The shift to outpatient facilities provides numerous benefits

August 12, 2016 Roger Herritz

When the Patient Protection and Affordable Care Act (“ACA”) was signed into law in 2010, the goals of the law were clear: provide more effective healthcare, to more people, at lower costs.

There are a wide variety of efforts underway to evolve healthcare toward these goals, including promoting better health and wellness as prevention, developing less-expensive medications, and streamlining processes and enhancing technology.

When appropriate, shifting healthcare services into outpatient facilities is another effective way to lower the cost of healthcare. These outpatient facilities provide numerous benefits.

Facility costs: With a new inpatient facility costing 1.5-2x as much as new outpatient facility, the advantage on 1st cost is obvious. The lower cost outpatient facility translates to a lower facility fee for certain procedures. Patients still get the quality service they’re looking for – at a lower cost - and they’re able to recuperate in the comfort of their own homes, which can lead to a quicker recovery at a lower cost.

Design evolutions: Recent designs are addressing transitions in outpatient services. These include designs to accommodate new staffing and operational models, such as the Medical Home Model. Additionally, larger outpatient facilities can include an array of diagnostic and treatment technologies, becoming a comprehensive Ambulatory Care Center, a legitimate single destination for everything except emergency or inpatient needs.

Another design focus is on improving the Patient Experience – liberally expanded here to “User Experience” to include more stakeholders. This effort is intended to accomplish several objectives. Healthcare has become more consumer-oriented, and choosing the best overall experience is part of the consumer purchasing criteria. Additionally, Medicare payments are now being based (in part) on patient satisfaction scores. An improved user experience is also intended to improve employee recruitment/retention, which will be critical to serve the millions of additionally insured patients through ACA.

Estimates have overall healthcare construction annual growth around 5.8% - with outpatient services forecasted to grow by 30% over the next 10 years. The trend to lower-acuity facilities will continue, including development of:

  • Outpatient clinics: urgent care centers and retail clinics
  • Post-acute care facilities: LTACs and rehabilitation hospitals
  • Senior Housing: Skilled Nursing, Memory Care and Assisted Living
  • Behavioral Health clinics and hospitals
  • Adaptive reuse: to extend the life of their facilities, via renovation or enhancement

That said, inpatient projects aren’t going away… It’s important to note, however, just because outpatient facilities are on the rise, doesn’t mean inpatient construction will disappear. Inpatient projects will continue, including hospitals for Women and Children, Behavior Health, as well as replacement hospitals, (e.g. seismic obsolescence). Renovation projects will also continue for regulatory compliance, enhancement for User Experience, or repurposing of the space.

Whether planning an outpatient facility, a hospital, or renovation project - the right project manager, proper planning, and experience can empower you accomplish better healthcare, improved user experience, at a lower cost. Contact Roger Herritz to discuss further. 

About the Author

Roger Herritz

Senior Vice President, National Healthcare Practice Lead. Roger is accountable for developing and executing client pursuit strategies that support the overall strategic plan, networking with potential and existing clients, and driving growth through direct client sales. Roger has 30 years of A/E/C experience, with the last 17 years focused on healthcare real estate. Most recently, he was National Director – Healthcare Business Planning for AEI, in which he was responsible for leading their healthcare business planning while developing relationships with clients and strategic partners.

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