Outpatient Sector Seeing Success In Mergers And Acquisitions

The outpatient healthcare sector is experiencing strong momentum in mergers and acquisitions, fueled by rising healthcare expenditures and changing population dynamics, according to a recent report by Colliers.

In 2023, healthcare spending in the U.S. grew by 7.5% to $4.9 trillion—or $14,570 per person—marking the highest growth rate since 2003 (excluding the 2020 pandemic spike). For the first time since 2020, healthcare spending outpaced GDP growth. Over the past decade, hospital and physician services—the two largest spending categories—have grown at an average annual rate of 5.3%.

Key Drivers Of Growth

This surge in spending has translated into greater profitability for health systems, many of which have strategically shifted focus by divesting non-core facilities to concentrate on higher-yield markets and services. The report also highlights the outsized influence of the Baby Boomer generation. By 2033, adults over 65 will comprise 21% of the population, up from 18.1% in 2024. Notably, those aged 75 to 84—who made up 31.5% of the 65+ group in 2024—are projected to account for 35.9% by 2033. As a result, the share of Americans over 75 will rise from 7.1% to 10.3%.

Given the high prevalence of chronic conditions among older adults, health systems are exploring strategies to meet growing needs. These include mergers and acquisitions, launching new outpatient facilities, and partnering with local providers.

Inpatient vs. Outpatient Outlook

While demand for complex inpatient care is expected to grow—particularly in specialties like neurology and cardiology—inpatient volume overall is projected to increase just 1% from 2023 to 2028 and 6% by 2033. Adults over 65 will drive much of this growth. However, health systems are increasingly shifting high-margin procedures such as joint replacements and spinal fusions to outpatient settings as technology allows.

Outpatient facilities are seen as key to expanding services and reaching new patient populations. Certain service lines are poised for especially strong growth in these settings, Colliers notes.

Broader Trends And Challenges

As outpatient care grows, the industry faces an ongoing workforce shortage affecting physicians, nurses, and administrative staff. This challenge will intensify as demand climbs due to an aging population.

Still, outpatient facilities offer unique advantages. They’re often more accessible, provide staffing flexibility across locations, and are more likely to retain patients who value convenience and positive care experiences.

Source: Healthcare Finance News