Inflation, labor pressures hike Arkansas hospital project costs by 13%

The formerly $164 million expansion project at Mercy Hospital Fort Smith (Ark.) is now going to cost $186 million as increased labor costs and inflationary pressures kick in, according to a Feb. 8 Talk Business report.

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Work on the project, which will almost double the hospital’s emergency department to 50 rooms and boost the intensive care unit bed numbers to 64 from 38, began a year ago and phase one of the site work, including a new parking lot, is complete, said COO Ryan Geib. But the new budget had to be recently approved because of surging costs.

“Construction costs have skyrocketed due to inflation in the market and labor demands,” he said. “Our project was originally valued at $164 million, but we now have an approved construction budget of $186 million, driven primarily by inflation.”

Once complete, likely in early 2025, the expansion will create an additional 168 jobs as well as 400 jobs during the construction period, according to the report.

The 336-bed acute care hospital appointed Stephanie Whitaker, MSN, as its new chief nursing officer at the end of 2022 to help oversee the expansion project.

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