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Outpatient Services Drive Revenues and Real Estate
When it comes to healthcare real estate, discussions tend to revolve around hospital facilities and medical office buildings. But it’s the clinics and ambulatory centers that offer outpatient services that is experiencing a large amount of growth. This trend is driving both healthcare revenues and real estate, according to JLL.
A recent JLL press release explained that outpatient services are defined as those that don’t require hospital admittance. This can range from imaging and bloodwork to minor surgeries and procedures. Up to one-third of hospital revenue is shifting to ambulatory surgery centers, office-based labs and other ambulatory sites. Additionally, inpatient discharges are declining because of competition, regulatory changes and technological innovations.
“More sophisticated procedures can be done in outpatient settings than possible a decade ago,” added Amber Schiada, Head of Americas Work Dynamics and Industry Research, JLL. “Innovation in care combined with reimbursement pressures are driving a sustained shift to outpatient facilities, and consumer preferences for outpatient care have increased as well, as outpatient facilities are often more accessible or conveniently located.” She added that outpatient locations can offer better medical outcomes and a higher rate of patient satisfaction.
From a real estate perspective, outpatient facilities tend to be less expensive to develop and operate, according to JLL’s 2022 Healthcare and Medical Office Perspective. In fact, the report noted that outpatient sites have been dominating healthcare services delivery versus hospital admissions. The numbers also explain that year-over-year outpatient revenue increased by 8% in 2022, while impatient revenue remained flat.
“Hospital outpatient, ambulatory surgery, laboratory services, physical therapy, emergency medicine and oncology centers will all benefit from outpatient growth, as do patients who seek more convenient and accessible care,” said Alison Flynn Gaffney, President, Healthcare Division, JLL. “Reimbursement policies will continue to support this shift, and specialized care options will further drive competition within the industry.”
JLL Research anticipates outpatient volume to increase across all markets, especially the Sun Belt states. JLL identified Austin, Phoenix, Raleigh, Las Vegas and Jacksonville as the top five growth markets based on anticipated outpatient volume between 2020 and 2025 and outpatient growth. This is consistent with the trend of the U.S. aging population migrating to Sun Belt markets.
“The aging population, along with the pandemic, have accelerated the migration from acute care facilities to more local outpatient clinics,” said Dan Squiers, Senior Vice President and National Healthcare Lead, JLL Project & Development Services.
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