Number of outpatient facilities surges as industry values more convenient, affordable care

December 21, 2018 Health Care

The number of outpatient centers increased 51% from 2005 to 2016, a trend that shows no sign of slowing.

The number of outpatient facilities jumped from 26,900 to 40,600 between 2005 and 2016, according to a new report from commercial real estate firm CBRE. Rents have followed. They reached a record high in the second quarter of this year, rising 1.4% year over year to $22.90 per square foot, driven by areas with low vacancy rates like Louisville, Ky., Seattle, Nashville, Manhattan and Indianapolis.

It mainly comes down to two things: making services more convenient and more affordable, said Christopher Bodnar, vice chairman of CBRE Healthcare Capital Markets.

“That strategy moves along the entire continuum of care for providers. It’s front and center for their real estate strategy as well,” Bodnar said, although there will always be demand for acute beds, he added. “We are seeing health systems look to decompress their main campus and look to move more services to an outpatient setting.”

The report represents healthcare’s transition from vast acute-care footprints to more convenient outpatient space. Some health systems have moved their clinics and ambulatory facilities off their main campus to make way for more beds and specialty care. But a significant number of providers have already pared down their acute operations to build outpatient networks closer to where people live and shop, responding to consumers who demand more accessible, affordable care as they shoulder more out-of-pocket costs.

Health systems are looking to keep pace with mergers like CVS Health and Aetna and Optum’s continued push into the market, both of which draw patients away from the hospital into a retail setting. Many major health systems continue to watch their inpatient admissions dwindle and their outpatient visits grow.

Reimbursement pressure is also pushing providers to lower-cost settings that could offer higher margins, said Mark Lamp, executive managing director of healthcare at CBRE.

By Alex Kacik | Modern Healthcare

Image Credit: Getty Images

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About Peter Coffaro 605 Articles

A growth-driven and strategic executive, Peter Coffaro commands more than 20 years of progressive management success within the medical device industry. As a District Sales Manager for Stryker Orthopaedics, Peter was responsible for managing and directing a regional sales force to achieve sales and profit goals within the Rocky Mountain region. Previously, he was the Director of Sales & Marketing for Amp Orthopedics. In this role, Peter was responsible for planning, developing, and leading all sales and marketing initiatives. Peter is a former orthopedic distributor in the Pacific Northwest. He has also worked with DePuy Orthopaedics as well as Zimmer, and held positions in sales, sales training, and sales management. Peter has an extensive background in organizational development, business development, sales management, negotiating and P&L management. Peter holds a B.S. degree in Biology from Northern Illinois University.