When It Comes To Healthcare, CRE Is Driven By Data

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Understanding and analyzing data is especially important in the healthcare industry, where reimbursements are often tied to the percentage of square feet dedicated to patient care.

For commercial real estate, that means healthcare providers can now be more judicious when it comes to design and space allocation.

GB Architects principal Lois Broadway says clients are now looking at local demographics to determine the average customer age, and also using data to determine the most likely type of care that its patient base will require.

“We are working with a client that started a full assessment on their local demographics to determine ages, admissions into local hospitals and what they need while there,” said Broadway, whose colleague Melissa Kelii will moderate a panel at Bisnow’s National Health Series: Pacific Northwest.

This data drives decisions, like whether a hospital should include more maternity units or make more space for geriatric specialties like cardiology and knee replacement specialists, she said. Hospitals should also consider how much time they allow patients to recover. For example, some hospitals let patients remain in the hospital for three days, while others end the visit after 24 hours.

“Adding to the issue is that fact that Medicare and Medicaid reimbursement is based on the percentage of the facility that provides direct patient care,” Broadway said. “They look at the whole picture and then give you a facility charge,”

So if 60% of the facility is dedicated to patient care and 30% is dedicated to secondary patient support space, such as storage areas, the provider will be reimbursed at different rates for the different uses. Areas like parking garages, which are necessary but not related to patient care, are not reimbursed at all, she said.

All this makes maximizing space a smart financial decision. It is particularly important to find ways to minimize the amount of square footage dedicated to data storage. Often, data is now being stored off-site through cloud providers. The healthcare-focused cloud computing industry is set to hit $40B by 2026, according to a report by Acumen Research and Consulting.

“The cloud can reduce IT costs, provide quick access to business applications and forms and provide medical teams with on-demand patient data from anywhere,” Qentelli VP and Head of Innovation Vishnu Nallani told Bisnow. “However, as data storage moves to the cloud, healthcare companies must be careful to secure it and ensure the privacy of their patients. Data breaches cost healthcare organizations millions of dollars each year, because patient data is seen as extremely valuable on the black market. Having security features in their cloud like perimeter and internal firewalls, intrusion detection systems and data encryption is extremely important.”

“Meanwhile, storing all this data off-site can increase the percent of square feet dedicated to patient care and increase revenue,” Broadway said. “Healthcare provider companies are looking at ways to increase revenue without adding space. Sometimes remodels work. Maybe they can add another patient per hour to a general practitioner’s schedule. Internal remodels that add rooms but not square footage can pay off. Turning space previously used for data storage into patient care areas increases the reimbursable space. It’s not just about how and where to store data. It’s also about collecting the information you have and analyzing it to determine if you are managing your human, resource and capital assets efficiently.”

When designing and selecting healthcare facility sites in Seattle, Broadway hears a lot of concern from clients about transportation to and from the facilities.

“All of our clients express concern about transportation,” Broadway said. “That includes the location of bus stops, access for staff and patients and even other forms of transportation such as shuttles, ride-share and valet.”

Broadway said her clients in Seattle, as well as in other suburban cities, are looking for more bicycle storage and electric charging station stalls.

 

Source: Bisnow

What’s Behind Medical Office Buildings’ Strong Trajectory

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One of the US’ fastest growing industries, healthcare spending reached almost $3.5 trillion annually in 2017.

The US Centers for Medicare & Medicaid Services anticipates national healthcare expenditures to grow to $5.7 trillion by 2026. With this growth, healthcare real estate, specifically medical office buildings, are poised for further success.

Medical Office Buildings

Medical office buildings comprise approximately 10% percent of the US office sector. These buildings are typically about 40,000 square feet and range from small physician offices to large healthcare systems. Investors are attracted to this asset class due to its stability and positive forecasts for a strong performance. On the rise for the last four years, medical office sales totaled $10.4 billion in 2018.

“Medical office buildings are so popular and are in demand as a renovation or as new construction,” says Jason Signor, CEO and partner of Caddis Healthcare Real Estate. “The market is phenomenal and occupancy levels and rental rates are healthy.”

It is well-known that the the aging US population is directly correlated with the rising demand for healthcare as doctor visits dramatically increase with age. Individuals 65 years and older spend five times more on healthcare than those who are younger. Yet, even with the favorable demographic and economic backdrop, new healthcare construction has not kept up with demand.

“With the continued shift from inpatient to outpatient care, new real estate strategies are being implemented which includes moving to urgent care centers, MOBs, micro-hospitals and health-system sponsored wellness centers,” says Signor. “ Outpatient care is booming and will continue to flourish in the future. The challenge, of course, is for our sector to keep up with the growing demand.”

Ambulatory Surgery Centers

Ambulatory surgery centers—healthcare facilities which offer patients the option of having procedures and surgeries performed outside of the hospital setting—have drastically reduced healthcare costs. According to the American Hospital Association, the number of ASCs and hospitals are almost equal with 5,534 hospitals and 5,532 surgery centers. While hospitals have declined by 5%, surgery centers have grown as much as 82% since 2000.

“ASCs will continue to dominate the healthcare real estate landscape,” says Signor. “We won’t see these large hospital campuses being built as much. As the campuses get older however, you will see more renovations as hospitals keep up with medical technological advances and stay abreast with ASCs.”

 

Source: GlobeSt.

Multiple New Developments In Dallas’ Medical District Proves Major Growth And Movement

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The Medical District’s population in Dallas is projected to grow by 12.5% from 2016 to 2021,

Olerio Homes’ launch of its first townhouse development at Kimsey Place in the distrct could’t come at a better time. The area is only minutes from downtown, area hospitals, universities, Love Field, the Park Cities and major highways.

Containing 28 units, the first of four phases of townhomes is now available for sale or lease. With sale prices ranging from the high $300s to the mid-$400s, this housing should be attractive to the medical and higher education personnel who work in the district.

Olerio Homes’ President, Lou Olerio, couldn’t be more satisfied with the company’s new venture.

“I had been looking for multi-family land for a while but didn’t want to develop in East Dallas or The Cedars due to the market saturation,” Olerio says. “I was excited to find a pocket off Maple and Inwood that offers affordability, location, and a developing neighborhood in need of more housing options. I feel like Kimsey was a perfect fit.”

With these homes’ affordability and convenience comes a rapidly developing neighborhood—one of the hottest real estate markets in the area. That’s not all. In the works is a Texas Trees Foundation project to make the area greener and more walkable which should increase property values for homeowners who get in on the ground floor of this new development.

With a job growth rate of nearly double the national figure that shows no sign of stopping, the Dallas-Fort Worth-Arlington area has become a magnet for job seekers all over the country. The state’s low tax rate continues to attract many of the nation’s top firms, with plans to relocate or establish branches in this growing region.

All that good news means that affordable housing will become scarcer as demand rises. To meet that need, Olerio Homes is pre-selling 24 patio homes in Modella Park, a gated development near Webb Chapel and Forrest. These homes will be available during the second quarter of 2020 and will be available at prices from the high $400s upwards.

“With the land rush on the east side of I-75, almost all land in the city’s east side had already been bought,” Olerio explains. “Since Olerio Homes bought the new land, there wasn’t much development on the west side of town. These new developments give buyers an option to own a home with as little as three percent down. Combined with the area’s potential for upside appreciation, this development’s central location and proximity to hospitals, universities, and businesses make buying a home there an attractive opportunity for first-time homeowners and new residents.”

 

Source: Tipp News Daily