Healthcare Design’s 2026 Architecture/Engineering/Construction Survey
- Slower capital decisions and shrinking project scopes are becoming more common, increasing demand for flexible design solutions.
- Industry leaders note a shift away from large-scale acute care toward targeted renovations, freestanding emergency departments, outpatient hubs, and behavioral health projects.
- Labor shortages continue to affect healthcare construction.
- AI is seen as a major opportunity and a significant unknown in healthcare design, with potential to reshape space utilization, infrastructure planning, and operational decision-making.
Healthcare Design’s biennial A/E/C Survey provides a design and construction outlook on the healthcare design sector. The survey is open to any U.S. architecture/engineering or construction firm that completed at least one healthcare project in the year prior.
In addition to shedding light on business and financial data, the survey asks participating firms to provide open-ended responses to capture the challenges and opportunities shaping healthcare design today, offering a clearer picture of the industry’s evolving landscape.
For the 2026 survey, published in Healthcare Design’s April issue, many respondents echoed concerns about rising construction costs, tariffs, and material price volatility, noting that these pressures are pushing already strained budgets to the limit, shrinking project scopes, or slowing capital decisions.
“We expect to see additional challenges as our healthcare clients navigate staffing shortages, rising costs of care, and declining reimbursements,” said Mark Bultman, healthcare market sector leader at HGA (Milwaukee).
As a result, many health systems are taking a more deliberate approach before committing to major projects. “Many clients are reassessing scope and phasing to align with available funding while still addressing aging infrastructure and operational needs,” said Alexandra Kramer, mechanical engineer/business development director at Apogee Consulting Group, P.A. (Cary, N.C.).
How are rising costs and funding pressures reshaping healthcare capital planning and projects?
Slower capital decisions and shrinking project scopes are becoming more common, increasing demand for designs that deliver flexibility and clear value. “This is increasing demand for efficient and flexible design with clear value,” said Dan Thomas, national healthcare director, MOREgroup / E4H Environments for Health Architecture (Plano, Texas).
As capital planning grows more complex, some organizations are delaying long-needed facility improvements. Michael Lied, principal at GBBN Architects (Cincinnati), said investments such as aging infrastructure upgrades and patient experience improvements are often deferred while health systems prioritize projects tied to strategic revenue growth, including new clinical programs, service line expansions, and new locations.
“These financial pressures are also driving more short-term decision-making, sometimes at the expense of long-term performance and staff and patient experience. In some cases, organizations are moving forward with capital projects that deliver near-term revenue growth that may complicate the realization of their long-term facility master plans.”
Healthcare renovation projects and outpatient facilities dominate the pipeline
Financial pressures are also reshaping the types of projects moving forward. Kevin Harney, vice president/principal at ESa (Nashville, Tenn.), noted a shift away from large-scale acute care toward targeted renovations, freestanding emergency departments, and outpatient hubs.
“While these smaller scopes present unique scheduling and staffing challenges, they also offer significant opportunities for design innovation in the rapidly growing ambulatory sector,” he said.
At the same time, demand is growing in several specialized clinical areas. Jim Albert, principal and healthcare studio leader at Hord Coplan Macht (Baltimore), pointed to increased activity in neurosciences, interventional radiology, cardiac support, mother-baby services, and mental health.
“Increased research into evidence-based design principles for mental health patients has generated new design recommendations and best practices for mental health facilities, and many facilities are investing in wholesale changes to make all areas patient-safe and behavioral-focused.”
Expanding access to care beyond urban hospitals
Some firms see opportunity in rethinking where and how care is delivered. Solvei Neiger, partner at ZGF (Portland, Ore.), said shifting demographics and workforce challenges are expanding the need for diverse care settings beyond traditional urban hubs.
“Facility design must evolve to meet shifting demographic needs, as an aging population, staffing shortages, and rising housing costs drive demand for more diverse care settings beyond traditional metropolitan hubs,” she said. “At the same time, large medical centers must advance specialty care, innovation, and provider training while adapting to changes in academic research and the broader health system.”
