How providers boost revenue, cut costs through hospital redesign

Modern Healthcare – Wednesday, April 9, 2025
By Alex Kacik

Health systems are increasingly considering shared physician workspaces to make room for more patient care.

Some providers have replaced private clinician offices with coworking spaces in their hospitals and outpatient clinics. The shared office model is poised to grow given the high cost of construction, real estate constraints, increasing demand for patient care and potential federal funding cuts linked to Medicaid and the Affordable Care Act, healthcare architects and health system executives said.
“This will start to take off, I don’t think health systems will have a choice,” said Molly Wolf, principal at architecture firm NBBJ. “Health systems are really space constrained, every hospital expansion is in the billions of dollars and space is a premium. You have to think about efficiencies.”

Coworking office designs typically feature desks and meeting rooms that can be reserved by physicians or are assigned to them certain days of the week. Some workspaces are in a coworking area and others are private rooms that can be used for dictation, meetings or calls. Shared workspaces are often paired with amenities such as lounges, fitness centers and outdoor areas.

These types of offices are designed to improve communication and employees’ mental health by breaking down silos and promoting rest and relaxation, architects said. Also, health systems can boost revenue and access by repurposing private office space for patient care, such as cardiology and orthopedic services.
However, some health systems are wary of taking private offices away from physicians. If clinicians are considering multiple offers from health systems, a private office may tip negotiations, Wolf said.

“There are some concerns about recruitment and retention,” she said. “There is a culture built around physicians having a private office. It’s a hard thing to break, so you need strong leadership and clinician advocates.”

Several unions and physician associations did not return requests for comment.

The shared clinician workspace model has slowly gained traction.

Advocate Health over the last several years has set up shared physician workspaces at some of its hospitals and clinics. The Charlotte, North Carolina-based health system replaced individual offices with shared, team-based spaces, which have helped improve communication, bolster care coordination and reduce the size of its new facilities, Collin Lane, senior vice president of facilities management at Advocate, said in a statement.

The Medical College of Wisconsin opened an eight-story office building on the Milwaukee Regional Medical Center campus in 2017, relocating about 1,400 physicians, nurse practitioners, researchers and healthcare staff into a central workplace. The building features shared working spaces that include modular workstations, break areas and conference rooms.

Mike Stanislaus, who is now facilities director at the University of Washington School of Medicine, helped design the office building when he worked for the Milwaukee-based system.

“The Medical College of Wisconsin realized it could no longer keep physicians and support staff in patient care space,” he said. “It was far too expensive to use that as office space.”

The UW School of Medicine in Seattle is considering a shared clinician workspace, said Stanislaus, pointing to the University of Colorado Anschutz Medical College’s 2019 shared office design as a potential model. While talks of UW’s redesign are in the early stages, the health system has been downsizing hospital-based office space used by its administrative staff, such as IT workers.

Congressional talks regarding spending reductions, such as limiting federal Medicaid funding, have added urgency to the system’s need to reduce overhead and increase revenue, Stanislaus said.

“We are focusing more heavily on making hospitals and clinic spaces more effective and efficient,” he said. “Just within the last two or three months, when we talk to people about making better use of that space, they get it.”

Health systems will be forced to do more with less space, especially as construction costs and rents increase and reimbursement declines, experts said.

Some health systems are implementing a shared physician workspace model in every new facility, said Kevin Correia, an architect who owns Kevin Correia Architecture.

“It is happening across many healthcare systems and clinics. With our outpatient clients, for instance, the increase in rental rates has highlighted the need to optimize floor plan layouts and workflows that put a premium on revenue-generating spaces.”

Health systems are trying to limit office space in their hospitals, even if they are not overhauling physician workspaces. For instance, health systems in South Florida are centralizing physician offices in medical office buildings close to the hospital campus, said Johnathan Peavy, South Florida operations manager for construction firm Robins & Morton.

“Health systems can maximize patient care square footage within the actual hospital,” he said.

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