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NOW ENTERING THE OUTPATIENT ZONE; Hospitals invest in 'big box' centers for outpatient services to help reap rising revenue in that sector and expand their reach.

Article Excerpt
Byline: Michael Romano

In an upscale suburban area southwest of Denver, Exempla Lutheran Medical Center is building a beachhead for the future, planting its flag atop a 125,000-square-foot outpatient facility that will include scores of doctors' offices and a wide range of services that not too long ago were available only in the main hospital. Exempla's facility-call it an outpatient outpost-is about 15 miles from the hospital's main campus and situated in a fast-growing residential area near the western perimeter of Denver's metro area.

An even more ambitious expansion of ambulatory services is about to begin at Virtua Health, Marlton, N.J., which is in the midst of plans for three outpatient projects-a 400,000-square-foot ambulatory facility adjacent to a replacement hospital for 261-bed Virtua West Jersey Hospital Voorhees (N.J.) and two other large projects that are each more than 10 miles or so from one of the system's four existing inpatient sites.

Some experts describe these facilities as "outpatient zones,'' often likening them to the concept spawned by retailers that crams every imaginable service and product under one roof as a way to cut costs, increase revenue and boost convenience for consumers.

"These are `big box' ambulatory centers,'' says Todd Lillibridge, chairman and chief executive officer of Chicago-based Lillibridge, a major real estate services firm that develops medical office buildings and ambulatory surgery centers for many not-for-profit hospitals, including Exempla. "Outpatient services are where the action is,'' he says.

These days, hospital systems such as Denver-based Exempla Healthcare, Virtua and scores of others are branching out like never before, expanding outpatient offerings as they shift their attention to a select number of profitable services that can be delivered in a setting convenient and accessible to both physicians and patients, including diagnostic imaging, surgery, cancer treatment and cardiology care. It represents a significant shift in the way hospitals operate and provides a clear forecast of how they will function in the future, according to...