Hospitals are making large investments in surgical centers capable of high-intensity care

The surgical landscape is changing.

Demand for surgeries is expected to rise in the US in the coming years, largely driven by a growing aging population and the rise in chronic diseases. By 2035, it’s estimated there will be more people ages 65+ than 18 and younger in the US.

As more procedures move to outpatient settings, the proportion of complex cases in inpatient settings is increasing, too. Older people tend to need higher-intensity care, and more complex procedures often require more advanced technology. These procedures also tend to be reimbursed at higher rates, making them a potential profit center for hospitals, experts told us.

As a result, health systems across the country are investing in high-tech robotic surgery systems, larger operating rooms, and technology to make surgery more efficient.

For example, Allina Health, a large Minneapolis-based health system, is opening a new, more than $1 billion surgical center on August 29.

The 620,000-square-foot building, called the Richard M. Schulze Surgical and Critical Care Center, will focus on highly specialized care and complex surgeries, largely in the inpatient setting.

“When I came nine years ago, it was clear that the medicine was changing; the critical care needs of our community were changing; the complexity of patients and their needs were changing; what you require in equipment, technology, and capabilities is changing,” Lisa Shannon, president and CEO of Allina Health, told Healthcare Brew. “We needed a new surgical and critical care space to accommodate those needs.”

A look inside

The new 10-story facility towers over its neighboring buildings and is located just south of downtown Minneapolis on Allina’s existing Abbott Northwestern Hospital campus.

It has a total of 30 operating rooms, the most of any Allina Health facility. One floor is dedicated to general surgeries, while the other is primarily for neuro, orthopedics, and spine procedures, according to Whitney Johnson, VP of operations at Abbott Northwestern. All are equipped for robotic surgery.

Robotic surgery has skyrocketed in recent years. A 2020 study from the University of Michigan found that between 2012 and 2018, robots went from being used in just 1.8% of general surgeries to 15.1% of general surgeries.

“It used to be that minimally invasive surgery was innovation and open surgery was a default,” Thomas Tsai, associate professor in the Department of Health Policy and Management at Harvard University and a practicing general GI surgeon, said. “Now it’s actually become where minimally invasive approaches, whether laparoscopic or robotic, is becoming the default.”

Robotics allows surgeons to perform more complex procedures by increasing their precision and control, according to the Mayo Clinic. Minimally invasive surgeries using robotics aren’t always performed as outpatient operations. But patients undergoing minimally invasive robotic surgery tend to see faster recovery times, and shorter stays save hospitals money, according to the American College of Surgeons.

Minimally invasive care has long been a priority for Allina Health, according to Jolene Singh, operating room medical director for Abbott Northwestern.

“Allina has always been very forward-thinking and very progressive in terms of minimally invasive care, specifically robotic surgery,” Singh said. “That’s something that’s really important for us to continue to progress because it means faster recovery and quicker return to life for our patients.”

Robotic surgeries require special kinds of capital investments. Each of Allina’s new operating rooms is over 700 square feet, compared to the standard 400 to 600 square feet. These are sized to accommodate the electrical and technological infrastructure required to support surgical robotics, Johnson said.

While a range of surgeries is planned to take place in the new building, Singh said the health system considers neurosurgery, cardiac care, and cancer care as some of its programs of distinction.

An example of the type of complex surgery Allina plans to perform at the new center is a single-anesthetic lung cancer case, Singh said. That’s when a surgeon uses a robot-guided bronchoscopic biopsy to take a tissue sample of a patient’s lung. That sample is immediately taken to the lab, and the lab analyzes it. If it comes back as cancer, the patient can undergo a cancer resection during the same procedure, according to Singh.

“We have the ability to do all of that care all in one shot to streamline the care for these patients,” she said.

The building also has a new intraoperative MRI, or iMRI, machine that allows surgeons to get real-time imaging when needed during brain or spine surgeries. That helps them ensure they’ve gotten clean margins on a brain tumor removal, for example, according to the Mayo Clinic.

“They do it to make sure that they’re doing the surgery as complete as possible the first time around, so instead of having to then take that patient off the operating table,” Singh said, “it’s all done in one spot in real time.”

After surgery

Because the surgeries performed at the new center will be highly complex, many patients will require overnight stays, Shannon said.

The hospital has invested heavily in making patient stays more comfortable. The center has 190 private patient rooms, all equipped with a smart whiteboard that is integrated with each patient’s medical record. Nurses and other providers can enter clinical notes directly into it, and patients and their family members can leave questions for their care team to address during rounds, Johnson said.

Rooms also come with interactive TVs, which can be used for patient education, tele-interpreters, video calls with family members, and remote patient observation, according to Johnson.

The building is topped with a 27,000-square-foot rooftop garden filled with rows of evenly spaced plants, a curvy walking path, and benches to rest on. It gives patients and their families a place to relax and get some fresh air. One long length-of-stay patient even got married in the garden in July, according to Johnson.

Health systems in recent years have increasingly invested in green spaces to improve overall well-being for patients, their families, and staff, according to the Association of American Medical Colleges.

Financial strategy

Surgery is generally a very important specialty for health systems.

It’s a “main margin engine,” Alon Bergman, assistant professor of medical ethics and health policy at the University of Pennsylvania, told Healthcare Brew. According to a 2022 study, surgeries often account for 40% to 70% of total hospital revenues.

In general, more complex surgical cases lead to higher reimbursement, Bergman said. Inpatient care is also reimbursed at much higher rates compared to outpatient care.

Health systems may be focusing more on complex surgeries as a revenue driver, Tsai said. However, it may also be that “what’s left for hospitals to manage in the inpatient setting is more complex,” so health systems must provide the resources needed to tackle those kinds of procedures.