make up 20% to 40% of the whole project cost. For instance, for a hospital with a budget of $100 million, this cost can range from $20 million to $40 million.

Furniture, Fixtures, and Fittings:

Hospitals need furniture, fixtures, and fittings to make a comfortable and functional space for patients, staff, and visitors. These include patient beds, chairs, desks, lighting fixtures, and specialized medical furniture. Normally, hospitals allocate 5% to 10% of their total construction cost to cover the cost of furniture, fixtures, and fittings. For example, a $100 million hospital may need to spend between $5 million to $10 million on furniture, fixtures, and fittings.

Infrastructure and Utilities:

For hospitals to function properly, they need strong infrastructure and utilities. This includes electrical systems, heating, ventilation, air conditioning, plumbing, water supply, waste management, and communication networks. The cost of these things can be different depending on the size and complexity of the hospital, as well as local regulations. On average, infrastructure and utilities usually make up around 10% to 15% of the total cost to build a hospital.

Regulatory Compliance and Licensing:

When constructing a hospital, it’s crucial to follow regulatory standards and get the required licenses and certifications. This involves paying fees for zoning approvals, building permits, fire safety compliance, and healthcare accreditation. The cost of meeting regulatory requirements and obtaining licenses may vary depending on the location and local rules, but it usually amounts to 1-3% of the total construction cost.

Landscaping and Outdoor Spaces:

It is important to design attractive and practical outdoor areas for the benefit of patient health and to enhance the hospital’s overall atmosphere. Such spaces may include gardens, walkways, parking lots, seating, and landscaping. Generally, 2% to 5% of the total construction budget is allocated for these outdoor spaces. For instance, in a hospital with a $100 million budget, this would amount to $2 million to $5 million.

Contingency and Miscellaneous Costs:

Allotting a portion of the budget for unforeseen circumstances and miscellaneous expenses during construction is important. This includes setting aside money for unexpected delays, cost overruns, and changes in project scope. To account for these contingencies, it is recommended to have a contingency budget of 5% to 10% of the total construction cost.

Professional Fees and Project Management:

When building a hospital, it’s important to keep in mind that professionals such as project managers, consultants, and legal advisors will be involved in the construction process and will charge fees. These fees, typically ranging from 2% to 5% of the total construction cost, should be factored into the overall cost calculation.

What Are The Different Types of Hospitals and Their Average Building Costs?

Hospitals come in all shapes and sizes, serving a wide variety of needs. From small clinics to large, multi-story medical centers, there are many different types of hospitals to choose from. Depending on the type chosen, the average construction cost will vary significantly. Here is an overview of some common hospital types and their associated building costs:

Emergency Department Hospitals:

These hospitals usually cost between $150 and $250 per square foot to build. The higher end of this range includes additional staffing, technology, and equipment costs.

Community Hospitals:

Community hospitals generally cost an estimated $200 to $350 per square foot for construction. This price can vary depending on the size of the hospital as well as its geographical location.

Academic Medical Centers:

As one of the most expensive types of hospitals to build, academic medical centers can cost anywhere from $400 to $500 per square foot in construction costs.

Children’s Hospitals:

These specialized hospitals are often built with unique features like child-friendly decor and specific equipment that caters to the needs of their young patients. As such, they can cost anywhere from $250 to $450 per square foot in building costs.

Rehabilitation Centers:

Rehab centers are designed for long-term care and typically cost between $200 and $400 per square foot in construction costs. These hospitals often require additional services, equipment, and technology specific to the rehabilitation process.

Veterinary Hospitals:

The construction of a veterinary hospital is generally estimated at $200 to $300 per square foot, depending on the size and services offered. Veterinary hospitals typically require specialized equipment that can affect the cost associated with building one.

What is The Approximately Cost of Building a Hospital By Beds?

The cost required to build a hospital by number of beds is given:

Number of BedsLow End CostHigh End Cost
50 Beds$25 Million$75 Million
100 Beds$50 Million$150 Million
150 Beds$75 Million$225 Million
200 Beds$100 Million$300 Million
250 Beds$125 Million$375 Million
300 Beds$150 Million$450 Million
350 Beds$175 Million$525 Million
400 Beds$200 Million$600 Million
450 Beds$225 Million$675 Million
500 Beds$250 Million$750 Million
1,000 Beds$500 Million$825 Million


When it comes to building a hospital, the costs can mount quickly depending on the scale and complexity of the project. Having an understanding of what to expect financially is essential for any organization because it will help them come up with a plan to make sure the project finishes on time and within budget.

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