One of the main factors driving the increase in outpatient services is the changing demographics in the United States. The population aged 55 and older makes up around 30% of the total population but uses most healthcare services. Of particular concern is the group aged 80 and above, which is projected to grow by nearly 50% in the coming decade. This increase will raise the demand for outpatient care, as older adults often prefer receiving treatment in less invasive settings.
Among those aged 55 and older, outpatient demand is expected to rise by 16.9% by 2025, surpassing the general population growth rate by 4.3%. This trend reflects a significant change in healthcare consumption patterns that administrators need to take into account. According to Kimberly Steele from JLL, the aging population is influencing the demand for outpatient services, thereby supporting the stability of medical office assets.
Jay Johnson, U.S. Practice Leader for Healthcare Markets at JLL, emphasizes the need to cater to the needs of older citizens to improve healthcare delivery. He mentions that the elder population will significantly drive outpatient demand over the next 10 years, which is crucial for healthcare-related real estate.
Consumer preferences have changed over time, showing a clear desire for convenient and accessible healthcare. Patients increasingly favor outpatient options that negate the need for inpatient care. Factors like proximity to home and a less intimidating atmosphere are important when choosing outpatient facilities.
Alison Flynn Gaffney, President of JLL’s Healthcare Division, points out how the traditional notion of a medical office is changing. The term is evolving from “medical office” to “medical outpatient building” (MOB), reflecting a broader range of care options available outside hospital settings. Many procedures, such as those performed at surgery centers, labs, and physical therapy facilities, are now possible in newer outpatient centers or neighborhood health clinics.
Another key factor is the growing emphasis on patient-focused care. Patients value quality and convenience, opting for healthcare providers that can accommodate their schedules and locations. A recent survey showed that people prioritize healthcare facilities within a reasonable commuting distance, leading to increased demand for outpatient facilities in suburban and urban areas.
Technological advancements have significantly impacted the growth of outpatient services. Procedures once reserved for hospitals are now feasible in outpatient settings, thanks to improvements in medical technology. Less invasive surgical techniques and advanced diagnostic tools allow for a higher level of care in outpatient facilities than was available a decade ago.
Amber Schiada from JLL notes that more advanced procedures can now be performed in outpatient settings, illustrating the enhanced capability of medical technology and the changing approaches to care delivery. The linear path from diagnosis to treatment has expanded, providing patients with various options to receive necessary care closer to home.
The pandemic has also accelerated a shift from acute care facilities to local outpatient clinics. Patients have become accustomed to seeking care in more accessible community settings rather than traditional hospitals. This shift is evident, as outpatient revenue increased by 8% in 2022, while inpatient revenue remained unchanged.
The financial consequences of moving toward outpatient care are noteworthy. Economic trends indicate that healthcare spending could represent 30% of the U.S. GDP by 2030, up from 19.7% in 2020. Outpatient revenue is becoming increasingly important for healthcare organizations, with one-third of hospital revenue shifting to ambulatory surgery centers and other outpatient locations. This demonstrates a significant change in care models and reflects broader reform in the industry.
Regulatory changes and reimbursement policies have also influenced this shift. With more favorable reimbursement for outpatient services, healthcare providers are encouraged to expand their presence in outpatient facilities. The growing competition among healthcare providers is another factor driving the expansion of outpatient services, giving patients more options tailored to their needs.
The trend of outpatient growth is particularly evident in Sun Belt markets like Austin, Phoenix, and Nashville. These cities are seeing significant migration of older populations, leading to increased demand for healthcare services. For example, Austin is expected to have a notable growth in medical office space at 23.1%. As populations rise, healthcare systems must adjust delivery models to meet the growing need for outpatient care.
JLL reports a 1.9% increase in occupancy for off-campus medical outpatient buildings from 2019 to 2023, which surpasses the 1% increase noted in on-campus properties. This statistic highlights the increasing acceptance and preference for outpatient facilities as viable healthcare options.
In metropolitan areas such as Los Angeles and Washington, D.C., despite rising interest rates, properties continue to attract investment due to their resilience and the demand from an aging population. Investors are interested in medical outpatient buildings because they often result in higher occupancy rates, better financial metrics, and properties with long-term lease agreements.
As outpatient services grow and patient numbers increase, it becomes crucial for healthcare organizations to enhance operations. The integration of artificial intelligence (AI) and automated workflow systems can be very beneficial.
Healthcare facilities can use AI-driven tools to automate tasks like appointment scheduling, patient reminders, and initial assessments. This improves patient experience while allowing administrative staff to focus on more complex tasks that need personal attention.
By using comprehensive AI models, organizations can direct patient inquiries effectively, reducing wait times and improving access to needed services. Additionally, AI systems can analyze historical patient data to identify trends, enabling proactive outreach to patients who may need follow-up care.
Technology can help manage workflows more effectively, from patient intake to billing. Automation can minimize human error and ensure data accuracy while speeding up claim processing and appointment scheduling. This means that medical practice administrators can allocate fewer resources to routine tasks and concentrate more on strategies for patient care and business development.
Integrating AI analytics into patient management systems offers valuable information on service usage patterns. This allows practice managers to make data-informed decisions and optimize resource allocation. With these technologies, organizations can respond better to demand fluctuations, improve operational efficiency, and enhance patient outcomes.
An efficient front office, supported by AI and automation, can lead to better communication and responsiveness, which are key for patient satisfaction. When patients believe their needs will be quickly addressed, they are more likely to prefer outpatient services over traditional hospital care.
As patient preferences change, organizations must remain flexible, adapting to technological demands while maximizing their available resources.
The healthcare sector in the United States is moving toward outpatient services, driven by demographic changes, evolving consumer preferences, and technological advancements. Medical practice administrators, owners, and IT managers should embrace these changes to improve service delivery and enhance the patient experience. By making strategic investments and adopting innovative practices, organizations can position themselves for success in this evolving environment, ensuring access and satisfaction for a growing patient population.
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