Health systems invest in outpatient care, repurpose hospitals for mental health and rehab

Editor's Note

Health systems across the US are reimagining their infrastructure by heavily investing in outpatient care and repurposing hospital spaces to meet growing demands for mental health and rehabilitation services, Modern Healthcare December 2 reports. This shift reflects a broader trend toward community-based care and aligns with advancements in medical technology that reduce the need for prolonged hospital stays.

Hackensack Meridian Health, for example, has committed $500 million to outpatient projects, including a $200 million mixed-use development and collaborations with One Medical and K Health to expand primary care access. Similarly, HCA Healthcare plans to allocate a quarter of its projected $5 billion 2024 capital spending to outpatient facilities, including freestanding emergency rooms, urgent care centers, and ambulatory surgery centers. Tenet Healthcare has already spent $500 million this year on 45 new outpatient facilities, and Jefferson Health opened a $762 million multi-specialty outpatient center in Philadelphia equipped with cutting-edge technology and comprehensive services.

Meanwhile, the other side of the coin is repurposing low-volume acute care hospitals to help meet the rising demand for mental health and rehabilitation. Franciscan Health announced plans to convert its Dyer, Indiana, hospital into a behavioral health campus by 2027. Similarly, Jefferson transitioned its Elkins Park, Pennsylvania, hospital into a specialty rehabilitation center, allowing the neighboring Jefferson Abington Hospital to focus on acute care. These transformations reportedly have not only optimized operations but also improved financial performance.

The growing focus on outpatient care is driven by patients spending less time in hospitals due to advancements in technology and changing regulations that enable more procedures to be performed in outpatient settings, the article noted. Data from Kaufman Hall shows a 4% decline in hospital stays compared to 2021, reflecting this trend. Patients increasingly prefer the efficiency of outpatient services, a sentiment echoed by healthcare attorney Heather Delgado, who noted the shift toward "in and out" care.

Despite this push, experts caution inpatient care will remain essential, especially in urban areas where aging populations and chronic diseases continue to strain hospital capacity. While health systems are consolidating and reconfiguring lower-volume inpatient spaces, acute care hospitals are expected to remain relatively full. The ongoing challenge will be balancing the need for community-based outpatient services with maintaining sufficient inpatient capacity to meet population needs.