The staid and predictable healthcare industry of the past is no more. "Hospitals are going through a self-transformation of institutional form and purpose" ⁽¹⁾.

Over the last 10 years, the hospital fraction of total insurance premium dollars has dropped by 33 percent ⁽²⁾. Over the same period, almost 500 acute-care hospitals were closed. Average inpatient census has declined by 23 percent, leaving most of our nation's hospital beds empty half of the time ⁽³⁾. These grim statistics would indicate that interest in design and construction of healthcare facilities is plummeting, but such is not the case.

While new hospital construction has declined over the last 5 years, hospital renovations have increased 10 percent and the total square footage of all healthcare facility construction has remained steady at 70 to 75 million square feet ⁽⁴⁾. The U.S. Department of Commerce is actually forecasting 4 percent annual growth for healthcare construction through 1999 ⁽⁵⁾. How can the construction of healthcare facilities be increasing while total hospital revenues and inpatient census are declining? To paraphrase Arthur C. Clarke, the future of healthcare is not what it used to be.

Figure 1: Forecast of Hospital Inpatients vs. Health Facility Spending

Medical care organizations are no longer investing in the traditional patient-care facilities of the past. Hospitals, nursing homes, and clinics are retooling their facilities as the healthcare industry reinvents itself for the future.

Despite the decline in the number of inpatients, new and renovated healthcare facilities are being created for the following types of clients:

•	Hospitals attempting to reduce operating costs, position themselves for managed care contracts, and expand patient access into new medical care markets
•	Investors in new types of buildings and healthcare services, including subacute-care facilities, freestanding ambulatory care centers, hospice and home care centers, medical hotels, and primary and preventive care centers
•	Hospitals that are rebuilding to accommodate the increasing number of outpatient services (hospital-based outpatient services are predicted to increase another 30 percent over the next 5 years [3])
•	Existing healthcare facilities that wish to accommodate new, more cost-effective medical technologies
•	Clients seeking to create therapeutic healthcare environments to improve medical outcomes for a variety of patient populations
•	Clinics in hospitals seeking to use their facilities as "quality improvement tools" to increase patient satisfaction levels, support medical staff, and upgrade their public image.

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Editor's Note: This Paper is an edited version of Chapter 1, "Current Trends and Future Forecasts" from Planning Design and Construction of Healthcare Environments, published by the Joint Commission on Accreditation of Healthcare Organizations, Oakbrook Terrace IL, 1997. Reprinted with permission. For further information contact: (630) 792-5800