How Affordable Care Act And Millennials Are Changing Healthcare Real Estate
Healthcare commercial real-estate is a unique, subspecialized segment of the entire commercial real-estate industry. According to NAIOP Research Foundation, U.S. nonresidential construction spending in 2016 totaled $455.3 billion. Of this, approximately $41.4 billion (~9%) was spend on healthcare construction.
Strong demand from an aging population in setting of industry consolidation continues to propel the construction of large, consumer-friendly patient care facilities. Colliers International states that in 2016, over 22 million square feet of new healthcare commercial space was delivered, following 14.6 million square feet of deliveries in 2015. Despite a robust supply of new healthcare commercial office space, national vacancy rates, according to Colliers, continue to hit all time lows (7.4% at year-end 2016) with full service gross rents rising by almost 8%.
To better understand these trends, Clineeds, a free online platform designed to connect commercial brokers with healthcare professionals looking for office space, conducted a survey of its users consisting of healthcare professionals, hospital executives, and commercial brokers specializing in healthcare real estate. Over 79 commercial brokers along with 85 healthcare professionals/executives responded either partially or fully to the survey request and provided commentary on several questions.
“As a healthcare real estate tech platform, it’s important for us to understand the trends in the industry,” said Clineed co-founder Rishi Garg. “How are these trends impacting future decisions to construct, purchase or lease commercial office space?”
Here are the results, summarized below:
Retail clinics are on the rise. Cost-effective, convenient care provided at retail clinics has struck a chord with millennials. In an effort to capture this market, healthcare organizations have begun to partner and lease space within traditional retail outlets in lieu of purchasing offices. These leases, unlike traditional commercial leases, are faced with regulations regarding proper use, zoning, biohazard and medical waste. Also at play are issues regarding Starks Law and other anti-kickback regulations, often requiring the additional expertise of a healthcare lawyer.
Commercial office space close to hospitals retain value. Healthcare professionals continue to face declining reimbursement from insurers and government healthcare programs. This has indirectly impacted rent rates of commercial offices near hospitals.
To make up for lost income, physicians have substantially increased their productivity by adding new patients and extending office hours. Medical providers, especially surgeons, overwhelmingly stated they would prefer to rent an office near a hospital and not waste time commuting. As a result, commercial office space near hospitals continue to retain significant value. According to some brokers, in certain areas of New York City and San Francisco, rent may even exceed that of Class A commercial office space. For this reason, hospital executives continue to show a strong willingness to construct commercial space near their facilities with the added benefit of making making millions from services ordered by an affiliate physician. Large healthcare real estate investment trusts (REITs) have also shown a willingness to purchase large offices near medical campuses and hospitals given above market rent rates. Unfortunately, given the size of most transactions, small investors remain outmatched in this market.
Conversions costs remain significant barrier to supply. Transitioning a commercial real estate office to healthcare space are fraught with challenges. This has limited supply of these offices in certain markets. Aside from the myriad of regulations, the build out costs for many physician and dental offices remain significant. Owners and operators of large commercial buildings are hesitant to invest in such projects given the everchanging healthcare landscape.
What’s In Store For 2018?
Recently in an article titled The U.S. Medical Office Market Could Be Heading For A Bubble, David Park, senior SVP of Construction Novant Health, raises the concern of a potential bubble in healthcare commercial market due to a “population lull and changing technology.” Although most respondents failed to agree or disagree with that statement, a resounding concern exist about the impact changes to the ACA (Affordable Care Act) may have on yearly budgets. Short term, many hospital executives stated they may have to re-evaluate FY 2018-2019 capital expenditures, depending upon the costs of implementing new regulations and potentially lost revenue from changes to the ACA.
Although this may disrupt upcoming projects, long-term healthcare executives and commercial brokers continue to remain optimistic and bullish.
“Healthcare real estate is a unique subset of the commercial real estate market, influenced by factors beyond supply and demand. It’s essential that medical professionals partner with brokers knowledgeable in this field, and use specialized data to help them make smart leasing and construction decisions,” added Garg.
