Most services once provided by hospitals are now provided through outpatient clinics and digital channels.
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Without a doubt, the healthcare industry's biggest annual event was JP Morgan's Healthcare Conference, which last month brought healthcare executives to San Francisco for the 43rd time. In a summary of 10 takeaways from JPM 2025, modern healthcare listed the growth of outpatient care as #1. This is how they put it…
1. Outpatient care remains the main growth strategy of the health system
Outpatient care is hot tickets for most health systems.
Terry Shaw, president and CEO of AdventHealth, said Florida's Altamonte Springs is strengthening its outpatient strategy and plans to put $500 million in primary care over the next five years. North Carolina-based Novant Health AdventHealth and Winston-Salem will both use outpatient growth to help them achieve their $30 billion revenue target.
Sutter Health's growth plan for California's Sattal type Sutter Health will also focus on outpatient care, said President and CEO Warner Thomas. Health System appears to open about 20 outpatient sites over the next three years, including a $800 million outpatient hub in Santa Clara, California.
Chicago-based Commonspirit Health is another system that pushes you beyond hospital barriers. CEO Wright Lassiter said if Commonspirit focuses solely on hospitals, it would not be a financially sustainable business.
Ardent Health, based in Brentwood, Tennessee, added nine emergency care centers in 2024 and announced the acquisition of 18 New Mexico and Oklahoma centers in January.
I have had the opportunity to observe trends in outpatient/outpatient care over the course of my career, and have helped me accelerate that growth over the past 20 years through leadership.
During this period (according to Wolf Media), US hospital inpatient admissions fell by 14% per person, while outpatient visits increased by 26%. And outpatient encounters are projected to grow to 3.2 billion by 2030, three times the expected growth of the population. Looking back at this, I wondered whether hospitals are an outdated process.
Northwell CEO's view
My thoughts on the decline in hospitals' role in the care continuum are recent by Michael Dowling, CEO of Northwell Health, the largest health system in New York City's metropolitan area and one of the largest in the country. The comments were even more inspiring.
In a recent webinar and comments on the Northwell website, Dowling characterized the hospital as an important “link” in the care continuum that includes (my list): primary care practices for outpatients; Emergency care centers, retail-based clinics, free and ERS, outpatient surgery centers, dialysis centers, imaging centers, wellness centers, skilled nursing facilities, rehabilitation centers, nursing facilities, nursing homes, hospice care, hospice care, hospice care, these Not to mention the integration of telehealth in all environments. Standalone basics.
Dowling also observed that 30 hospitals in New York City were more common than they do today, predicting that future hospitals would consist primarily of intensive care units (capacity) and maternity wards.
He doesn't believe that hospitals will disappear or inevitably continue to shrink. Because our aging and increasingly (chronically) worsening population needs them, and an increasing number of outpatient sites serve as their downstream feeders. However, the role of hospitals has changed, and is more pronounced than in the days of hospital-centric hospitals.
Historical perspective
In the 19th century, hospitals were often considered last resorts, serving mostly poor people and those without support from their families. The hospital's reputation was greatly improved in the early 20th century due to several factors.
The introduction of anesthesia and sterilization techniques has led to surgery being safer and less traumatic. The discovery of X-rays in 1895 enhanced diagnostic capabilities. A better understanding of germ theory has reduced spreading of infectious diseases.
These advances increased public support for hospitals and by the mid-20th century it became the heart of the health care system. However, this trend has reversed over the past few decades.
Current trends
Several trends indicate a transition from traditional hospital-based care.
Decline in hospitalizations: The peak year for hospitalizations in the United States was 1981, with over 39 million people admitted. By 2016, hospitalizations had fallen by more than 10% despite a 40% increase in population. Decline in the number of hospitals: The number of hospitals in the US has decreased from 6,933 in 1981 to 6,120 today. Transition to outpatient care: Many procedures and treatments that once required hospitalization are now routinely performed on an outpatient basis. The rise of specialized facilities: Grows in specialized care centers focusing on specific conditions and procedures, often providing more efficient and cost-effective care than a typical hospital.
Factors that promote reduction
Several factors contribute to the potential obsolescence of traditional hospitals.
