DICKINSON, ND-As small, quaint prairie towns such as Dickinson continue to boom amid North Dakota's oil-producing “gold rush,” everything seems to be expanding. From the size of the schools and retail stores to the number of housing units, growth is necessary to keep up with a population that has almost doubled – now estimated at about 30,000 – since the 2010 census.

It would seem to make sense, then, that North Dakota would be one place where replacement hospitals might actually be larger than their predecessors, bucking a strong nationwide trend of reducing the number of inpatient beds.

Yet even amid the boom, it seems as if the shift toward outpatient care is even stronger than North Dakota's incredible growth. As the scheduled opening date for the future St. Joseph's Hospital replacement in Dickinson draws closer – now a year or so away – officials find themselves explaining the outpatient trend to curious townsfolk.

The future greenfield replacement, with 25 beds in a 105,000 square foot facility, will be less than half the size of the current in-town, 1950s five-story facility, which has 225,000 square feet. Even though the new 40-acre campus will include a 77,000 square foot medical office building, the 183,000 square feet of space in the new campus's two facilities will be significantly less than what's in the current hospital.

“It's hard for the community to understand” why the hospital is shrinking, said Reed Reyman, president of St. Joseph's, to local news outlets. He noted that the critical access hospital and its parent company, Denver-based Catholic Health Initiatives, as well as consultants, conducted a thorough analysis to determine the hospital's future size.

The fact is, he said, health systems are providing more and more care in outpatient settings as they strive to become more efficient and cost-effective in the era of healthcare reform. Doing so is critical for survival, many health system executives have said.

In addition, the shift to an outpatient delivery model is being driven by modern technology and new surgical techniques, which have, for example, turned once-complicated operations requiring lengthy hospital stays into same-day outpatient procedures.

Also accelerating the outpatient trend is the Patient Protection and Affordable Care Act, which emphasizes keeping people out of the hospital and holds providers accountable financially for return admissions.

As St. Joseph's tries to raise $15 million toward the project's total cost of about $100 million, at least one oil company has stepped up to the plate: Marathon Oil has pledged $1 million.

John B. Mugford is the Editor of Healthcare Real Estate Insights™, the nation's first and only publication totally dedicated to covering news and trends in healthcare real estate development, financing and investment. For more information, please visit www.HREInsights.com.