The Economic Case for Health on the High Street 

Rethinking the economics of outpatient care

Acute hospitals were never designed to be the default destination for large volumes of outpatient care. Their estates, staffing models and operational complexity reflect a very different purpose: the delivery of acute, specialist and high-risk treatment. Over time, however, they have become the destination for a growing volume of routine appointments, reviews and follow-up activity.
The result is a cost structure that is difficult to avoid and even harder to slim down. Large, complex hospital estates carry significant fixed overheads, from buildings and energy use to security, logistics and non-clinical staff. None of this reflects poor care or inefficiency at a local level. It is simply the reality of delivering relatively straightforward activity within environments designed for acute care.

NHS estate data shows the scale of this infrastructure challenge. The cost of running the NHS estate is measured in billions each year, before accounting for the wider pressures of backlog maintenance, energy use and constrained clinical space. In that context, the location of outpatient care is not a neutral operational choice but a question of whether the system is using its most intensive environments for the activity that truly requires them.
That does not mean outpatient care should be moved indiscriminately into the community. As James Sumner, former Group CEO at University Hospitals of Liverpool Group, reflected during a FORTIS discussion, the more important question is what type and volume of outpatient care can realistically be delivered away from hospital without duplicating high-cost resources.
A more selective approach recognises that specialist workforce time is often the most expensive and constrained part of the model. If consultants, diagnostics, equipment and specialist teams are spread too thinly across too many locations, decentralisation can quickly become inefficient rather than productive.

It also recognises that some outpatient activity may not need a building at all. James noted that a recent examination at his hospitals showed that 45% of consultations only required a conversation. For those appointments, the most appropriate alternative may be digital or telephone-based care, not a high street facility. If the purpose of an appointment is discussion, advice, reassurance or review, the best economic and patient-centred answer may be to avoid travel altogether. 

Health on the High Street therefore has a more specific role. There will always be patients who need to attend hospital because the required diagnostics, specialist input or escalation support cannot sensibly be replicated elsewhere, just as there will be patients whose needs can be met remotely. The opportunity lies between the two: appointments that require physical presence, local assessment, basic diagnostics or practitioner support, but not the full infrastructure of an acute hospital.
This is the “sweet spot” James identifies. It is where local access, digital connectivity and efficient use of specialist expertise can come together. In this model, specialists do not necessarily need to be physically present in every location. They can remain centralised where that makes clinical and workforce sense, while local practitioners, diagnostics and digitally enabled estate provide advice and care closer to home.

That is a more credible economic model. It avoids the false choice between hospital and high street and instead asks how each part of the system can be used for the work it is best placed to deliver.

When does the estate investment stack up?

Once a service has been identified as suitable for delivery closer to home, the estate question follows: where should that care actually happen, and what is the right investment to support it? 

The changing nature of town centres creates an obvious opportunity. As retail and working patterns have shifted, some buildings have become underused, opening up space that could potentially support more accessible neighbourhood healthcare. But the existence of available property is not, in itself, an economic case for using it.
As Pradip Karanjit, Fit for the Future Director – Elective Care, Sandwell and West Birmingham Hospitals NHS Trust and The Dudley Group NHS Foundation Trust, puts it,

The starting point is not the availability of a suitable-looking property, but whether it can support the type of care being moved

The distinction matters. A building suitable for routine consultations or rehabilitation may be poorly suited to services that require specialist diagnostics, larger equipment or more complex clinical infrastructure. The property therefore needs to be assessed against the activity it will support, including the scale at which that activity needs to operate.
That assessment goes beyond the purchase price or rent. Accessibility, infection prevention, ventilation, fire safety, utilities and digital infrastructure can all add to the cost of adapting an existing property for healthcare. The building’s layout also affects how much of its floor area can function as productive clinical space. A property may look generous on paper but offer considerably less usable capacity once circulation, waiting areas, staff movement and technical requirements are taken into account.

Those considerations continue beyond conversion. Maintenance, energy, cleaning, security and staffing shape the ongoing cost of the facility, while lease length, rent reviews and reinstatement obligations affect whether the initial investment can realistically be recovered. A property that appears inexpensive at the outset may therefore prove poor value if substantial adaptation is required or the terms of occupation provide too little certainty. 

But perhaps the more important question is what happens elsewhere in the system when activity moves. Relocating outpatient care from an acute hospital does not automatically remove the cost associated with that hospital. Many estate costs are fixed and remain whether a clinic moves or not. The value may instead come from what the released capacity allows the organisation to do differently: accommodate more complex care, consolidate activity, improve utilisation or avoid the need for additional capital development. That is a fundamentally different proposition from simply arguing that community space is cheaper.
It also exposes the risk of getting the model wrong. A new community facility that duplicates equipment, requires additional staffing or operates below capacity could increase total expenditure rather than reduce it.  Moving care closer to home only creates economic value if the wider pathway has been designed around that move.

The appraisal therefore needs to look beyond the individual property. It needs to consider the whole-life cost of creating and operating the facility, the activity it can realistically accommodate, the capacity it releases elsewhere and whether the new configuration makes better use of scarce workforce and equipment. 