Innovation: Advances in medical technology have made it possible to carry out complex procedures in outpatient settings. For example, minimally invasive surgery reduces recovery time and can be performed without overnight stay. Telemedicine: The rise of telemedicine has enabled remote consultation and monitoring, reducing the need for in-person hospital visits in many conditions. Home Health Services: Home Health Technology and Services are improved, allowing patients to receive care in the comfort of their home at a lower cost than hospital-based care in many cases. Preventive Care: The focus on preventive care and early intervention reduces the need for hospitalization. Cost considerations: As health care costs continue to rise, there is pressure to find a more cost-effective care delivery model. Hospitals with high fictional costs are often considered economically less efficient than other care settings. Quality and Safety Concerns: Hospitals face surveillance for issues such as infections and medical errors in hospitals. In 2002, 1.7 million cases of hospital infectious diseases were estimated to have caused about 100,000 deaths. Hospital performance has improved since then, but quality and safety issues remain.
Issues for urban and rural hospitals
Urban hospitals face unique challenges that contribute to potential obsolescence.
Suburbanization: With the middle-class population and healthcare provider migration to the suburbs, many urban hospitals are struggling to maintain patient bases and staff. Aging Infrastructure: Many urban hospitals have aging facilities that are expensive to maintain and upgrade, making it difficult to compete with new suburban facilities. Change in demographics: Changes in urban populations often serve primarily low-income communities with high portions of uninsured patients and patients eligible for Medicare and Medicaid plans. This generally does not refund enough hospitals to cover the costs. Competition: General hospitals in cities face increasing competition with suburban facilities and professional care centers. These can provide target services that cost more modern amenities and costly, producing comparable or better results.
Meanwhile, rural hospitals are also under financial pressure. Such facilities have been closed in the past decade, and more than 30% of all rural hospitals are at risk of closure, according to a recent report by the Healthcare Quality and Payment Reform Centre.
Regional hospitals have unique challenges.
Lower patient volume: Hospitals in areas with low population density tend to attract patients and therefore generate lower incomes than hospitals in metropolitan areas. This makes it even more difficult for local hospitals to cover the generally high fixed costs of hospitals. More patients with low-income patients: Rural hospitals tend to have more of a few low-income patients who are not covered by insurance or are eligible for public planning. The reimbursements provided by these Medicare and Medicaid plans are lower than the cost of rural hospitals to provide care. Insufficient Private Insurance Refunds: Due to the inefficiencies associated with the lower patient volume above, rebates from private health insurance plans may result in losses from patients with uninsured and patients covered by public plans by rural hospitals. It is not enough to offset. Investment Limitations: Low rebates on public and private programs have led rural hospitals to invest in remote monitoring and other technologies that have been shown to cost-effectively improve population health in large catchments It will become difficult to do. Staff shortage: Rural hospitals face difficulties in attracting and maintaining clinicians and other healthcare workers, increasing labor costs and services (e.g., half of rural hospitals (less than that still provides labor and delivery care).
Future hospitals
Hospitals may face challenges, but they are unlikely to disappear completely. Instead, healthcare systems continue to evolve into more diverse and distributed models.
Specialized Centre: Hospitals evolve into highly specialized centers focused on complex procedures and critical care, and shifting basic care into everyday surgeries and other outpatient environments . Virtual Hospitals: Some healthcare systems are experimenting with “virtual hospitals” models. In this model, patients receive hospital-level care at home through a combination of telehealth and visiting healthcare providers. Community Health Hub: Hospitals may be transformed into community health centers that coordinate care across a variety of settings, including outpatient clinics, home health services, and specialized facilities.
Impact on healthcare delivery
Reducing the role of traditional hospitals has implications for the US healthcare delivery system.
Infrastructure Investment: Healthcare executives and policymakers should consider ways to allocate resources between maintaining existing hospital infrastructure and investing in new models of care delivery. Regulatory Framework: Current health regulations often focus on hospital-based care. A new regulatory framework will be needed to ensure quality and safety in a diverse range of care settings. Workforce Training: The transition from hospital-centric care requires changes in the way healthcare professionals train and deploy them. Access to care: As care delivery models evolve, ensuring equitable access to health care services, especially in underserved communities, will be an important policy consideration.
All of this reminds me of my age in a 1985 song by an English band called “Walls Come Come Tumbling Down.” It's essentially what happened and it's happening in traditional hospitals. Because many of the services that were once offered only within the walls are delivered more convenient and efficient, so they provide services through smaller, physical and increasingly digital complex networks. . channel.
