Acceleration Of Telehealth Adoption Set To Reshape Healthcare Real Estate

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The next time you visit your physician, your appointment may very well be virtual from the comfort of your own home.

Telehealth, or telemedicine, was an emerging part of healthcare delivery long before COVID-19. Now, the pandemic has catapulted the concept into national awareness. Changes in insurance reimbursement have expanded the availability of telehealth, with new implications for healthcare real estate occupiers, owners and investors.

What does “telehealth” mean, exactly? It encompasses electronic, interactive services ranging from a simple phone call or email with a clinician to a virtual exam with a caregiver for the purpose of diagnosis, intervention or ongoing care management. It’s enabled by such platforms as Doxy.me and NextGen Healthcare that make it easy to accept payments or insurance information in conjunction with an appointment.

Despite the convenience and effectiveness of telehealth, and the growth of secure telehealth platforms over the past decades, its pre-pandemic use was limited because of insurer reimbursement restrictions, Health Insurance Portability and Accountability Act (HIPAA) patient data privacy requirements, and practitioner concerns about malpractice.

However, when states began to enact stay-at-home orders in early March in response to the pandemic, telehealth gained new attention among policymakers as a solution to providing healthcare without further jeopardizing patient health. As a result, provisions in the Coronavirus Aid, Relief and Economic Security (CARES) Act lifted restrictions on where, how and with whom Medicare patients can access virtual care.

For the first time ever, there may be a critical mass of patients and practitioners alike able to tap the benefits of telehealth, mostly substituting onsite appointments with simple e-visits. Now, Medicare patients can access telehealth services from their own homes and healthcare providers can deliver service from any healthcare facility. Telehealth visits can take place via any phone with audio/video capabilities, using common consumer platforms such as FaceTime and Skype. Also important, first-time patient visits via telehealth are now eligible for Medicare coverage, too. Any healthcare professionals eligible to bill Medicare for their services can now bill Medicare for telehealth services, too.

From Stopgap Service To Structural Change

The acceleration of telehealth adoption may have been forced out of necessity during the pandemic. However, its use will likely continue to grow even after the pandemic fades.

In the post-pandemic era, the ease, efficiency and convenience of telehealth care will increase patient commitment and retention, and potentially lead to more in-person appointments for follow-up care. Telehealth also improves compliance with prescribed treatment plans, including follow-through on required appointments.

Also critical, telehealth enables patients in even the most remote and underserved locations to access care. And, it may prove to be especially well-suited for remote management of long-term chronic conditions such as allergies, diabetes and multiple sclerosis, and for monitoring such treatments as infusions and pacemakers.

As medical technology continues to advance at a rapid pace, an increasingly sophisticated suite of implantable and wearable devices, or even robotic telemedicine carts, will enhance home monitoring and management capabilities. Healthcare providers who implement this device-enabled “hospital at home” concept can help patients maintain their long-term health safely.

Telehealth’s Impact On Healthcare Real Estate

Clearly, telehealth usage has surged in 2020 to occupy a much more prominent place within the care spectrum than ever before. However, it’s important to keep the trend in perspective. According to FAIR Health’s private healthcare insurance claims data, only 0.17 percent of all services, or less than one-fifth of 1 percent, were provided via telehealth in the first quarter of 2019. In 2020, first quarter usage jumped to about 7.5 percent of services. April and May usage—data is not yet available—is forecasted to be higher than previous months. Thus, while telehealth usage has grown dramatically, its role in the healthcare service delivery spectrum continues to be secondary.

Yet, the long term may reveal a different story. As healthcare providers look to drive down costs while boosting reimbursements, telehealth’s role will likely become more prominent. As a result, many healthcare providers will need to reconfigure their facilities to provide HIPAA-compliant, technology-enabled spaces for the provision of telehealth and remote health monitoring services.

