Capital Expenditure Trends in California Hospitals: 2002–2007

Abstract

From 1997 to 2001, hospitals expanded their capital expenditures by only 1% while future capital investment was expected to grow by 14% (Healthcare Financial Management Association 2004). Analyzing California hospital data from 2002 to 2004 to 2005 to 2007, the author identified and classified capital expenditures into 4 major types. Between the 2 study periods, growth in capital purchases exceeded 23% for medical equipment, expansion, and maintenance types of projects. Large nonprofit hospitals capturing a greater share of the market and serving fewer uninsured and government payers had a greater number of these types of capital purchases.

Keywords:

• California hospitals
• ownership
• types of capital expenditures

ACKNOWLEDGMENTS

This research was funded by the California Healthcare Foundation and Hospital Capital Expenditure. Data were provided by Dr. Craig Paxton and Ms Penny Stroud of Cattaneo & Stroud, Inc.