Make way for “outpatient zones,” a term some healthcare experts use to describe the large, suburban outpatient health care centers that are popping up across the United States at an alarming rate! Outpatient zones are much like the retail concept of cramming every imaginable service and product into one store as a way to cut costs, increase revenue, and boost convenience for consumers. Just as we Americans are more likely to go to a mall around Christmas to fulfill all our shopping needs in one location as opposed to 10 specialty stores spread out around town, patients increasingly prefer to go to one facility to have all their outpatient healthcare needs serviced – compared to traveling to the offices of different specialists.

Savvy hospitals and health systems are moving swiftly to create their own outpatient zones. Exempla Lutheran Medical Center in Denver is building a 125,000-square-foot outpatient facility that will include scores of doctors’ offices and a wide range of services that were previously only available in the main hospital. Exempla’s facility is located about 15 miles from the hospital’s main campus and situated in a fast-growing residential area on the outskirts of Denver’s metro area. Facilities such as Exempla’s focus on outpatient services because they are more profitable and the facilities (outpatient zones) are established in suburban locations that are easily accessible for both physicians and patients. Not surprisingly, outpatient zones are often built in suburban residential neighborhoods with healthy demographics—high median incomes and a smaller proportion of Medicare and Medicaid patients. Many outpatient facilities have the added positive for hospital systems that, with some forward planning, they can later be expanded into sites for inpatient facilities.

“We see the inpatient side of our business not necessarily declining, but plateauing,” says Exempla Lutheran’s CEO, Robert Malte in an August 2006 Modern Healthcare article. 1n 1981, outpatient services accounted for only about 20% of all outpatient procedures for hospitals, physician offices, and ambulatory surgery centers. In 2003, however, that number had grown to almost 80% according to the Advisory Board Company, which predicts continued growth in the outpatient segment for the next decade.

Not only do outpatient zones allow hospital systems to focus on high-margin services, but they also cement good relationships and long-term partnerships with physicians who otherwise might venture off to start their own practices. These outpatient zones are operationally efficient and provide a more satisfying patient experience. Doctors find the centers more conveniently located to residential areas, where their own families likely reside, than traditional inpatient facilities.

Dark Daily notes that the likely result of the rapid growth of outpatient zones will result in a fundamental change in the locale of many hospital laboratories. Outpatient zones are likely to generate substantial volumes of testing as patient visits increase. When outpatient zones first open, they will send lab work back to the main hospital. Ultimately, however, the larger outpatient zones are likely to fuel a demand for on-site laboratory testing services. Pathology group practices should keep an eye on the growth of outpatient zones in their community. Such facilities are likely to be a lucrative source of case referrals.