Contact Us January 18, 2021
The year 2020 has greatly impacted all sectors of the industrial market including healthcare facilities due to the COVID-19 pandemic. It has forever changed people’s expectations for healthcare services as well as the way the health system operates. Though the facilities are vigorously adopting telehealth functionalities, their long-term capital, like real estate and management protocols, are yet to adapt to the changes completely. Healthcare must be aware of the recent trends in all areas to be able to make efficient future decisions.
Divesting in healthcare real estate is a great way to minimize unnecessary costs to a health system. This is because it provides more capital liquidity. Also, it lets free up capital for investments towards telehealth, diagnostic technology, emergency specialties, and for expanding patients and employees' engagement and satisfaction. Additionally, for years the healthcare industry has left health systems with a bunch of unwanted assets from several mergers and acquisitions. This has resulted in increased consolidation of these assets. It has become two-fold due to the pandemic pressure, adding to health system funds.
Trends Driving The Healthcare Real Estate
These are the upcoming trends that will drive the future of healthcare real estate and assets. Each of these is expected to restructure existing spaces to better serve patient’s expectations post-pandemic.
An Upsurge in Telehealth – Though the state’s reopening has increased the in-person visits, that does not necessarily reduce telehealth facilities. Adapting telehealth to meet daily healthcare needs has become a necessity due to patients’ demands. Physicians have also shown interest in video consulting platforms. This, in turn, will affect the office layout and services positively.
Enjoyment of Outpatient Services – Encouraged by telehealth facilities, patients are now more interested in a comfortable and more accessible healthcare system. Satellite offices in high traffic zones may lead to health system expansion for better accessibility for patients instead of traditional hospital campuses with long queues.
Value-based Care Transformation – Though legislation and CMS serve towards a value-based care system, the trend is leaned more towards a lower cost preventive care system. This has facilitated the idea of the off-campus health system more effectively and strategies for alternative delivery options. For example, mobile healthcare vans, reaching out to more vulnerable patients, delivering life-saving vaccines.
Pandemic Precautions – Bilateral operations are likely to remain for some more time, even if normal operations return. Healthcare facilities, especially with the consolidation of assets are required to adapt to these precautions.
Technology – Latest diagnostic and testing tools are continuously being released which are demanding reevaluation of the old assets. This has forcibly paved the way for accommodation space for the new assets, resulting in more wasted space. Moreover, remote monitoring apps will come to dominate the health system. They are more affordable and accessible to the customers. Besides, these latest facilities can handle expanded information exchange over the server efficiently.
Healthcare Real Estate Optimization Planning
Health Systems should create strategies to free the money trapped in assets. They need to look more into ways to cater to patients’ expectations and make use of their assets to work better with the current trends. For efficient usage of the assets and optimization of real estate, the following strategies are listed:
Divesting of underused assets of all kinds – This should start with real estate, and eventually lead to a reduction of any unneeded capital investments.
Reduction in administrative spaces – This is achieved with the change of non-clinical workforces’ work status from in-office to partly or complete work from home. They include teams such as finance, legal, marketing, and other back-end teams. Recent popular trends include shared spaces or “hotel” workspaces.
Reconstruction of medical office or interim care units – Spaces that are left unused for an undefined number of workdays should be consolidated.
Termination of expensive leases of care that can be handled remotely, or by low-cost methods, or with strategic partners – This can be followed by making more use of telehealth and dissolving obsolete offices.
Incorporation of telehealth with real estate only where it is necessary – Telehealth is more preferred for some services and functions over others. The healthcare offices must reconstruct their functioning to meet all the needs of the facility.
Monitoring of other unnecessarily expensive assets – Evaluating old but expensive assets such as storage or diagnostic tools are required. It will configure whether they are useful or not in this new post-pandemic care system. Also, if they are not meeting the minimum revenue requirement, they should be sold or deployed to strategic partners.
Modification with off-campus offices – This means making the health system more available and convenient for outpatient and also for new outpatient procedures. It is made possible by investing in outpatients medical offices in high-traffic areas.
Building space for highly demanded facilities – Some medical services like preventive care or behavioral health are always in high demand. To serve patients’ needs, these services must have sufficient space to function, be it physical space or virtual.
Overall, trends make sure a better condition for patients and make more opportunities for providers. Investors are seeing healthcare systems as a safe road for strategic investments, especially when the interest rates are likely to remain low for the foreseeable future.