February 25, 2023

Ambulatory Surgery Center (ASC) construction is on the rise.

There are several reasons for this… and this healthcare trend introduces new MOB opportunities.

The pandemic led to huge numbers of medical procedures being delayed… resulting in a massive backlog of procedures that people need soon.

Meanwhile, it’s no secret that the US medical system has an issue with high costs. For anybody who has ever looked at the invoice for a medical procedure, the cost of booking an operating room can be stunning. It’s little surprise that the insurance companies paying those bills are incentivizing more efficient solutions.

Enter ASCs and dedicated procedure rooms within medical offices. These alternative spaces mean that the same procedure, done by the same doctor, can now be performed sooner and at a lower cost.

There is huge value in co-locating ASCs within clusters of medical practices. Access to low cost spaces for procedures allows each medical office to operate more efficiently. As medical practices thrive, they bring more money into a local medical ecosystem.

ASCs are taking market share from hospitals, but they also offer complimentary service. They can help ensure hospital operating rooms are available for more urgent or sensitive procedures.

This shift is well underway. Alliance already owns properties with procedure rooms inside. More of these facilities are being built and we see more and more procedures moving to these alternative settings.

The value is clear. Payers appreciate the much lower bills, patients like shorter wait times to book elective procedures, and doctors benefit from the greater convenience of doing their work close to (or inside) their offices. With doctors, patients, and insurance companies increasingly aligned, this shift is only accelerating.

At Alliance, we’re closely tracking this new trend. It informs our assessment of supply and demand for medical spaces. Medical facilities close to an ASC (or with a procedure room inside) are becoming more valuable. Medical clusters that lack a nearby ASC option may signal an investment opportunity.

This area has huge potential to provide excellent investor returns for years to come. With our specialized expertise, Alliance is ready to find and close great deals.

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