The Impact of Hospital Infrastructure Investment on Quality of Care.

Hospitals spend billions of dollars annually on major construction projects and facility upgrades, but limited research to date has examined whether this expenditure benefits patients. Using a novel dataset of California hospital construction projects opening between 2010 and 2019, we estimate the effect of project opening on patient experience and clinical measures using a difference-in-differences framework. We find sizable, statistically significant improvements in patient experience-cleanliness, quietness at night, and likelihood to recommend-with effects persisting for at least 2 years after opening. We find no measurable impact on clinical outcomes, 30-day mortality, and readmission for heart attacks and heart failure. These results suggest infrastructure investments meaningfully affect perceived care environments but may not translate into near-term changes in clinical performance. Policymakers and hospital leaders should weigh these returns when evaluating capital expenditures and potential support for hospital construction.