The Incredible Shrinking Hospital Stay

After his total knee-replacement surgery, the patient expected to spend at least a night in the hospital, maybe two. After all, he couldn’t move unassisted, was on short-term disability at work, and had been told to expect healing to take a full 16 weeks. But the surgery was in an ambulatory outpatient clinic, and he was sent home three hours after the anesthesia wore off. As he dressed to go, he noticed that his bruising extended down to his ankle. He realized that he was going to have to manage all of his rehab on his own—his walker, compression stockings, ice packs, wound drainage, pain medications, and recovery exercises.

A trend that appeared gradually—sending patients home from surgery more quickly than in the past—appears to be taking off in the world of medicine, circa 2026. Procedures ranging from mastectomies to bariatric surgeries are now being regularly performed in outpatient clinics. So are tonsillectomies, hysterectomies, pacemaker implants, hernia repairs, and, yes, joint replacements. The volume of outpatients is expected to grow by 8% over the next five years; meanwhile, inpatient volume is expected to decline by 1%, according to figures from JLL, a Fortune 500 real-estate firm. Some of this is fueled by so-called “simple” surgeries for low-risk patients, which are performed outside of hospitals and the conveniences they offer, such as proximity to dozens of other medical specialties. “The key question is whether they will be efficient over the long haul,” says David Vied, global sector leader for medical devices and diagnostics at Korn Ferry.

Historically, most surgeries have occurred in hospitals, with only a few—such as colonoscopies, cataract surgeries, and elective plastic surgeries—conducted on an outpatient basis. Today, sending people home shortly afterward means they’re without a nurse when the bandage comes loose or pain rolls in later that night. Though healthcare facilities routinely send patients to short-term rehabilitation when it’s deemed essential, many discharge them, even if they may not be able to do the recommended follow-up care and exercises. Others recovering from outpatient surgery may simply want someone other than their spouse or sibling to help them to and from the bathroom.

Medical officials point to the ample research that suggests low-risk patients enjoy lower complication rates at outpatient clinics, as well as more positive experiences. They note the decades of data demonstrating that a patient’s risk of infection or adverse events increases, respectively, by roughly 1.6% and 6% for each night they spend in the hospital. Further, moving more procedures to outpatient clinics enables hospitals to focus on patients who are higher risk and/or acutely ill. Today, new hospitals are being designed to accommodate procedures that are complex or that bring in higher revenue, with little space available for simple surgeries. Meanwhile, the shift to outpatient surgeries has spurred a relative boom in medical real estate, which has a nationwide occupancy rate of between 92% and 93%, compared to 82% for conventional office space. “It’s been happening for a while, and is gaining traction,” says Vied.

One challenge for healthcare executives is making outpatient care profitable. Insurance companies reimburse much less—as little as 50%—for outpatient procedures. “It costs a lot of money to provide inpatient care,” says Li Ern Chen, market leader in the Physicians Workforce Solutions practice at Korn Ferry. Prices vary, but many medical procedures are cheaper by roughly one-third at outpatient clinics. As procedures are increasingly pushed out of hospitals, healthcare executives are trying to determine where different types of care should be offered, and why—and they’re finding that these questions can have multiple answers. “The financial answer may be different than the ‘what is right for the patient’ answer,” Chen says. 

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