Supreme Court’s Upholding of Health Care Law Could Boost Construction of Medical Facilities
July 16, 2012
Many lobbying groups and construction industry firms are displeased with the U.S. Supreme Court’s decision to uphold President Obama’s Affordable Care Act. However, some companies that design and build in the health-care sector are feeling more optimistic.
Hamilton Espinosa, national health-care group leader for DPR Construction, Los Altos, California, says one of the biggest challenges in health-care construction over the last couple of years has been the high level of uncertainty. Projects have been put on hold or cancelled altogether due to providers remaining in a wait-and-see position. With the Supreme Court’s June 28th decision, which upheld the law’s constitutionality, Espinosa believes, “health-care systems have a moment of clarity on the direction, and we expect that many will quickly move forward to put in place the facilities and infrastructure needed to meet the future demand of a nation where everyone has coverage.”
Jennifer Coskren, senior economist at McGraw-Hill Construction, reports that health-care construction starts have dropped in recent years. For example, compared to last year, construction starts were down 24% in square footage in May. However, she believes the ruling may help jump-start projects, even while the economy continues to struggle. “We feel that the industry will be able to move more confidently ahead with capital expenditure plans,” says Coskren. “Demand for health-care services is expected to increase, thanks to the over 30 million people who now will have access to health-care insurance.”
However, some industry executives are more cautious, as uncertainty lingers. Congressional Republicans have vowed to repeal the law, and although such a measure would certainly be vetoed by President Obama, a Republican president might not. Bob Nartonis, senior vice president of Minneapolis-based Mortenson Construction Co., feels the uncertainty surrounding the impacts of the health-care law will probably continue through the election and well into 2013. While the act itself is likely to have “substantial economic impact to the health-care industry,” he says, “these are overlapped by tenuous overall economic conditions in the U.S., Europe and China.”
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