Ambulatory Growth, Reshaping Healthcare

Health systems across the country are aggressively expanding ambulatory access adding surgery centers, clinics, and distributed care networks to meet consumer demand and protect market share.

But in doing so, many are unintentionally creating a new problem: a growing layer of stranded capital embedded in their acute-care footprint.

This is not a cyclical issue tied to reimbursement pressure or post-pandemic recovery. It is structural. And for many organizations, it is already reshaping their long-term financial trajectory.

The shift is real and accelerating.

Over the past three decades, outpatient care has steadily captured a larger share of healthcare delivery. Today, more than half of hospital revenue is generated outside the traditional inpatient setting.

More importantly, the pace of change is accelerating. Since 2021, outpatient revenue growth has outpaced inpatient growth by more than 2.5 times, with cumulative growth of approximately 31% compared to just 12% for inpatient services.

This divergence is expected to continue. Demographic trends, consumer preferences, payer incentives, and clinical innovation are all pushing care into lower-cost, more convenient settings.

Yet while care delivery is rapidly shifting, the capital footprint of many health systems is not.

The Core Problem: Cost Structure Lag

Most organizations are not redesigning their enterprise to reflect this new reality. Instead, they are layering ambulatory growth onto an unchanged acute-care cost structure.

The result is a fundamental misalignment between where care is delivered and where cost resides.

When volume migrates out of the hospital:

• High-acuity cases remain
• Fixed infrastructure remains
• Staffing models lag behind
• Cost per case increases
• Margin compresses

This is not a story about empty beds. It is a story about under-absorbed fixed cost.

Health systems are successfully solving access and growth challenges while unintentionally creating long-term structural inefficiencies within their core platform.

Designing for the Wrong Future

Compounding this challenge is the way we continue to see organizations design and build acute-care facilities.

Recent hospital projects average approximately 2,800+ square feet per bed, reflecting decades of layered requirements, redundancy, and operational complexity.

Much of this space is not directly tied to patient care:

From Facility Planning to Enterprise Design

Addressing this challenge requires a fundamental shift in how health systems approach capital planning.

This is no longer about optimizing individual projects or improving departmental efficiency. It is about redesigning the enterprise.

Four principles are emerging as critical:

1. Stop Expanding Both Platforms Simultaneously

Growth must replace cost—not layer onto it. Expanding ambulatory capacity without recalibrating the acute footprint compounds structural inefficiency.

2. Tie Ambulatory Strategy to Acute Recalibration

Every outpatient investment should trigger an inpatient question:

• What volume is migrating?
• What space becomes redundant?
• What cost can be removed or repurposed?

3. Move Beyond Facility Planning

Facilities are not just physical assets—they define workforce models, cost structures, and capital velocity. Planning must integrate strategy, operations, and finance.

4. Sequence Capital Intentionally

A phased approach can help organizations reposition without destabilizing performance:

• Phase 0: Stabilize revenue and generate near-term margin
• Phase 1: Migrate appropriate services and realign operations
• Phase 2: Reconfigure the acute-care chassis to reflect future demand

This is not about abandoning the hospital. It is about right-sizing its role within a broader, more dynamic care delivery model.