Hospital capital spending is expected to rise 14% annually over the next five years, with technology topping the list of anticipated capital projects, according to a survey by the Healthcare Financial Management Association.
More than one-third, or 35%, of 460 hospital and healthcare system chief financial officers surveyed said they expected their institutions to increase bed capacity in the next five years.
The survey is included in a report, The Future of Capital Spending, the third in the HFMA's six-part "Financing the Future" series, to be released this week. The report is based on research by the HFMA and PricewaterhouseCoopers, with funding from GE Healthcare Financial Services.
Nearly three out of four CFOs said they anticipated capital spending at their institutions to increase in the next five years. Technology topped the list of anticipated capital projects, with 71.7% of CFOs anticipating investments in digital radiology systems, 64.1% in computerized physician order-entry systems and 61.3% in other major information technology initiatives.
The most common physical-plant improvements that CFOs anticipated needing were increasing emergency room capacity (50.7%) and operating room capacity (49.6%). New hospitals were least commonly cited, at 23%.
The CFOs surveyed also said they plan to increase spending by an average of 14% annually, compared with 1% annual increases from 1997 to 2001. Capital spending drivers were deemed most intense in Alaska, Arizona, Arkansas, California, Delaware, Florida, Georgia, Idaho, Rhode Island, Tennessee, Texas and Utah. States with the least intense spending drivers were Hawaii, Iowa, Louisiana, Maine, Montana, Nebraska, Ohio, South Dakota and Wyoming. Spending drivers include factors such as future population growth rate, physician demand growth rate and future health status.
Results showed that not-for-profit hospitals are more likely to increase capital spending than for-profit hospitals, and almost half of CFOs said they can't keep up with deteriorating facilities.