This Hospital Is The Highest Ranked In Florida, According To U.S. News & World Report
Baptist Hospital of Miami ranked No. 1 in South Florida and No.6 in the state in the ranks of best hospitals in a new report from U.S. News & World Report.
The nonprofit hospital was one of 12 South Florida hospitals to get a “best” designation, according to the publication’s 2017-18 rankings published Tuesday morning. It was one of four Baptist Health South Florida hospitals in the rankings.
“We are very proud that Baptist Hospital earned the top spot in our area for its commitment to excellence. We share this first-rate recognition with our physicians, nurses and employees, who carry out our mission of providing high-quality, compassionate healthcare to our patients,” said Brian E. Keeley, president and CEO of Baptist Health. “To be honored among the best hospitals locally and in the nation validates that we are meeting and surpassing the high standards we set for our organization and that results in great patient care.”
Nationally, the Mayo Clinic claimed the No. 1 spot for the second year in a row, followed by Cleveland Clinic at No. 2 and Johns Hopkins Hospital at No. 3. The highest ranked hospital in Florida was once again Mayo Clinic Jacksonville in the No. 1 position.
U.S. News releases the rankings to help patients make more informed health care decisions, the publication said in a news release.
Other South Florida hospitals in the 2017-18 U.S. News report and their rankings in Florida are:
– Cleveland Clinic Florida, No. 2 in South Florida and No. 8 in the state.
– Holy Cross Hospital, No. 3 in South Florida and No. 10 in the state.
– University of Miami Hospital, No. 4 in South Florida and No. 12 in the state.
– Memorial Regional Hospital, No. 5 in South Florida and tied for No. 14 in the state.
– Boca Raton Regional Hospital, South Miami Hospital, West Kendall Baptist Hospital tied for No. 6 in South Florida and tied for No. 16 in the state.
– Bethesda Hospital East, Homestead Hospital and Mount Sinai Medical Center tied for No. 9 in South Florida and tied for No. 23 in the state.
– Memorial Hospital West, No. 12 in South Florida and tied for No. 33 in the state.
For the 14th consecutive year, U.S. News & World Report ranked the Bascom Palmer Eye Institute of the University of Miami Health System as the No.1 hospital in the nation for ophthalmology.
“Our patients inspire Bascom Palmer’s superb team of 1,200 doctors, scientists, nurses, ophthalmic technicians and support staff to excel in patient care, vision research, education and surgical innovation,” said Dr. Eduardo C. Alfonso, chairman of Bascom Palmer Eye Institute. “Ensuring personalized, exceptional care for each of our patients is our priority. The fact that ophthalmologists from around the country recognize us as the best in the nation again and again is a great honor.”
Aggressive Action Maximizes Medical Office Lease Value
A healthcare provider’s quest for profitability has become increasingly difficult. But between shrinking revenues and tightening budgets, the last thing a practice wants to consider is an expiring medical office lease. It does so at its own peril, writes Chad Gunter, SVP of healthcare advisory services for Transwestern.
In this commentary for GlobeSt.com, Gunter explains why some aggressive planning, along with a deeper look at the practice, can help make the new lease much less an area for risk.
The ability to control occupancy costs is becoming a pivotal factor in a healthcare provider’s survival. Too many practices ignore a pending lease expiration until it becomes a crisis, gambling that a last-minute search will produce suitable and affordable space. But the stakes are perilously high.
Most physician groups have tightened budget controls to maintain profitability in the face of shrinking revenues. The forces hampering income streams are many, from decreased reimbursements paid for patient care by government programs, to heightened competition pressuring down prices, declining hospital admission rates, and hesitancy by some patients with high insurance deductibles to seek care. Physicians leaving private practices to join large healthcare systems underscore the challenge for practitioners to turn a profit.
Firms that take an aggressive approach to their medical office leasing will enjoy improved financial health by eliminating excess square footage and associated expenses. But they must start early to gain the most benefit.
