The Shift Towards Outpatient Care Facilities

Lower costs, increased patient convenience and more are driving a shift towards outpatient care settings.

By Jeff Wardon, Jr., Assistant Editor


Healthcare is a dynamic industry, as it changes daily with many new advancements and trends. One trend is a shift from traditional medical office buildings (MOBs) to outpatient care settings. To better understand what is driving this trend, Healthcare Facilities Today spoke with Jay Johnson, U.S. practice leader, healthcare markets at JLL, for a deeper dive into what forces are behind this push towards outpatient care. 


HFT: Why is there a trend towards outpatient care settings? 

Jay Johnson: Well, there has been a long-term trend that is continuing at the most fundamental level. That is, the population in the U.S. keeps growing and it keeps aging. So, both factors are increasing the need for healthcare services. There have been other trends affecting where those services are delivered because of the increase in technology and consumer preference for convenience and accessibility, and the need to reduce overall costs. These factors have contributed to the whole movement of care and those certain types of care away from hospitals into outpatient settings, which are lower cost to build and operate.  

In most cases, too, these have better health outcomes from the standpoint of delivery, so that is causing a shift in where care occurs at. There are things that we noted in our report that we didn't in years past, when we called it the “Medical Office Building Surveyor” or “Medical Office Building Report.” This year we turned it into the “Medical Outpatient Building,” to reflect the shift.  

However, this is not just a pure JLL observation, this is something that the industry is noticing and grappling with. Because of the changes in technology and the changes in the way the services are negotiated/set by CMS or with private insurance companies, there has been an increase in the clinical acuity of some of what is occurring in these outpatient settings. So, they are operating more like outpatient buildings rather than just being like the old-fashioned medical office building.  

 

HFT: What are some key factors leading to the shift of healthcare services to outpatient settings?   

Johnson: Outpatient settings, by and large, are cheaper to build and cheaper to operate than inpatient settings. You get cheaper land with surface parking versus structured garage type parking. It is all these things that make an outpatient facility cost less than an inpatient facility. That ultimately gets translated to the bottom line of the caregiver and to the patient whose insurance companies pay for the procedures.

Related: Outpatient Healthcare Facilities Set for Enormous Growth

Outpatient settings also tend to be more convenient for the patient. You can also think of the patient as the consumer. We do a separate survey called the Patient Consumer Survey that we have done now for three or four years running. It talks about how convenient it is to pay for the doctor or procedure that you need to convince the top factor after that in terms of companies that decide where to be treated.  

In addition, the infection rates and return rates there are lower. Which is ultimately better in the outpatient setting than in an inpatient – it is a lesser cost and you get a better outcome.  


HFT: How has telehealth and telework impacted this shift? 

Johnson: Health systems have general office occupancy as well and they think about their revenue cycle. Employees and their executives sit there, along with their management teams. Those regular offices within healthcare have been affected by the rise in telework. Most organizations are arguing to reduce their general office footprint by around 50 percent of what they had pre-COVID. So that can lead to cost savings for them.  

If they haven't considered doing that, they certainly should consider doing that. If you think of the rise of telehealth, which really got a boost during COVID, how does that compare to telework? It is not the same thing in terms of how teleworking affects the office environment, whereas telehealth affects the clinical environment.  

The impact on the clinical square footage for healthcare has been much less dramatic than it has been with telework on the office side. It is not as clear if it is going to have any effect on reducing the need for that clinical square footage at all. The demand for healthcare continues to rise with the growing population and the aging populations that may be there may be an offsetting effect. 

There are also new pathways opening to care. That is, people that maybe would not have gotten any care before they would have gotten less because they delayed seeking care are now availing themselves more. Then maybe that might increase the total amount that they receive because of telehealth. 

 

Jeff Wardon, Jr. is the assistant editor for the facilities market. 



May 31, 2024


Topic Area: Maintenance and Operations


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