Healthcare Systems Shifting Capital Away from Hospitals to Ambulatory Care, Telemedicine

Tenet Healthcare Corp. is reducing capital spending for hospitals by $150 million in its 2017 budget in order to add urgent care centers in key markets, and to open freestanding emergency departments and microhospitals over the next 18–24 months. The idea is to shore up the facilities’ ability to meet growing volume in those settings. Kaiser Permanente is also building up its spending on emerging practice trends; in recognition of the fact that more than half of their 100 million patient encounters are now virtual, the company now spends a quarter of its $3.8 billion capital budget on information technology. And Northwell Health plans to spend about $200 million on ambulatory facilities in 2017—almost double the amount it spent in 2015, and about a quarter of its $800 million–$900 million annual capital expenditures. The trio of healthcare giants are part of industry movement toward offering more access points in the community; it doesn’t hurt that urgent care and other ambulatory settings can provide quality care for patients at a much lower cost than a hospital, on average, for the same acuity level.