Begin preparations for a medical office search at least a year before the current lease expires, starting with a self-assessment to identify features in the current space that help or hinder the business. Consider working with an architect experienced in healthcare design or a workplace optimization specialist to plan a cost-effective layout that doesn’t sacrifice function. Look beyond square footage to evaluate how well caregivers and patients are able to move through the space and use specific rooms, fixtures and machines.
Any practice that has been in place for 15 years or more is due for streamlining and modernization: For example, the shift to electronic records, as well as technological advances that have reduced the footprint of imaging machines and other equipment, have slashed space requirements.
Has the client base shifted to a different submarket? What locations would best serve patients?
With a shortlist of suitable spaces, consider tenant-improvement allowances and “overages,” or the expense the tenant must pay to cover the remaining bill for building out shell space for medical use. Will the landlord amortize the tenant’s build-out cost over the life of the lease?
Landlords will often increase the tenant allowance in exchange for additional years added to the lease. Long lease terms provide more predictable occupancy costs, too, with the opportunity to define periodic rent increases and renewal options ahead.
While negotiating term, request separate utility metering. Shared electric bills in a building that contains imaging labs or other high-usage activities increase utility costs for all tenants, so seek billing for actual usage where possible.
Even tenants that begin their search a few months away from a lease maturity shouldn’t lose hope, as favorable leasing options may exist. Some landlords offer turnkey spaces with reception desks, examination rooms and offices ready for use by tenants willing to forego their own finish-out. However, allowing sufficient time to locate, design and build out a space typically yields a better work environment for a healthcare practice, and may well reduce operating expenses in the process.
The views expressed are the author’s own.
The Doctor Is In: Should You Have A Medical Professional On Your Project Team?
The future of the American healthcare system may be uncertain, but employers still have a vested interest in keeping their workers in top shape.
As such, some have taken it upon themselves to make getting adequate care easier — financially and logistically – by providing their employees with free or low-cost medical services at or nearby their office. This goes for construction companies as well, with some setting up temporary clinics at their job sites or hiring healthcare providers to address the range of injuries common among workers in the industry.
Depending on the company, benefits might include standard health screenings, yearly physicals, primary care and physical therapy necessary for a recovering worker’s rehab. Some organizations even extend a variety of such services to their employees’ families.
For example, medical device company Arthrex provides free on-site medical care at each of its locations, and automotive company JM Family Enterprises also makes available a 24/7 medical hotline for its employees, according to Fortune. The goal for these companies and others is to break down the barriers between workers and the healthcare they need by allowing them to view it in a different way.
“Healthcare has been reactive and is now trying to move toward a proactive strategy,” said Scott Goren, director of operations for Mount Laurel, NJ–based Onsite Innovations, a third-party provider of workplace medical service programs and clinics.
A Healthier Job Site
Having medical staff on site, and therefore familiar, could help those uneasy about the prospect of a physical exam feel more comfortable and therefore more likely to schedule a visit.
“When it is convenient and a known and trusted party, you break down a lot of barriers,” Goren said.
There are other benefits. Harvard Medical School researchers noted in a 2015 report that the average doctor’s visit lasts 121 minutes, including travel and wait time, and it costs employees $43 in lost time, which isn’t always compensated. On the flip side is the productivity loss for employers. The study found that only 20 minutes of that 121-minute experience is actually spent in consultation with a physician, so it follows that employers would try to recoup some of that lost time.
As with many enterprise-scale investments, large companies are the ones that will see the payback from having a staffed medical clinic on site, according to Marc Lion, partner at New York City–based accounting and consulting firm Mazars. But those companies shouldn’t expect to make a profit on the clinic. Rather, he said, it serves as an additional benefit for employees, and one that could lead to increased productivity.
State rules governing healthcare also factor in. New York, for example, lets employers own clinic space and equipment, but a licensed physician must own the actual health practice, meaning companies can’t run the clinic themselves, Lion said.
The ability to provide employees with a hassle-free experience, he said, is what makes third-party providers so attractive to many employers.
