Healthcare Design’s 2024 Architecture/Engineering/Construction Survey

To read Part 2 of Healthcare Design’s A/E/C Survey report, go here.

Financial pressures and budgetary constraints continue to color the landscape of the U.S. healthcare system, creating a complex design and construction outlook, shared the respondents to Healthcare Design’s 2024 A/E/C Survey.

The survey, open to any U.S. architecture/engineering or construction firm that completed at least one healthcare project in the year prior, sheds light on a post-COVID-19 environment defined by lots of healthcare system consolidations and the opportunities and challenges that come with them.

Meanwhile, the need to integrate advanced technologies, establish flexible care environments, and explore bottom-line friendly renovation or reuse projects is inspiring the facilities being delivered amid this climate, respondents indicate.

The biennial A/E/C Survey was conducted online in January and February; 31 firms participated. All financial and business data reflected in this report is tied to their 2023 results.

Together, healthcare represents an average of 51 percent of the responding firms’ overall work; 38 percent of respondents reported healthcare as their primary business segment (60 percent or more of their business).

Project proposals, RFPs, and revenue in 2023

Participating firms represent a reported total of 2,583 healthcare projects completed in 2023. When considering if that was more, fewer, or about the same as the prior year, 39 percent of firms said they completed more projects, followed closely by 35 percent that saw about the same.

Twenty-six percent of respondents reported completing fewer projects than in 2022. Comparatively, in the 2022 A/E/C Survey, assessing healthcare business in 2021, 45 percent of firms reported completing more projects than the prior year, 36 percent about the same, and 19 percent fewer.

This year, firms reported a total of 3,254 requests for proposals (RFPs) received in 2023, which 50 percent said was more than the prior year. Meanwhile, 30 percent of responding firms said their number of RFPs was about the same, and 20 percent saw fewer.

In the 2022 survey, results were similar, although more firms were experiencing growth at the time in the pandemic rebound. For example, 60 percent of respondents received more RFPs than the year prior, 21 percent about the same, and 19 percent fewer.

Healthcare contracts and construction costs

Likewise, 45 percent of this year’s respondents said they signed more new contracts than in 2022, 29 percent about the same, and 26 percent fewer. In the 2022 survey, 52 percent reported signing more contracts, 27 about the same, and 21 percent fewer.

In total, the firms reported 2,350 new contracts signed last year at a combined value (construction cost excluding land) of $27.7 billion. Breaking that down by service provided, the firms reported 73 percent of the business was architecture based, 18 percent engineering, and 9 percent construction.

As for total healthcare revenue, the responding firms represent a reported $2.2 billion of revenue in 2023. Of that, 76 percent was architecture based, 17 percent engineering, and 7 percent construction. Looking ahead, respondents shared that a collective 3,072 projects remained in progress at the close of 2023 and 1,479 projects are scheduled for completion in 2024.

(To view this article with corresponding charts, please see the digital edition.)

Growth in healthcare renovations, hospital projects

For 2023, firms saw a continued uptick in the number of renovation projects versus new construction, with 56 percent of projects completed last year renovations versus 44 percent new construction.

This maintained the climb in renovations seen in the 2022 survey, when renovations comprised 60 percent of projects completed (survey results in prior years consistently captured a near 50-50 breakdown).

Of firms’ 2023 work, 51 percent was hospital projects, 39 percent outpatient, 7 percent infrastructure only, and 4 percent skilled nursing/rehabilitation.

Completed healthcare projects include hospital, outpatient, infrastructure, skill nursing/rehab

The results were very similar to those in the last survey, when respondents reported 52 percent of completed projects was hospital based, 36 outpatient, 6 percent infrastructure, and 6 percent skilled nursing/rehab.

Completed projects leaned heavily toward smaller footprints, with 66 percent reported between 5,000 and 19,999 square feet. The next largest size range reported was 20,000 to 49,999 square feet, but even that was at just 15 percent. Results in 2022 captured a similar breakdown; at that time, 55 percent fell into that smallest range, with 20 percent in the second.

Meanwhile, 45 percent of firms said sizes in 2023 were about the same as those built in 2022, whereas 34 percent reported they were smaller and 21 percent larger.

Shift in project values, primary drivers

For project values, another shift was captured. Respondents reported 36 percent of projects completed fell in the $1 million to $9.9 million range. Twenty-two percent were valued less than $500,000, 14 percent between $10 million and $19.9 million, and 13 percent between $500,000 and $999,999.

Conversely in 2022, 33 percent of projects completed in 2021 fell at the below $500,000 mark; next, 29 percent were valued between $1 million and $9.9 million and 16 percent between $500,000 and $999,999.

When asked if project values were higher, lower, or about the same in 2023 when compared to 2022, 43 percent of firms said they were higher, while 36 percent reported about the same and 21 percent lower.

Similarly in 2022, 48 percent of firms reported higher values, 41 percent about the same, and 11 percent lower.

Renovation, modernization, expansion, growth of outpatient sites, among healthcare project drivers

As for the most common client need that drove new projects last year, firms focused on two primary drivers: the renovation/modernization of space (38 percent) and expansion of/addition to an existing facility (28 percent). The next closest need was growth of outpatient sites, selected by 14 percent of respondents.

The 2022 survey followed the same cadence, with the above ranking as the top three choices then, as well. When asked to consider all the needs pushing new projects today and to rank them in order, respondents additionally chose renovation work with addition, growth of outpatient sites, repurposing space for new use, replacement of outdated buildings, and consolidation of existing facilities/services.

Top 3 client goals in healthcare projects: revenue growth, flexibility, addressing aging facilities

Next, firms identified the number one goals clients were wishing to achieve via new projects in 2023. The top three choices were:

  • growing revenue (28 percent)
  • achieving future flexibility/adaptability (21 percent)
  • addressing aging building stock (17 percent).

Improving the patient experience, supporting population health

When ranking all options, firms indicated other top-of-mind goals include improving patient experience/satisfaction, adding service lines/specialties, improving staff experience/satisfaction, and supporting population health/improving access to care. This, too, continued results captured in 2022.

Lastly, the survey asked firms to consider their own internal challenges, with 30 percent selecting construction cost escalation/labor shortage as the biggest one they faced in 2023. Next was talent acquisition at 24 percent, followed by canceled/delayed projects at 13 percent and decrease in number of projects at 10 percent.

Healthcare project budgets and funding

Again, when all possible options were ranked, other top vote-getters were decrease in size and/or budget of projects, clients unable to fund projects, achieving client buy-in and managing volume/scope of end user input, and pressure to lower fees.

While these results, too, followed the pattern of responses seen in 2022, a notable change is construction cost escalation/labor shortage bypassing talent acquisition as the most-chosen firm challenge. In 2022, talent acquisition was selected as the top challenge by 34 percent of firms and construction cost escalation/labor shortage by 25 percent.

Jennifer Kovacs Silvis is brand director of Healthcare Design. She can be reached at

To read “2024 Healthcare Design A/E/C Survey Sheds Light On Industry Trends: Part 2,” go here.