The right spaces in the right places for modern healthcare needs
Amid soaring community need, shifting reimbursement models and a policy future hanging in the balance, U.S. health systems are revaluating their real estate.
Forward-looking healthcare organizations are finding a strong link between achieving their patient care goals and their location strategy.
Indeed, the industry’s approach to patient care is transforming to prioritize preventive care, and to better reach a growing population. For many organizations, this requires expanding their base—while also maintaining operating margins. That’s no small feat, considering total expenses for U.S. hospitals hovered near the trillion-dollar mark last year, with pressure mounting still to do more with less.
New location and space strategy can help health systems better serve unique patient communities while achieving cost savings, according to JLL’s The Right Place for the Right Care report.
“Hospitals and other medical organizations are finding they can better serve their communities by offering the right care, in the right mix of places,” says Peter Bulgarelli, Executive Managing Director, JLL Healthcare Solutions. “The days of one-and-done facilities are over. Today, it’s about making it easier for patients to get to the care they need.”
The average healthcare system’s footprint of tomorrow could include a regional tertiary hospital for intensive in-patient care, combined with an assortment of micro-hospitals, community-based comprehensive care centers, neighborhood clinics, ambulatory facilities, free-standing emergency units and urgent care clinics.
By providing more of the right space to cater to preventive care, systems can not only help patients to maintain their health, they can also cut costs by downsizing in-patient care beds.
“The idea of offering the right space for the right care makes sense to healthcare leaders,” says Bulgarelli. “For starters, they know preventive care goals are going to be far more realistic when patients don’t have to make the trek to a large, centralized facility like a hospital for a quick check-up. So we’re seeing a lot of interest for development in more accessible places where patients would already be, such as urban office clusters and suburban shopping malls.”
Here are four ways healthcare companies are rethinking their real estate strategies to better ‘follow the patient’:
- Digging deep to stretch real estate dollars
Once organizations break free of the one-and-done model, they can look to other ways of improving capital use. For example, some health systems have massive real estate commitments, which they’ve bought or leased in anticipation of future growth. To generate income in the meantime, some are finding they can lease vacant land or offices to third parties, while keeping the space in their long-term plan. “That line of thinking is a huge reason why many organizations are moving to smaller off-campus medical office buildings,” says Bulgarelli. Last year alone, 447 of these new buildings were developed off campus, averaging 63,585 square feet—a significant figure compared to only 186 that were on-campus, which averaged 97,949 square feet, according to Revista.
- Meeting patients where they are with a mix of convenient, more accessible facilities
Taking a cue from retailers, some organizations are already making it easier for patients to reach them. Rather than sticking with one large facility with countless beds, they’re working in more distributed footprints to offer outpatient satellites closer to patients, thereby keeping them out of beds in the first place. “We expect significant growth of the retail clinic market in the future, as patients demand more convenient, low-cost care,” says Bulgarelli. In the last five years alone, in fact, retail clinic locations have already grown by 38 percent, according to Kalorama Information.
- Leveraging demographics data for better site selection
There may be massive footprints for healthcare executives to contend with, but there is also richer data than ever to manage decisions about it. Some administrators are already tapping into in-depth demographic data and analytics, to examine things like age and income levels, alongside more complex real estate market trends like prices, the competitive landscape and traffic patterns. By leveraging models that map out these data points, healthcare leaders are able to visualize business outcomes as they ponder big questions such as where to consolidate, or which under-served neighborhood should be next on the list.
- Optimizing facilities management to reduce risk
In healthcare, even the simplest facility outage can significantly impact patient care and organizational reputation. But advanced building automation and management systems are enabling health systems to cut such risks and find more efficient ways to deliver consistent service.
Real estate is a major expense for any healthcare organization. But now more than ever, it can be leveraged to drive value across the board. From convenient patient care to fewer costly in-patient beds, health systems are discovering that in order to lead, they just need to follow the patient.