“There are all sorts of compliance regulations and rules. It’s easy to get caught up or overlook something you need to address. [A company] should engage healthcare professionals who do this often.”
Knowing The Laws
Understanding the rules and regulations is particularly important when treating workers’ compensation injuries, an area of medical practice on which third-party providers like Onsite Innovations focus. For example, Onsite Innovations has a worksite presence on construction projects ranging from $75 million to $25 billion in value, and its staff can treat injured workers or refer them to specialists and then make sure they’re following the medical professional’s orders when they return to the job.
Some states forbid employers from deciding where an employee can seek medical attention for an injury, said Julian Alexander, chairman and CEO of Onsite Physio, a Jacksonville, FL–based provider of worksite wellness services. According to Alexander, the U.S. is almost evenly split between states that allow employer-directed care and those that do not.
The on-site aspect makes physical therapy services like those provided by Onsite Physio attractive to injured employees, Alexander said. The company provides patient services at the workplace, a convenience for those who have returned to the job but still require treatment. It also makes home visits to those whose injuries prevent them from resuming work.
Goren and Alexander each set aside private space for workplace clinics or one-off appointments. And both companies, as must all licensed healthcare providers, comply with state and local health and building regulations, as well as the Health Insurance Portability and Accountability Act (HIPAA), which requires most medical information to be treated as confidential.
Improving Job-Site Training
Even while paying mind to privacy, on-site medical providers are able to share general information based on the injuries they see and suggest updates to a company’s training program or expectations, Alexander said. For example, if the clinic notices a high percentage of similar injuries originating from the loading dock, it could recommend to managers that additional training be offered on lifting correctly. This information could also present an opportunity for the employer to put together a post-job-offer physical testing program to make sure employees can meet the requirements of the position.
Such information also comes in handy during physical therapy. The therapist will review common job tasks with the injured employee and show him or her how to carry out those duties safely, Alexander said. While on the job, the therapist also might take time out to show other employees, who are not currently injured, the safest way to carry out their duties.
Medical professionals working in construction site clinics in particular are positioned to observe employee injuries that might otherwise go unnoticed. “They sometimes don’t want to report [an injury] because they want to continue working,” said Chris Maiello, a division manager for Onsite Innovations.
Being more transparent about workplace injuries and their treatment can benefit the entire project team. “Employer and employee best interests are not mutually exclusive,” Goren said.
Private-Practice Physicians Shift To Groups As Health Care Administrative Burdens Rise
Finding doctors still in private practice is getting harder.
From the way they get paid, to reporting procedures and outcomes, especially for Medicare, more physicians are opting out of running a private family practice to join larger organizations that take care of administrative burdens.
“Why is everybody flocking to bigger organizations? Income guarantees, job security, fixed work hours, and less regulation work. Nobody wants to be an independent physician anymore. Everybody wants to join some place where the hours are good, the pay is good and it’s like a job instead of a profession. That’s a big difference, and I see that happening,” said Keith Chamberlin, president and board chair of Meritage Medical Network Accountable Care Organization, which has about 250 physician members across Marin, Napa, and Sonoma counties.
Ana Pacheco-Clark practices family medicine at Sutter Santa Rosa Regional Hospital. After 17 years of private practice she joined with Sutter Health in 2007, along with three other partners. A fourth partner went to Kaiser Permanente.
“It was getting more and more difficult to deal with all the (technical and administrative) changes. Financially, it was more and more difficult to stay on top of those things, and be able to offer benefits and salaries to staff,” she said.
More recently adding to the headaches, doctors say, is the Medicare Access & Chip Reauthorization act (MACRA). Passed in 2015, it changed the way the U.S. evaluates and pays for health care. The law does many things including establishing new ways to pay physicians for Medicare patients.
Two-thirds of health care providers (64 percent) report that they feel “unprepared” for managing and executing MACRA initiatives, according to a survey from Pittsburgh-based Stoltenberg Consulting Inc., a healthcare information technology consulting firm.
