Even before accounting for the mass influx of Americans rushing to hospitals’ emergency departments from healthcare reform, EDs are in serious need of fine tuning as over crowding and escalating inpatient costs are on the rise. According to the Centers for Disease Control and Prevention, emergency department visits increased 117 million from 2007 to 2008 and it shows no sign of slowing. Two types of facilities hospitals are adopting to ease over crowding and help deal with the heavy costs associated with over night stays are the free standing emergency department and ambulatory surgery center (ASC).
A free standing emergency department is very similar to an (ASC). They provide 24 hour care, perform surgeries and procedures on an outpatient basis and are typically located off campus. The American Hospital Association (AHA) reports that from 2004 to 2009, the number of free standing EDs has increased 65%. Likewise, the Medicare Payment Advisory Commission (MedPAC) saw Medicare-certified ASCs growing at an average annual rate of 7.3% over the course of 2000-2007. By providing patients with shorter wait times compared to hospitals’ EDs and access to a full suite of services, more health care systems are utilizing these facility concepts.
As hospital executives, when considering a free standing ED or ambulatory surgery center look at the costs compared to other types of outpatient facilities. In Cushman and Wakefield’s 2011 Medical Office Building Investor Survey, they indicate that due to higher heating, ventilation and cooling system capacity, requirements for sterilization and medical gas transport/storage, superior interior finishes and overall quality, ASCs base costs are significantly higher than a medical office building. However, the same report, as well MedPAC, convey a favorable ASC market presently and in the coming years.
As more convenient locations are offered and the aging population grows, I expect ambulatory surgery centers and free standing emergency departments will as well.
For related posts see The Impact of Healthcare Reform on the Emergency Room and 3 Healthcare Facility Trends
James Ellis, CEO, Health Care Realty Development Company, is a nationally recognized successful real estate investor and developer of medical office properties with a comprehensive knowledge of sophisticated real estate transactions, cost effective designs, and efficient property management.
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