For Health on the High Street, that is the more meaningful test. The question is not whether an empty town-centre building can be converted into a clinic cheaply, but whether that setting enabled the NHS to deliver the right care in the right place, at a sustainable cost, while using its wider estate and resources more effectively.
Patient time, accessibility and the benefits to town centres add further value to that case. But, as Pradip highlights, those benefits should not be confused with savings the NHS can actually realise. A credible economic argument needs to be clear about the difference.

The value of patient time

Economic value is not created solely within the NHS balance sheet.
Hospital visits carry a hidden cost borne by patients, carers, employers and the wider economy in the form of travel time, waiting time and associated expenses. That burden can be particularly pronounced when attending an acute hospital, where journeys may involve greater reliance on car travel or multiple public transport connections, alongside longer dwell times within the estate.
For patients with long-term conditions, caring responsibilities, mobility challenges or insecure work, the burden of attending can be significant.

Digital care can remove that burden entirely where a physical appointment is unnecessary. That is why the conversation-only element of outpatient activity is so important. If a patient does not need to be examined, tested or seen in person, the most valuable journey may be the one they do not have to make. Where face-to-face care is required, location still matters. High street and town-centre settings can be easier to reach and easier to combine with everyday routines, reducing time away from work, travel costs and reliance on family members. 

At the scale of outpatient care, those individual gains can become material. Thousands of avoided or shorter journeys return time to patients, carers and employers while potentially reducing pressure on acute estates. The value may be difficult to see in any single appointment, but it becomes more significant when repeated across large volumes of activity. 

Footfall as an economic driver

When appropriate care moves out of the hospital estate and into a high street setting, its impact is no longer confined to the health system. It becomes part of the daily life of the town centre. One of the challenges facing many high streets is not simply the level of footfall, but its volatility. Retail-led activity is often concentrated around particular times of day, days of the week or seasonal peaks, and is closely linked to discretionary spending. Healthcare has a different pattern. Appointments are planned, recurring and distributed across the working week, creating a more regular flow of people into town-centre environments.

That regularity has value. A hospital appointment is usually a self-contained journey, disconnected from the other activities of daily life. A high street appointment places patients and carers close to shops, pharmacies, cafés, public transport and other local services, increasing the likelihood that the visit forms part of a wider set of everyday activities. 

This effect, however, should be understood carefully. Not every healthcare visit leads to additional spending, and it would be unreasonable to suggest otherwise. Yet research into high street behaviour repeatedly shows that a proportion of visits lead to incidental economic activity. A coffee before an appointment, a sandwich afterwards, or the use of nearby services while already in town all contribute to small, everyday transactions that add up over time. 
Even when approached conservatively, this effect translates into a modest but meaningful uplift in local economic activity, typically amounting to several pounds per visit. On an individual basis, that figure may appear minor. Distributed across thousands of appointments and multiple local businesses, it supports the circulation of money within the local economy and helps underpin the viability of town centre services. 

The wider benefit lies in the regularity of that activity. Healthcare is less dependent on peak retail demand and can provide town centres with a stable anchor use throughout the working week. But the clinical case must still come first: the location needs to work for the service being delivered and for the people using it. Where those conditions are met, healthcare can support both more accessible care and a more resilient local economy. 

Bringing the value together

None of these benefits, taken alone, is likely to transform the economics of outpatient care.
A more proportionate setting, a viable estate model, less time lost to travel, better use of specialist capacity and additional activity within local economies each create value in different ways. The strength of the model comes from how those benefits interact when care is deliberately matched to the setting best equipped to deliver it.

That requires a more nuanced view of value than simply asking whether community care is cheaper than hospital care.
Some benefits may translate into costs that can genuinely be avoided. Others may release capacity that allows an organisation to accommodate more complex activity, improve utilisation or defer future capital investment. And some sit beyond the NHS balance sheet altogether: time returned to patients and carers, easier access to services and greater economic activity within local centres. These effects matter, but they are not interchangeable, and a credible case needs to be clear about where value is being created and who ultimately realises it.

The starting point remains the clinical pathway. Activity requiring specialist infrastructure, diagnostics or immediate access to wider support should remain within the acute setting; appointments that can be delivered effectively without physical attendance may be better suited to digital models. High-street and community care occupies the space between the two, where face-to-face access still matters but the full infrastructure of an acute hospital does not.

At the scale of outpatient care, relatively small improvements in how capacity is used can become significant. The economic case does not depend on every appointment producing a large individual saving, with more than 100 million outpatient attendances recorded in England each year. It depends on making better decisions repeatedly: avoiding unnecessary journeys, using expensive clinical environments more selectively, releasing constrained capacity and investing in community estate where the wider model genuinely supports it.
There will therefore be no single template for Health on the High Street. The balance between acute, digital and community provision will look different in a dense urban centre than it does in a rural or coastal system. Population need, transport, existing estate, workforce availability, diagnostic requirements and patterns of demand will all shape what is viable locally.

For systems, the strategic task is not simply to identify activity that could move out of hospital. It is to understand where moving it would improve the pathway as a whole.
That means asking not only where care can be delivered, but where it should be delivered to make the best use of clinical expertise, infrastructure, capital and patients’ time. Health on the High Street creates its greatest value when it is the consequence of that analysis, rather than the starting assumption.