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Trends in Healthcare Real Estate and Capital Planning

By Sharon H. Carter

November 13, 2019

The healthcare industry has experienced dramatic upheaval during the first two decades of the 21st century, and the future promises even more change, as healthcare providers work to offer consumers improved access to care, higher-quality treatment, and greater affordability.

Health systems need to stay ahead of the emerging trends to properly plan and execute sound real estate and capital investments that position them to lead the transformation in healthcare.

By understanding the developments that have already taken place, and identifying changes expected in the future, health systems can reduce risk and improve performance in the planning, design, construction, activation and financing of real estate capital projects, while also incorporating virtual care in the continuum of care.

Here is a look at the evolution of healthcare, from the recent past, to the not-too-distant future.

Past: Access, Quality, Affordability

The revolution in 21st century healthcare took shape with passage of the Affordable Care Act (“ACA”), which was designed to provide health insurance coverage to all Americans, and challenge health systems to deliver better quality care at lower prices.

The ACA provided some 20 million, previously uninsured, Americans with healthcare coverage, and gave consumers access to a broader array of services, such as maternity care and mental health treatment. The ACA also prohibited insurance companies from refusing patient coverage for a pre-existing condition.

The ACA also drove greater transparency, as physicians and health systems were required to provide consumers more information on costs and the quality of care. The ACA also placed a greater focus on wellness, as it covered the cost of preventative services such as cancer screenings and immunizations.

All told, the ACA shifted the nation’s healthcare system from a model dictated by insurance companies, physicians and hospitals, to one that centered on the patient. Americans now, more than ever, have an expectation that they should have access to affordable, and better-quality healthcare. This is causing the seismic shift in healthcare, driving the current changes in healthcare facilities and delivery along with those being designed in anticipation of the future state of healthcare.

Present: Consumer Driven 

Health systems now know that the gleaming hospital on the hill is no longer the paragon of modern healthcare. Consumers are demanding greater access to care, and the trend is to deliver services through retail clinics, urgent care centers, ambulatory surgery centers, outpatient facilities, micro-hospitals and free-standing emergency departments.

Collaboration is critical to meet the current patient demands and expectations. Grocery stores and drug stores are opening clinics because there is a steady stream of customers, and it provides great convenience and lower cost base to consumers.

Health systems can also learn from retailers, which have long used zip codes, demographics and psychographics to determine the best locations for their stores. Health systems are beginning to use the same data to decide where to open new urgent care and outpatient surgery centers.

Another shift is seen as health systems are starting to offer more flexible hours of operation to align with the lifestyles of today’s consumers. The 8-5, Monday-Friday model is being replaced with more evening hours on weekdays and hours on weekends, especially in clinics and urgent care centers.

There is also great pressure on health systems to provide greater price transparency. The U.S. Department of Health and Human Services is leading an effort to require hospitals and healthcare providers to provide its consumers with the true costs of services in an easy-to-read format. It might not be long before a clinic posts a menu of services and prices, much like the menu at a fast-food restaurant.

Healthcare may be big business, but it is also the thread of growing communities that tie together healthcare providers, local governments, high education, retailers and much needed equity to bring care closer to home. Consider the emergence of the “health & wellness village,” a development integrating healthcare, residential units, research and development, education, hospitality and conference services, retail, entertainment and recreation. The idea is to create a healthy life style-oriented destination where people come to live, work, learn and play. A number of these projects are under development across the nation with many more currently in the concept phase.

Future: Driven by Technology

As healthcare moves toward the future, consumers will continue to be at the center, and technology will play a strong role. While health systems will still deliver care through physical locations, technology will allow remote access to services.

The industry is already seeing physicians using technology platforms similar to Skype and Facetime to connect remotely with consumers. This trend is expected to continue, with physicians using the internet of things, or IoT, to leverage technology to diagnose illnesses and prescribe medicines for treatment.

Artificial Intelligence, or AI, has begun to allow robots to help perform surgeries such as hip replacements, bypass surgery and kidney transplants. That trend will only accelerate as the technology becomes more sophisticated.

As the Apple Watch and other similar devices have grown in popularity, the healthcare industry is expected to rely on wearables to help keep better track of consumers’ health. For example, a patient released from outpatient surgery could be equipped with a wearable device that can track pulse, blood pressure and other vital signs.

Similarly, hospitals are expected to use global positioning systems, or GPS, to better track the movement of consumers inside and outside of the hospital. By providing healthcare professionals  the exact location of consumers, GPS can improve efficiency and shorten wait times for consumers. GPS also can be used to track the location of elderly or dependent consumers in their homes, post treatment, as well as to serve as an alert in case of emergency.

And healthcare providers should expect their internet-savvy consumers to rate their experiences. Much like consumers use Yelp to score a restaurant or retailer, health systems will be increasing subjected to being rated for their services.

The Future is Now

Health systems need to pay careful attention to current and future developments to remain viable in a rapidly-changing world.

It is important to be mindful of today’s trends, and have a holistic strategy for the planning, financing, design and construction of new facilities, and its related virtual care opportunities. But it also is important to keep an eye on the future and have a capital plan to address the patient care needs and expectations of tomorrow which will be heavily influenced by advanced technology, affordability and ease of access.

The objective for any healthcare provider is to have a sound strategy to improve the patient experience by providing the right care, at the right place, at the right time, at an affordable cost, and with the right healthcare professionals.


See more from Insight from Hindsight | Issue 29