These larger buildings are going up across the county, not confined to specific regions where strong population growth might be a major factor. “With all of the CEOs and CFOs that I've talked to about this across the country, it's neat to see it's not just a regional thing, it's a national response.” Quirk says.
Konkoli says it has taken some time, but during the past decade, physician integration has continued to improve with a increased focus on collaboration. The patient experience also improves through the convenience of having multiple specialties in the same building, which often provides more cost-effective settings. That's especially important with shrinking reimbursements, he says.
Even though buildings are trending larger, it's often the case that the work spaces are getting smaller as providers push for efficiency. Physicians from different practices share more waiting rooms, back-office space and nursing stations: “It just operates more efficiently. It's an open collaboration,” Konkoli says.
Building larger offices also represents a more efficient way of spending money, since the cost of managing real estate continues to rank as a major expense for hospitals. Based on data from Chicago-based real estate management firm Jones Lang LaSalle, real estate represents 40% to 50% of hospital systems' assets, making it the third-largest expense, behind payroll and supplies.
The combination of a decline in provider reimbursement and rising demand for capital makes strategic planning more important for hospitals and health systems, says Shawn Janus, the firm's managing director. Larger medical office buildings are typically more cost-effective versus construction of new full-service hospitals, he says.
One way construction costs differ between types of facilities is with HVAC systems, as hospital filtration requirements are more stringent compared with office buildings, Janus says. Medical office buildings don't have to adhere to those higher standards, which means lowered costs, he says.
Hospitals and health systems are also employing the new “one-stop shopping” medical office venues to cater to patients' on-demand lifestyles.
“As a consumer, I would much rather be able to see my doctor, have my ambulatory surgery and have my rehab—everything—at one facility very close to where I live,” Janus says.
Those interviewed for this story struggled to come up with negatives to the larger medical office space. Konkoli believes that eventually building size could be capped once they approach the size of larger hospitals. Some medical office buildings are already eclipsing the size of smaller hospitals.
“You could say that with being big you lose efficiency, and you look much like a hospital again,” Konkoli says. “Typically, you're not going to have any bed component. I just think it's a matter of what's being delivered and the number of physicians and what can be efficient in the space.”
The availability of capital also dictates fewer hospitals and more office buildings, Janus says, pointing to an increase in the number of mergers and acquisitions. Smaller hospitals are seeking the stability and increased capital of larger systems.
Declining reimbursements mean physicians are also affected by the availability of capital. It's more difficult to find financing to build their own office facilities versus working in a larger spaces owned and operated by hospitals and health systems, Skanska's Quirk says.
Building in flexibility has always been key to designing offices, and the larger buildings offer even more adaptability, Quirk says. Compared with building a hospital, larger outpatient office space is a cheaper alternative that's more inviting for patients, he adds.
And they might offer amenities not found at your typical community hospital. Quirk says more office buildings will include health clubs or spas, citing one example of a retail component that's also becoming more familiar in medical offices to keep the customers happy.
While it's easy to see the trend toward larger buildings, the focus shouldn't just be on size, Derman says. The fate of the patient experience lies with how building designers use the space to help clinicians deliver a higher quality of care and services. “The size of the building, the size of the hospital does not dictate the experience,” he says.