For decades, the hospital was the center of gravity in American healthcare. If you needed surgery, you went to the hospital. If you had an ear infection on a Saturday, you went to the hospital emergency room. If you needed stitches, you went to the hospital.
That’s changing fast.
Care is migrating out of hospitals into lower-cost, more convenient ambulatory settings. CMS is actively accelerating this shift through policy — adding procedures to the ASC-approved list, adjusting payment rates to favor outpatient settings.
Ambulatory Surgery Centers (ASCs) — Purpose-built facilities for same-day surgery. About 6,100 nationally. A knee arthroscopy that costs $15,000 in a hospital outpatient department might cost $6,000 in an ASC — same procedure, same surgeon, same outcome. The economics are compelling, which is why CMS keeps shifting procedures to this setting.
Urgent Care Clinics — Walk-in clinics for non-emergency acute problems: ear infections, sprained ankles, minor lacerations. Extended hours, no appointment needed. They exist because your primary care doctor is booked three weeks out and the ER charges $2,000 for a strep test. About 14,000 nationally and growing.
Retail Clinics — The smallest, most limited care setting. A nurse practitioner inside a CVS or Walgreens handles vaccinations, strep tests, UTIs, and pink eye. Maximum convenience, minimum scope. CVS MinuteClinic operates about 1,100 locations. Walmart tried and failed — Walmart Health closed all locations in 2024.
The Competitive Dynamic
The shift to ambulatory care creates a competitive tension. Every procedure that moves to an ASC is revenue that leaves the hospital. Every sore throat treated at urgent care is a patient who didn’t use the ER. Hospitals have responded by building their own ambulatory networks, but the trend is clear: the hospital is becoming the place of last resort, not the default.