Patients are increasingly opting for medical care in outpatient settings as hospitals and healthcare systems focus on more complex and higher-revenue treatments in hospital settings. The pandemic challenged healthcare systems to adjust their operations, and many are now thinking more strategically about long-term planning for growth and financial sustainability, according to Colliers' Q2 healthcare services report.
Healthcare spending continues to rise in the United States, reaching $4.9 trillion in 2023, or $14,570 per capita. That represented a 7.5% year-over-year increase, the highest annual growth rate since 2003, except for a spike in 2020 due to COVID-19, and was the first time since 2020 that healthcare spending outpaced GDP growth, said Colliers. Hospital services were the largest spending category, followed by physician services.
The outpatient sector is expected to grow significantly over the next 10 years as the aging population requires more frequent and complex care. Outpatient care offers new growth opportunities for some national and regional health systems through partnership or acquisition, said Colliers.
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Likewise, inpatient volume is expected to grow by 6% through 2033, also driven by the aging population who are likely to need specialists such as neurologists and cardiologists. Although inpatient care will drive significant revenues, health systems will likely seek growth opportunities beyond the hospital setting, the report predicted.
“It is likely that health systems will continue to shift some high-revenue procedures, such as joint replacements, spinal fusion, and noncomplex percutaneous coronary intervention, to outpatient facilities as part of this growth opportunity when technology is available,” said Colliers. “Outpatient facilities are also viewed as a means to access new geographic areas, serve new communities, or offer additional services.”
In many cases, health systems and providers occupy vacant retail spaces, often located in neighborhoods and areas frequented by both potential and current patients. These neighborhood outpatient facilities integrate into the larger outpatient system, creating a dynamic network for any health system, said Colliers.
Healthcare organizations are enhancing revenue through colocation, which brings multiple services together in one location. Offering related services in one place fosters loyalty and makes patients less likely to seek treatment from competitors while also promoting more effective communication among physicians, which has been shown to benefit patient care, said the report.
The potential revenue growth of outpatient services, specifically ambulatory surgical centers (ASC), has prompted significant merger and acquisition activity in national health systems. Tenet Healthcare, for example, purchased United Surgical Partners International (USPI) in 2021 to integrate its growing ASC business. Last year, USPI posted 17% growth and added 70 ASCs, driving Tenet’s overall platform, the report said.
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Kristen Smithberg
Kristen Smithberg is a Colorado-based freelance writer who covers commercial real estate, insurance, benefits and retirement topics for BenefitsPRO and other industry publications.