Still, access to care remains a concern. “While large hospitals are increasing capacity, access to care, particularly in non-urban settings, is endangered,” said Michael Pukszta, director, health practice, at CannonDesign (St. Louis). “Solving for this dilemma will include both operational and capital challenges that will take some time to resolve.”
Construction labor shortages impact healthcare building projects
Labor shortages continue to affect construction as well. With large technology and manufacturing projects competing for the same skilled trades, healthcare projects are feeling the squeeze.
Ben Huffman, senior vice president and account manager at Skanska USA Building (Durham, N.C.), said early engagement has helped teams secure labor and maintain schedules.
“When engaged early, our project teams provided certainty in the management of critical project assets and generated trade interest to maintain project schedules. Our teams have also had success in implementing prefabrication, design-assist and project labor agreements to address construction industry labor challenges.”
Workforce shortages are also affecting design firms themselves.
“The greatest challenge over the past several years—and continuing into this year—has been hiring. Our work is characterized by high engagement, high touch, and high complexity, which requires a rare combination of skills, experience, and dedication,” said Derek Noble, principal and vice president of marketing and business development at Shepley Bulfinch (Hartford, Conn.).
Renovation and modernization opportunities in healthcare facilities
Despite the pressures, firms continue to identify opportunities—particularly in renovation and modernization projects that reposition existing facilities for new care models and patient-centered environments.
“The opportunity lies in positioning these facilities to perform now and adapt over time, using flexible infrastructure and smarter, integrated building systems,” said Richard Witt Jr., executive vice president, client strategy and engagement/chief client officer at AE Works Ltd. (State College, Pa.).
Project delivery may also evolve. Mariah Kiersey, healthcare studio leader – architecture at Ankrom Moisan (Portland, Ore.), said firms are hopeful that projects will move more steadily through design and construction phases.
“One of the largest challenges that Ankrom Moisan has faced in previous years are long pauses between project phases, but we anticipate an opportunity for projects to continue through all design and construction phases without long pauses between stops and starts in the coming year.”
AI in healthcare design: flexibility, infrastructure, and future planning
Artificial intelligence is emerging as both a major opportunity and a significant unknown. Many firms expect it to reshape space utilization, infrastructure planning, and operational decision-making across the project lifecycle while raising new questions about designing for rapidly evolving technology.
“The challenge is that flexibility takes discipline, not optimism, and technology can’t be treated as an add-on,” said Craig Passey, vice president and director of health at SmithGroup (Phoenix). “The opportunity is getting those early decisions right: making smarter first-cost investments that protect long-term performance and designing environments that can absorb rapid change and new workflows without constant renovation.”
Jackie Foy, global director, health at HDR (Kansas City, Mo.), similarly noted opportunities in helping clients plan for more adaptable facilities.
“Many inpatient facilities are actively rethinking what a truly universal room means across varying acuity levels,” Foy said. “The challenge, and opportunity, is to design environments that can respond to changing patient needs and evolving technologies, while also leveraging AI to shift lower-acuity care from centralized campuses into more distributed, community-based settings.”
Looking ahead, some leaders see demographic shifts shaping future demand.
Hamilton Espinosa, healthcare core market leader at DPR Construction (Phoenix), pointed to population growth driving inpatient bed demand in the Southwest and South-Central regions, along with continued investment in outpatient facilities and oncology.
“AI has the potential to fundamentally reshape space utilization, infrastructure requirements and decision-making across the entire project lifecycle,” he said. “Understanding and preparing for that shift will be critical for healthcare organizations seeking to remain resilient in the years ahead.”
Anne DiNardo is editor-in-chief of Healthcare Design and can be reached at [email protected].
To read Part 1 of Healthcare Design’s 2026 A/E/C Survey report, go here.
