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New Report Signals Growth In Behavioral Health Sector

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A new report from Colliers International signals there is a rising demand for behavioral health services in the US.

Construction for behavioral health hospitals has increased dramatically since 2017, according to the report. In 2018, the supply level was 3.8 million square feet. By 2019, that figure more than doubled to 8.1 million square feet. In 2020, in light of the COVID-19 pandemic, the sector is still growing with 6.4 million square feet set to deliver this year.

While construction costs are declining due to the pandemic, the costs for behavioral health hospitals are expected to hold steady in 2020 at $403.60 per square foot, which is up from $346.80 per square foot just in 2018.

The report states that while in any given year one in four Americans is impacted by behavioral health conditions there is a shortage of behavioral health physicians. Kaiser Foundation research found the US was only fulfilling around 44% of its need for mental healthcare professionals. One of the biggest factors affecting the shortage is the cost of care.

Colliers found the average cost per bed in a behavioral health asset averages $330,000. The Advisory Board said that treating patients with behavioral health diagnoses costs $900 more per month than for patients with no behavioral health diagnosis. As a result, less than half of patients receive treatment, according to Colliers.

And now, COVID-19 is placing an unprecedented impact on behavioral health services. In late March, a McKinsey survey found 63% of respondents were feeling anxious, depressed or both.

“The anxiety, stress, financial strife, grief, and general uncertainty of this time will undoubtedly lead to behavioral health crises,” McKinsey said in their survey.

The pandemic has signaled the greater need to integrate both physical and behavioral health. The company stated that integration between the two services could help lessen the shortage of people getting help.

Colliers echoed that sentiment by stating “the majority of patients with a behavioral health diagnosis also have a medical comorbidity.”

One of the suggestions from Colliers is screening in both physical and behavioral health settings. Moving forward, Colliers said the success of behavioral health services is dependent on a system where physical and behavioral conditions are treated together and where private/public partnerships occur more often. The 10 largest behavioral health hospitals in the U.S. are all either government-run or owned by nonprofits.

They note that the success of Orange County, CA initiative BeWell OC is just one example of what the healthcare system could look like in the future. The “wellness hub” was a public/private development.

 

Source: GlobeSt.

Walgreens Strikes $1B Deal To Open Primary Care Offices In Its Drug Stores

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Walgreens Boots Alliance and VillageMD are expanding their partnership with a $1 billion deal in which between 500 to 700 primary care offices will be opened in Walgreens’ drug stores over the next five years.

After that the plan calls for hundreds more to be built. The offices, which will be located in more than 30 US markets. will be staffed by more than 3,600 primary care providers recruited by VillageMD. More than 50% will be located in Health Professional Shortage Areas and Medically Underserved Areas/Populations, as designated by the US Department of Health and Human Services. There will also be 24/7 care available via telehealth and at-home visits.

This  nationwide rollout follows a trial with five in-store clinics in the Houston, Texas area, which opened last November. Most of the clinics will be approximately 3,330 square feet each, with some as large as 9,000 square feet.

“These clinics are a significant step forward in creating the pharmacy of the future, meeting many essential health needs all under one roof as well as through other channels,” said Stefano Pessina, executive vice chairman and CEO of the Walgreens Boots Alliance.

Under the terms of the new agreement, Walgreens will invest $1 billion in equity and convertible debt in VillageMD over the next three years, including a $250 million equity investment to be completed today.

Of Walgreen’s investment, 80% will be used by VillageMD to fund the opening of the clinics and build the partnership, including integration with Walgreens digital assets. Assuming full conversion of the debt, it is anticipated that Walgreens will hold a 30% ownership interest in VillageMD by the end of the investment.

 

Source: GlobeSt.

Survey: Patients Strongly Prefer Off-Campus Healthcare Experiences

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In an effort to uncover critical insights into patient behavior and serve as thought leaders within the healthcare real estate industry, Physicians Realty Trust (the “Company”) commissioned an independent survey in five of the Company’s largest markets to better understand consumer perceptions of healthcare facility safety within the context of the COVID-19 pandemic.

CVR and Carmichael & Company, healthcare consultants based in Indianapolis, conducted the panel-based survey for the Company, surveying the Atlanta, Dallas, Louisville, Minneapolis, and Phoenix markets. A total of 2,018 respondents were surveyed, resulting in an average margin of error of 2.19% across the five markets.

Strong Consumer Preference for Off-Campus Medical Facilities

The research revealed that when seeking medical treatment, the overwhelming majority of respondents prefer to receive care in an off-campus medical facility located a mile or more from a hospital campus. Based on survey results, this trend is likely to continue for the foreseeable future due to COVID-19, especially given concerns regarding a possible resurgence of the virus later this year.

“The findings affirm our long-term observations in consumer attitudes and validate the Company’s continued investment strategy targeting off-campus medical office buildings,” said John T. Thomas, President and CEO of Physicians Realty Trust. “As thought leaders in the healthcare industry, we commissioned this research to advance our understanding of COVID-19’s impact on our business, as well as provide insight and guidance to our healthcare partners.”

In the report, respondents also provided insights on enhanced safety and hygiene protocols, spokesperson preferences for COVID-19 communication, and other shifting perceptions of healthcare highlighted by the pandemic.

“For many years, consumers and physicians have been seeking services at locations convenient to them and their homes, often away from hospital campuses,” Thomas added. “This study verifies that especially in light of COVID-19 safety and cleanliness concerns, consumers strongly prefer medical office facilities located away from the hospital campus.”

The Company is sharing these findings with its healthcare partners and stakeholders to increase awareness and better understand healthcare consumers’ decisions.

To access the report, go to www.docreit.com/research.

 

Source: PRNewswire