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University of Michigan resumes $920 million hospital build


Dive Brief:

  • Citing improving economic conditions, the University of Michigan will resume construction of a $920 million hospital in Ann Arbor that was approved in late 2019 but was shuttered last year due to the pandemic.
  • Michigan Medicine said in a statement on its website it will get back to work on the 12-story facility, which was halted in May amid wide-ranging cost cuts to offset projected losses of up to $230 million for fiscal 2020 arising from caring for COVID-19 patients while many nonemergency services were postponed.
  • “Michigan Medicine is eager to resume construction on this transformative new hospital. We know this new facility will allow more patients to access our care,” said Dr. David Miller, president of the University of Michigan Health System, in the statement. “We are often running at nearly 90 percent capacity in our current hospitals, so we are looking forward to 2025 when we expect this new building will provide us with additional state-of-the art and patient-centered care facilities.”

Dive Insight:

While COVID-19 patients flooded hospitals during the worst days of the pandemic, pushing hospital capacity in the U.S. to the brink, hospital financials dropped due to the scourge.

The American Hospital Association recently projected losses of $53 billion to $122 billion at hospitals due to the pandemic, which resulted in expenses rising, nonurgent procedures being delayed or canceled and would-be patients staying home for fear of exposure to COVID-19.

While many construction pros anticipated permanent hospital construction taking off in the early stages of the pandemic, it didn’t. Instead, rapid-response modular projects rolled out, while the U.S. Army Corps of Engineers converted other existing facilities, such as the Javits Convention Center in New York City, to emergency field hospitals with thousands of beds.

The result was hospital revenues cratering, and permanent hospital construction projects being canceled or put on hold.

But now, Michigan Medicine’s return to work on its new hospital could be a harbinger of the widely expected resurgence of delayed, shuttered or canceled construction projects going forward post pandemic, as President Joe Biden’s administration aggressively rolls out a national inoculation program to make every American adult eligible for vaccination by May 1.

In its statement, Michigan Medicine specifically cited rising vaccination rates and improving economic conditions as primary reasons it’s getting back to work.

The statement also said that the project’s planning team had resumed its design work, with the goal of starting construction in the coming months.

Features of the 690,000-square-foot hospital will include: 264 private rooms capable of converting to intensive care; a state-of-the-art neurological and neurosurgical center; high-level, specialty care services for cardiovascular and thoracic patients; and advanced imaging capabilities. Locating the services together will enable healthcare providers to quickly respond to complex cases and deliver state-of-the-art treatments, according to the release.

The facility was designed with lean principles for efficiency of flow and responsiveness to user needs. It will include:

  • Family spaces throughout and space for loved ones to visit in each patient room.
  • Centralized collaboration spaces in each patient area to enhance continuity of care.
  • Two floors with 20 operating rooms built with the latest technology.
  • Patient rooms that allow for more complex care.



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