In light of the telehealth trend, the following are four steps healthcare occupiers, owners and investors should consider for the future of their facilities:

Develop telehealth care provider suites. Although patients will be able to participate in telehealth calls and remote health monitoring at home, practitioners will still need space for calls or electronic communications, as well as for remote monitoring and diagnostic equipment. Medical office buildings could provide suites for technicians and nurses to virtually manage intensive care, emergency and home care patients, for example. These spaces would require Internet redundancy, appropriate lighting, screens and acoustics, and assured patient-caregiver privacy for HIPAA regulatory compliance.

Reconfigure public spaces. Even as healthcare providers transition more basic care and monitoring services to online delivery, patients will still need office visits for advanced treatments, extensive physical evaluations and for use of advanced diagnostic equipment. However, the pandemic already has led healthcare providers to rethink their waiting room management to allow for social distancing. For instance, some providers ask patients to wait in their cars rather than in the waiting room and use text messaging to alert patients of their appointments.

With widespread adoption of digital patient registration and text messaging, less waiting room space will be needed even after the pandemic. An onsite kiosk, for example, could be used by patients to register upon entry, and possibly could support healthcare service delivery in other ways.

Reconfigure and repurpose healthcare delivery spaces. Many facilities will require interior reconfigurations, renovations and build-outs to support the transition to telehealth services. The adoption of telehealth care delivery will likely reduce the number of physical exam rooms needed in a healthcare facility and will free up square footage for other purposes. With less space required for physical exams, facilities can prioritize space for high-value imaging, diagnostics, injectables, wound care, advanced and acute treatments, obstetrics and laboratory services.

Pursuing The Possibilities Of Telehealth

As pandemic-related financial losses continue to mount across the healthcare sector, telehealth offers the potential to provide efficient, effective patient care while maximizing productivity-per-square-foot of healthcare real estate. For some healthcare providers, telehealth adoption could dramatically reduce the need for office space or increase the need for different kinds of spaces, depending on the services provided. Whatever the situation, healthcare providers, owners and investors have always been adept at adaptation—and many are already positioned to pursue the possibilities of telehealth.

 

Source: GlobeSt

Medical Office Building Sales Fell Nearly 50 Percent In Q2, But The Sector’s Outlook Is Strong

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The volume of MOB investment sales transactions in the second quarter of 2020 totaled around $2.2 billion, a 43 percent decrease compared to a year ago. In the first quarter of 2020, MOB investment sales volume reached $3.7 billion, according to data firm Real Capital Analytics (RCA).

The CoStar Group, another provider of commercial real estate data, pegs MOB investment sales volume at around $2.1 billion in the second quarter, a drop of 54 percent from $4.7 billion from a year ago.

“The volume of sales has absolutely hit pause, it hit the brakes really hard in the second quarter. You saw a significant drop in sales volume,” says Keith Pierce, research manager for Southeastern region with real estate services firm Transwestern. “The price per square foot did not really shift that much for those sales that did close. But by and large, just everybody froze in late March and largely stayed frozen until sometime in June.”

Average cap rates on transactions involving MOB assets remained at 6.6 percent at the end of the second quarter, flat with the figure from a year ago and the first quarter of 2020, according to RCA. CoStar pegs average MOB cap rates at 6.7 percent, also registering no change from the previous quarter.

“I anticipate seeing somewhat of a flattening,” says Russell Brenner, president of the medical office and life sciences division with real estate investment firm CA. “Once the market truly opens up again and lenders, which have been very selective in where they lend, come back into the market in droves and in a more significant way, I think you may well see cap rates continue to fall. But for probably the next two three quarters, I think it will be a largely flattening of cap rates.”

Earlier during the pandemic, many Americans largely postponed elective procedures, which put a dent on revenues for medical office tenants. But in states where those facilities are reopening, industry sources are reporting pent-up demand.

“We saw very few delinquencies, perhaps a handful of rent deferral requests, but by and large, the healthcare medical office tenancy as a whole stood up very well,” says Brenner. “Certainly now that elective procedures are back on in most parts of the country, MOBs are poised to bounce back and will continue to be a stable and reliable asset class.”