Marcy Norenius is director of strategy, network, and growth at Meritage. She fields questions every day from doctors about the reporting requirements.
“I have this same conversation over and over and over because it’s confusing. It’s overwhelming,” she said.
From 2013 to 2015, the number of physicians in groups of less than 10 dropped from 40 percent to 35 percent in the U.S., while the proportion of physicians practicing in groups of more than 100 grew from 30 percent to 35 percent, according to the Healthcare Financial Management Association, a membership organization for health care finance leaders.
The migration to larger practices was greater among primary care physicians than specialists.
From 2012-2015, 32,000 physician practices were acquired by hospital/health systems, an increase of 86 percent, according to a study by Physicians Advocacy Institute, a nonprofit health care advocacy organization, and Avalere Health, a healthcare consulting firm.
Medicare Reimbursement Changes
MACRA is shifting from a fee-for-service payment system that pays doctors according to the number of services provided, to a “value-based system that rewards improved healthcare outcomes,” according to the Centers for Medicare and Medicaid Services (CMS).
Those changes, which bring more reporting for doctors, went into effect Jan. 1, and the program will evolve over the next few years.
“The size of your payment adjustment will depend both on how much data you submit and your quality results. Medicare payments will be adjusted up, down, or not at all,” the CMS states.
The Quality Payment Program, as it is called, is the latest in a series of steps the CMS said it has taken to incentivize quality of care over quantity.
That’s a problem, said Meritage executive Chamberlin.
“How do you define value and quality? Is it always seeing the doctor or is it OK to see the nurse practitioner? Are you getting every test in the book or is it ok to get a couple? This is where a lot of argument comes in,” he said.
And, how do you report quality metrics to the government?
“It’s the worst thing (for a doctor) to have to report a gazillion things. This is one of the things that’s going to drive people out of private practice. That alone, in time and expense (of all the reporting) can kill a practice,” Chamberlin said.
Curtis Robinson has had a primary care practice in Mill Valley since 2005. The trend of doctors joining larger groups can be traced back to 1945 and the formation of Kaiser Permanente, he said, but the acceleration now can be attributed at least in part because of external pressure and expectations from the government.
“Many levels of reporting (to the government) and (new) technology are interfering with everyday life,” Robinson said.
One set of Medicare reporting, the Merit-Based Incentive Payment System (MIPS), will take him three full business days to complete, he said.
“And that’s just on one issue.”
Doctors work long hours and have a lot of responsibility, and piling more work on them takes them away from their primary duty — their patients, he said.
“Administrations and the government add work without the best intention of the physician,” he said. “They need to put the physician first.”
This South Florida Hospital Is Among The Most Efficient In Using Tech To Deliver Care, Cut Costs
A recent survey of the most technology-advanced hospital in the United States recognized Nicklaus Children’s Hospital as one of the “most wired” in the nation.
The 19th annual survey by the American Hospital Association’s Health Forum recognized the U.S. facilities that are taking the most advantage of tech and innovation to deliver care to patients.
“Most Wired” hospitals are using smartphones, telehealth and remote monitoring tools to create more ways for patients to access services and for administrators to gather information, according to the survey.
“The Most Wired hospital … are investing in new delivery models in order to improve quality, provide access and control costs,” said AHA president and CEO Rick Pollack.
For one, Miami Children’s Health System, the parent organization of Nicklaus Children’s Hospital, announced in April that it will build on its existing telehealth platform MCH Anywhere through a partnership with TytoCare, a New York City-based startup.
The deal aims to improve care delivered by doctors within the Miami Children’s health system, particularly when it comes to post-operative patients or those with complex or more acute medical needs and conditions.
“We believe [telehealth] can dramatically improve the quality of our care and extend our reach beyond our facilities,” said Edward Martinez, senior vice president and chief information officer of Miami Children’s Health System.
Cleveland Clinic’s Wish List: More PBC Patients, Perhaps A Hospital
While Cleveland Clinic Florida is opening a Wellington office, it’s reportedly close to renewing a lease for its fancy medical offices at CityPlace Tower in West Palm Beach.
