Healthcare organizations are increasingly prioritizing real estate strategies that support flexible, cost-conscious and patient-centered care, according to an analysis by Shawn Janus, Colliers’ national director of healthcare for the U.S.
Provider earnings as a share of total health spending have been declining, falling roughly 200 basis points between 2019 and 2024, with another 100 bps drop expected by 2027. This ongoing compression is prompting organizations to closely evaluate the performance of every aspect of their business, including property size, mix and purpose.
“Many systems are exploring more flexible formats, smaller and more efficient footprints, and the adaptive reuse of existing buildings rather than pursuing capital-intensive ground-up projects,” Janus said.
“As financial pressure increases, the appetite for real estate strategies that reduce long-term commitments is only growing.”
Rising health expenditures, projected to outpace GDP growth by 1.2% per year over the next five years, are pushing providers to focus on operational efficiency and technology-enabled care models. For real estate, this means designing locations and layouts that support efficient workflows, smoother patient movement and reduced square footage.
Employee experience is also shaping real estate decisions. High workloads and burnout could drive more than half of healthcare workers to consider leaving their jobs within the next year. Facilities that enable streamlined workflows, flexible staffing zones and better day-to-day experiences are increasingly crucial for retention and recruitment.
Outpatient care is on the rise, with ambulatory procedure volumes expected to grow about 9% between 2023 and 2028, reflecting a shift toward care closer to patients’ homes. Providers are favoring smaller, service-specific sites that offer better access, lower operating costs and an improved patient experience.
“Traditional hospital campuses remain essential, but the center of gravity is shifting outward into community-based locations that support convenience and more predictable operating environments,” Janus said.
Digital access is another critical driver. Digital-native Gen Z patients increasingly rely on wearables, telehealth and online prescription tools, prompting providers to adopt care models that integrate virtual and in-person services. Clinics that enable team-based workflows, flexible layouts and seamless movement between digital and physical touchpoints are better positioned to meet patient expectations and build long-term loyalty, according to the analysis.
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