Ambulatory Care is One of the Fastest Growing Segments in Healthcare

Using ambulatory surgical centers (ASCs) as an example, we find: They are often more conveniently located than hospitals. ASCs allow patients to be discharged within 23 hours of care, reducing their risk of infection and allowing recovery to take place in the comfort of their homes. The ASC is often more intimate than a hospital, giving patients a greater sense of personalized care and contact with their care team. And most persuasively, costs to both patients and payers can be significantly less at ASCs, as their entire operating systems are often configured at a lower cost base across staffing, space, and supplies. Researchers predict the U.S. ASC market is experiencing a compound annual growth rate of 6 percent from 2018 till today—reaching around $36 billion by year’s end.

Currently, there are approximately 9,300 Urgent Care Centers across the U.S. These have an average cost per visit of about $125 to $150 without health insurance, as compares to $2,032 for a visit to the ER. In fact, unnecessary ER visits cost Americans $32 billion per year.

Though hospital care is still the largest segment of the healthcare market overall, a disproportionate share of growth in the coming years will be in ambulatory settings. This includes both free-standing sites as well as hospital outpatient departments, plus non-hospital-provider segments—everything from diagnostics to pre-, non-, and post-acute services and physician offices. ?

Here are two major factors impacting this change:

1. Innovation and technology:?Advances in clinical approaches and technology, including?new developments in anesthesia and pain control, as well as minimally invasive surgical procedures,?have enabled numerous procedures (for example, knee replacements, tonsillectomies) to migrate into the ambulatory setting.
2. Consumer demand: Consumers, who increasingly care about lower costs, improved access, and better experience, are choosing out-of-hospital medical care.?Citing one example, when patients elect to have a knee or hip replacement performed in an outpatient facility, costs can be 30 to 40 percent lower. On average, the price of an inpatient knee or hip replacement was $30,000, compared with $19,000 and $22,000 respectively in the outpatient setting. These consumer preferences have been reinforced by COVID-19, as consumers report they are significantly less comfortable returning to hospitals or emergency rooms in light of the pandemic.

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Sources: McKinsey and Company: “Walking Out of the Hospital,” September 18, 2020; JLL “Outpatient Healthcare Services and Facilities Set for Enormous Growth,” February 8, 2023.?