By Matt Giffune
Disruption is inevitable within any industry, and healthcare is no different. However, the COVID-19 pandemic accelerated the rate of disruption, forcing healthcare systems to reevaluate and adapt nearly every strategy in an effort to find new ways of providing care delivery. Inevitably, a number of these strategies involve healthcare real estate, but not necessarily in the way you might think.
Although healthtech opened up new avenues for doctors to diagnose, treat, and communicate with patients during the pandemic, the future of healthcare technology does not spell doom for healthcare real estate.
Real estate will need to keep pace with the technological advancements currently taking place across the healthcare industry. It’s the only means of supporting this drastic digital transformation and continuing to deliver on patients’ new expectations of care delivery.
Post-Pandemic Healthcare Real Estate Strategies
Digital health is here to stay, but healthcare systems will still need in-person locations to provide services. Real estate strategies will vary from one healthcare provider to the next, with scale, location, and general market conditions all playing roles. But here are three overarching points to consider when it comes to the future of healthcare real estate:
1. Rethink administrative space while integrating additional telehealth solutions.
It’s hard to deny that COVID-19 drove telehealth adoption. Although barriers still exist for patients to fully embrace virtual medical visits, the future of healthcare will certainly be shaped by this technology. Such technology must be secure and accessible to doctors, nurse practitioners, and other staff. Moving forward, then, factor in telehealth solutions with all structural and spatial changes or improvements to healthcare real estate facilities.
The increased use of telemedicine will have other implications on healthcare real estate decisions as well. Coupled with more wide-scale hybrid work policies, healthcare facilities can also benefit from improved space management strategies. Not as much on-site administrative space is needed at this time. Modifying administrative offices to better accommodate this new work arrangement can reduce overhead. Instead, consider moving to flexible, shared workspaces when it comes to administrative teams.
2. Move to a wider outpatient services model with neighborhood satellite locations.
A recent Deloitte study found that the aggregate share of outpatient services in total hospital revenue jumped from 28% in 1994 to 48% in 2018. As an increasing number of people realize the convenience of visiting a neighborhood outpatient clinic rather than a large healthcare campus downtown, this share will continue to grow. Some estimates put the compound annual growth rate of the global hospitals and outpatient care centers market at 8%, meaning it’ll reach a total of around $5,402 billion in 2023.
As a result, future healthcare real estate strategies should include smaller outpatient satellite locations in close proximity to communities served by the healthcare system. Look for properties conveniently located near major work, residential, and leisure centers. Such locations guarantee both convenience and accessibility for your patients, ensuring greater success of the outpatient clinic.
3. Consider eliminating costly leases by supplementing with mobile health clinics.
Not all healthcare services can be done virtually. Even checkups require in-person visits, and certain populations are still resistant to telemedicine. This presents an opportunity for healthcare systems to explore other care delivery models — namely mobile health clinics and pop-ups that reduce barriers to healthcare access. These off-campus healthcare real estate solutions can offer many services, including flu shots, blood pressure checks, testing, checkups, and so on.
Incorporating this model into a healthcare system provides another opportunity beyond improved accessibility. Healthcare organizations can more easily eliminate vacant or underutilized spaces from their real estate portfolios. However, great care should be taken with this real estate strategy. Emergency and interventional care is still a need, and real estate can be an ongoing source of income. The value of real estate assets might not be as diminished as one might think, so consult with a healthcare real estate professional before making any decisions.
The pandemic has certainly changed many things, but it hasn’t changed the need for in-person care. The future of healthcare real estate just looks a little differently than it did two years ago. Review your real estate portfolio in conjunction with commercial real estate trends, identify where cuts need to be made, and embrace new models of care delivery. Most importantly, consider where telemedicine fits within your healthcare system. It’s here to stay, and it can complement the services you already provide.
Matt Giffune is a co-founder at Occupier, a lease management software platform helping commercial tenants and brokers manage their real estate footprint and comply with lease accounting standards. Occupier’s software ensures alignment between real estate decisions and business successes.