After 121 Hospital Sales Over 6 Years, CHS Doubles Down On ASC, Outpatient Growth

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Franklin, Tenn.-based Community Health Systems has sold 121 hospitals over the last six years and is nearing the end of a multiyear divestiture plan, and at the same time, the system has invested heavily into the outpatient space, the Nashville Post reported Feb. 19.

Over the same time period, CHS has spent nearly $440 million in developing three ASCs and three freestanding outpatient-based emergency departments, with more in the pipeline.

 “The system pivoted to the outpatient space because the centers are less capital-intensive,” said  Community Health Systems CEO Tim Hingtgen. “We continue our emphasis on the development of service lines, thereby further increasing our acuity levels on the inpatient side. And our investments on the outpatient side are designed to expand entry points into our networks, providing more convenient out-of-hospital care environments that satisfy evolving consumer expectations about the availability and accessibility of healthcare services.”

CHS still operates 85 hospitals in 16 states.

 

Source: Becker’s ASC Review

Medical Office Building Construction Remains Strong In Starts And Completions

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Although many healthcare real estate (HRE) professionals correctly predicted that medical office building (MOB) sales would remain strong during the COVID-19 pandemic, they did express some concern that construction numbers would fall as providers would be forced to focus on myriad other concerns than moving into new buildings.

But that hasn’t been the case so far.

“Medical office construction has remained very strong throughout COVID, both in terms of starts and completions,” said Hilda Flower Martin, a principal with the HRE research and data firm, during a Jan. 26 Revista webcast. “Completions slowed a little bit towards the end of the year (2020), but starts remain pretty much in line (with past years), as there was about 20.9 million square feet of MOB space started as of the fourth quarter (Q4) of 2020 on a trailing 12-month basis (TTM). The MOB projects being built are typically well pre-leased and continue to get larger.”

 

Source: HREI

Healthcare Realty Trust Acquired $547M In Medical Office Buildings In 2020

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Healthcare Realty Trust had a banner year of investment in 2020, acquiring $547 million in medical office buildings, according to the Motley Fool transcript of the company’s earnings call.

Bethany Mancini, associate vice president of corporate communications, said CMS’ decision to eliminate the inpatient-only list in three years and the continued migration of procedures to the ASC payables list will spur development in the medical office building and ASC sectors.

“We expect health systems to continue to ramp up plans to use a network of MOBs [and] ASCs to lower costs and improve profit margins, while focusing higher-acuity care in hospital settings,”  said Mancini.

Mancini also said the future of government health policy is promising under President Joe Biden’s administration. She believes the administration will expand ACA subsidies and potentially Medicaid.

Healthcare Realty Trust has already made $40 million in acquisitions this year and is also actively developing several medical office buildings with projects in Texas and Memphis, Tenn.

 

Source: Becker’s ASC Review