1
1
By Cynthia Corzo
The healthcare delivery landscape continues to transform amidst the rapid shift from traditional in-hospital acute care to the specialized services offered by ambulatory health centers, which handle outpatient services that don't require an overnight stay.
These can range from ambulatory surgical centers (ASCs) to freestanding urgent cares and even standalone emergency rooms. Drivers of this shift include advances in medical technology, changes in patient preferences, cost considerations and policy reforms.
Advancements in technology and the drive to optimize healthcare costs are expected to attract healthcare organizations, community health centers and policymakers to ambulatory care centers.
New market reports indicate the U.S. ASC market was worth $81.5 billion in 2022 and is projected to be valued at $141.2 billion by 2032. The fast-growing sector of healthcare is attracting considerable interest from private equity (PE) funds across the country.
Currently, these centers handle minor surgeries, with some also managing complex procedures. As ASCs expand to include more complex surgeries, they will unlock new growth opportunities in outpatient healthcare over the coming decade, making investment in MedTech a wise choice as well.
ASCs are specialized facilities that provide same-day surgical care, including diagnostic and preventive procedures, while traditional hospitals offer a wider range of services and cater to patients needing extended stays.
"If you can get a patient out the door relatively quickly, you reduce the risk of infection because when patients have to stay in a hospital overnight or for long periods of time, the risk of infection increases," said Miriam Weismann, academic director of the Healthcare MBA program at FIU Business.
"Also, ambulatory surgical centers have lower cost margins than hospitals, there is high quality of care and it is very patient-centric."
Several factors are driving the proliferation of ASCs. Advances in medical technology, such as minimally invasive surgical techniques, have made it possible to perform complex procedures with shorter recovery times, eliminating a need for an overnight stay. Another is the growth of aging populations.
"The prediction is that the 80-plus population will grow by 50% in the next 10 years," said Paulo Gomes, assistant professor of information systems and business analytics at FIU Business. "The population pyramid shows a significant number of individuals will age into this demographic; so, this will drive demand for services, many of which can be provided in outpatient settings."
The Centers for Medicare and Medicaid Services has expanded the list of procedures that are reimbursed when performed in ASCs, providing a financial incentive for providers and patients to choose these centers over hospitals. Many private insurers have followed suit, aligning their reimbursement policies to favor outpatient surgical care.
The changes have enabled hospitals to adapt their payment models from feebased to value-based compensation to spread their payment risk, potential loss due to default, fraud or chargebacks for medical services.
Joint ventures, like establishing ASC facilities, can increase growth for all partners involved because of their profitability. They have lower cost margins than hospitals and lower costs for providers.
"A hospital will partner with a physician practice, a diagnostic clinic, a home health care service because those services are different than what the hospital is providing," said Weismann. "That's known as vertical integration, and this movement towards vertical integration is what defines, for the most part, the change from acute to ambulatory care if we're talking about a business model."
Ana Lopez-Blazquez (BBA '79) has had a front-row seat to the expansion at Baptist Health South Florida for the last 36 years. As executive vice president and chief strategy officer, she has overseen Baptist Health's growth in the outpatient sector.
"My team is really responsible for shepherding the growth of Baptist Health, where and what we want to be," said Lopez-Blazquez.
She noted the expansions of outpatient centers are happening quickly and strategically, sometimes opportunistically and other times defensively. One of Baptist's biggest successes has been the off-campus emergency departments where ambulances drop off patients.
"It is a true emergency room with that level of care where they can intervene immediately, they can stop a stroke, they can stabilize a cardiac incident," said Lopez-Blazquez. "They're run super efficiently, with a patient and customer focus. See, that's the biggest difference."
She's also the CEO of the for-profit entity of Baptist Health South Florida that includes physician joint ventures, real estate and development.
Her team is tasked with managing and mapping out the future for 3 million square feet of non-hospital campus operations; these include ambulatory locations such as physician offices, administrative offices and outpatient sites. And real estate plays a big role.
"You can either acquire some of these sites, and then our decision at that point is do we want to reinvest in the facility, do we need to replace equipment? Do we have to refresh the space?" said Lopez-Blazquez. "If it's brand new, then my real estate team goes out and searches for space. Sometimes we rent, sometimes we buy, sometimes it's in a strip mall shopping center, sometimes we will build."
With the shift to ambulatory care gaining momentum, could the boom translate to more jobs? Not exactly, said Dr. Irving Jorge (MBA '15), surgeon and chair of acute care surgery division of the Mayo Clinic Hospital in Phoenix.
"Not necessarily more jobs but redistribution of services," said Jorge. "It might actually decrease the number of hospital-based jobs if a significant proportion of procedures that were typically performed in the inpatient setting transition to outpatient."
Hospitals and acute care settings can expect to see more clinically appropriate patients being served in ambulatory settings, leading to a decrease in inpatient volume. Consequently, hospitals and health systems that do not strategically shift cases to off-site settings risk being left behind.
The expansion of ambulatory centers does open opportunities for entrepreneurs to seize on the growth by providing services from information technology and cybersecurity to patient data platforms and more.
Gomes noted that one leading growth area is specialty clinics that adopt an operational excellence model, focusing on a particular procedure, such as cataract surgery or knee replacement, and performing it with high reliability and low cost.
Future advancements in telemedicine, robotic surgery and remote monitoring could enhance the capabilities of ASCs, enabling them to handle an even wider array of procedures. Adapting to this new landscape will require some strategic investments in technology, staff training, real estate and other areas.
