What is Driving The Rise in Outpatient Services
Hospitals and even larger centralized healthcare facilities are gradually morphing into outpatient care providers. This transformation is being driven by various factors such as high costs of inpatient hospital care, patient preferences favoring convenience and comfortability, policy changes, and financial incentives.
Before the pandemic, hospitals were gradually adopting methods to provide services outside of the traditional inpatient setting. However, the pandemic highlighted the need for health systems to improve organizational structures to alleviate strains on emergency departments, as well as bring care closer to patients.
As medical knowledge and technology advance, the demand for more flexible patient care has increased significantly. For example, operations that were previously performed only in hospital operating rooms can now be done in outpatient settings with the same high levels of care and positive outcomes.
Healthcare systems may need to adopt new organizational structures that extend beyond the four walls of the inpatient hospital setting.
What This Means for Health Systems
In order for healthcare systems to better serve one’s patient base and community, expanding outpatient facilities to include surgery centers, imaging facilities, infusion centers, etc. will be beneficial. The ability to acquire infrastructure in such a way that is favorable for outpatient care is ideal for capturing this growing market.
In fact, ambulatory care is one of the fastest-growing and high-margin segments within the healthcare industry. Many health systems have benefited from investing in ambulatory care, yet health systems can do much more to take advantage of opportunities in this space.
That being said, we must understand what this decision entails for health systems. With a shift away from historically singular hospital facilities to diversified healthcare campuses and outpatient options, turf wars can emerge. Identifying needs and alignment with a strategic plan upfront will be essential. Additionally, It’s important to understand how a health system’s specific circumstances help to inform the decision of whether or not to add an ambulatory center.
For example, when considering an ambulatory strategy it’s helpful to understand where the best place to locate in the market is and how to structure a deal financially. A health care system’s decision on whether or not to invest in ambulatory care services will be largely dependent on the following factors: projected case volume and revenue, anticipated internal and external barriers, prospecting investment options, and calculating contribution margins, investment costs, and break-even periods.
Before committing to a loan, lease, or purchase, we recommend consulting with healthcare real estate experts.
About HBRE
Headquartered in Nashville, Tennessee, HBRE is a full-service commercial real estate firm specializing in healthcare real estate. With over 50 years of combined industry experience serving 28 states across the U.S., we deliver exclusive healthcare solutions so you can provide the best patient care.
If you have any questions about leasing, buying, or selling a commercial property in Nashville or beyond, please connect with our team today.
