The healthcare industry is undergoing a significant transformation. As the shift to outpatient settings accelerates and Certificate of Need (CON) laws evolve, health systems face growing pressure to optimize resources. Balancing the expansion of services and infrastructure with fiscal responsibility is essential. Health systems must carefully evaluate their real estate assets, ensuring they are aligned with current and future provider placement needs to maintain operational efficiency and remain competitive.
Asset optimization — leveraging existing spaces while strategically planning for future demands—is a crucial aspect of this process. Health systems that prioritize this approach benefit from:
Improved Efficiencies
Attracting top-tier providers, launching new facilities and forging lasting partnerships are essential for staying competitive, yet these initiatives come with significant capital demands. By optimizing existing assets, such as physician practices, ambulatory surgery centers, and hospitals, health systems can minimize underused spaces, allowing them to adapt to market changes and maintain a competitive edge.
Enhanced Financial Performance
Shrinking profit margins in recent years have intensified scrutiny of capital expenditures, especially in real estate. Many health systems struggle to determine whether their patient volumes and ambulatory spaces are properly balanced, in the right markets, staffed to meet demand, etc. Without a clear understanding of space utilization and resource alignment, systems risk inefficiencies that could hamper financial performance. By optimizing their real estate strategy, healthcare organizations can ensure that their facilities and resources are aligned with current and future needs, safeguarding operational efficiency and financial health.
Alignment of Real Estate Facilities and Provider Recruitment
As the demand for healthcare services rises, so too does the need for additional providers and healthcare professionals, but the costs of constructing new facilities to accommodate this growth have escalated. To mitigate costs, healthcare leaders must better utilize current and planned facilities. Aligning real estate assets with provider recruitment strategies and patient demand is becoming a key operational priority. This ensures that newly recruited providers are matched to available spaces in the most efficient way possible.
Meadows & Ohly employs sophisticated, proprietary analytical tools to enable clients to spot optimization opportunities by aligning the provider-patient time available to see patients in the clinic setting, known as ambulatory effort (aFTE), with present or future provider recruitment plans. Our aFTE analysis offers clients a clear understanding of how much ambulatory effort can be supported by existing locations and aids in the planning for future space.
“This was one of the best strategic techniques to address provider and practice constraints because we now know exactly how to match our specialists to locations, better optimize existing space, and most importantly expand our footprint to serve our communities. This project enabled leaders to level load our recruitment plans across our various markets, create expansion plans for our service lines, and validated future capital spend for new space" - Shyroll Morris, SVP Strategy & Growth, AdventHealth, East Florida Division
AdventHealth, one of the nation’s largest health systems, recently utilized our aFTE analysis to enhance its growth strategy in several markets across Florida, aligning provider recruitment, capital spending and current clinic capacities to set new organizational targets.
Below is a sample model of our work with a recent health system client operating a specialty practice. They were seeking to improve exam room utilization to meet its defined thresholds of 40%, 50%, and 60%. The analysis illustrates the impact of space utilization, including how many additional weekly visits are needed and the corresponding aFTE estimated to drive increased volumes and improve return on space.
The emerging science of space utilization in the healthcare outpatient setting is rapidly gaining traction across the industry. While benchmarks and targets vary by client needs, the value proposition is unequivocally clear: strategic asset optimization is essential for success. By maximizing the use of existing facilities and aligning them with provider recruitment strategies, health systems can reduce unnecessary spending, improve operational efficiency, and position themselves for long-term growth.
For more information on how Meadows & Ohly can help you optimize your healthcare real estate assets contact our team using the form below.
About Meadows & Ohly, LLC
Meadows & Ohly is a privately-held, comprehensive real estate services firm that has served the healthcare industry since 1972. The Meadows & Ohly team brings a powerful combination of strategic expertise and operational knowledge to every engagement, with an overarching focus on creating environments that support better healthcare.