“Medical practices are running at 90 to 95 percent of pre-pandemic levels,” says Steve Hall, senior managing director for healthcare advisory services at Transwestern, who expects this level of demand to continue through the end of the year.

“Many of the company’s tenants are back to 80 percent of pre-pandemic levels of procedures and services,” says Jon Boley, senior vice president of acquisitions and development for HSA PrimeCare, a firm that develops, leases and manages medical facilities.

“The reason these businesses are not back to 100 percent is because they are having to do above-standard cleaning in order to disinfect surgery centers throughout the day,” Hall notes. “A factor that will shore up MOB assets in the future is the dearth of new construction happening right now. During a pandemic, a lot of people aren’t pulling the trigger on a brand new construction. The lack of construction going on right now I think is really going to keep the market strong since there is not going to be oversupply.”

 

Source: HREI

Amazon’s First Neighborhood Health Center Will Be In Dallas-Fort Worth

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Amazon is launching a healthcare pilot with Crossover Health in Irving, offering a clinic designed to serve Amazon employees at nearby fulfillment centers and their families. 

California-based Crossover Health opened its first clinic in the area earlier this year, looking to directly contract with employers in the area and offer direct primary care services that include integrated primary care, musculoskeletal services, and behavioral health and health coaching. The direct primary care practice can be difficult to scale when it asks residents to purchase a membership on top of existing health insurance, but partnering with employers is a win for employers who want value and for the growing clinic. 

“Across the U.S., an increasing number of patients do not have easy access to a primary care physician and instead utilize emergency or urgent care options, which is not only more expensive for patients, but also overlooks important preventative care opportunities,” said Darcie Henry, Amazon’s Vice President of Human Resources via release. “We want to solve that for our employees, and the launch of these new Neighborhood Health Centers will provide a range of quality primary care services for employees across the country – further strengthening Amazon’s industry-leading benefits program, which provides comprehensive healthcare for employees starting on day one of employment.” 

According to Derek Rubino, Senior Program Manager of Workplace Health & Safety at Amazon, Amazon chose DFW because it has one of the largest populations of Amazon employees in the country.

“With large fulfillment centers in Coppell and Haslet and other sites near Dallas, Garland, and Fort Worth, it is a perfect place to try out this model,” Rubino says. “Amazon also looked at primary care usage, health of its employees, and emergency room overuse to make its decision.”

 The pilot program is launching five markets across the country, and by the end of the year, there will be six nearsite clinics to serve Amazon employees in DFW alone. Current and future Crossover locations have been chosen to serve areas where a high concentration of employees live and work. The first clinic is open to all Crossover members, but future Crossover clinics will only be for Amazon employees.

Crossover also acquired a digital health company Sherpaa, allowing it to continue to serve patients during the pandemic. The clinic even has a virtual care studio specifically designed for physicians to do virtual visits so that they don’t use an exam room. 

Rubino says Amazon chose Crossover health because of its virtual health platform, convenient access, and holistic care all under one health. Current Amazon employees can keep their primary care physicians if they want, but Crossover offers another option. Eventually, hours at Crossover will go from 7 a.m. to 11 p.m. six days a week to allow Amazon’s shift workers to access the facility,  

“The landscape is changing drastically,” says Nate Murray, Co-founder and chief revenue officer of Crossover. “I think, through the pandemic, we fell upon something that is more convenient, and even though some people are a little apprehensive [about trying virtual care], they find out that it actually was a great visit and super convenient.”

“We are proud to collaborate with Amazon to support the health and wellness of Amazon’s employees. Crossover Health believes that exceptional primary care is central to continued health and well-being,” said Dr. Scott Shreeve, CEO and co-founder of Crossover Health via release. “Now it’s more important than ever to make care available through multiple channels and across the full continuum. Our advanced primary care model will serve as vital infrastructure to deliver expanded access to care in-person and online to meet the needs of Amazon’s employees and their families.” 

 

Source: D CEO Healthcare Magazine