And the world-class medical provider is wishful about having a hospital presence in Palm Beach County — either through an affiliation with an existing hospital or by building its own facility.
“There are many areas that are growing out to the west that are underrepresented, from a hospital perspective,” said Dr. Wael Barsoum, president of Cleveland Clinic Florida, based in Weston. “So I do think there will be an opportunity to consider putting inpatient beds in that area — and in the northern area of the county.”
Cleveland Clinic isn’t planning to build a Palm Beach County hospital right now, though, especially since the regulatory hurdles are so high.
Instead, it’s focused on a plan to open medical offices in Wellington.
Nonetheless, the medical provider’s expansion isn’t exactly appreciated by Palm Beach County hospitals that have worked to boost the quality and sophistication of patient care.
During the past five years, Robbin Lee, chief executive of Wellington Regional Medical Center, said, Wellington’s care has become so strong, patients no longer need to travel to Miami — or the airport — for their health care needs.
They also shouldn’t be directed to the Cleveland Clinic’s Weston hospital by Cleveland Clinic doctors poaching patients, said Lee, a former ER nurse.
“For (Cleveland Clinic) to come in and say they are going to take patients down to Broward is disrespectful to our physicians,” Lee said of Cleveland Clinic. “It implies all their hard work is not valued. It’s disruption.”
And so it goes in the battle to win the hearts and wallets of Palm Beach County patients.
For the past decade, the county has become popular with out-of-area medical providers eager to gain a toehold in the market.
With Palm Beach County’s aging, wealthy and insured Baby Boomer population, plus the trend toward bringing medical care closer to patients, local and out-of-state medical centers are expanding their presence.
Some are opening up clinic offices, while others are forming partnerships with county-based hospitals that want the cachet and capital of larger players.
Two New York-based providers, Mount Sinai of New York and NYU Langone, are establishing medical offices in West Palm Beach, conveniently across the bridge from wealthy Palm Beach patients.
(Mount Sinai has a partnership with Jupiter Medical Center, a relationship that’s expanding through the soon-to-open West Palm Beach office.)
South Florida players are teaming up, too.
Baptist Health South Florida of Miami-Dade County signed an agreement to merge with Bethesda Health, which has two hospitals in Boynton Beach. The merger, first announced in 2015, is set to be completed on Sept. 30.
Meanwhile, Boca Raton Boca Raton Regional Hospital announced it has embarked on a process of finding a “strategic partnership” with another health care provider.
Cleveland Clinic’s Barsoum said an affiliation with Boca Raton Regional “could be complementary,” but he said there aren’t any talks going on.
Right now, Cleveland Clinic Florida just wants more of the Palm Beach County patient market population. Cleveland Clinic treats patients at medical offices throughout the county, and it handles their in-patient hospitalizations at the mother ship, the Weston hospital.
In 2007, Cleveland Clinic Florida was the first out-of-area medical provider to establish offices in Palm Beach County, opening offices in downtown West Palm Beach. Through the years, it has expanded services and treated a growing roster of patients.
It’s also reaped financial contributions from grateful patients, especially those living in Palm Beach.
Today, Cleveland Clinic has offices at CityPlace Tower and Palm Beach Lakes Boulevard in West Palm Beach, in Palm Beach Gardens and soon, in Wellington.
The Wellington office, in the works for a year, will be in the Village Green Center, at the corner of Stribling Way and State Road 7. The office will feature primary care, gastroenterology, cardiology and other services.
The Cleveland Clinic office is an affront to Lee, who said Palm Beach County hospitals work closely with each other to provide quality patient care.
“They want to put cardiologists and GI doctors here? There’s no need,” Lee said.”There are three GI groups that have been here for years and they are well-respected.”
Lee knows that Wellington Regional is sitting in the catbird seat, east of communities where thousands of homes will be built during the coming decade. Thus, she doesn’t even think of Wellington as western Palm Beach County.
“Wellington sits in central Palm Beach County now,” she said.
During her nearly five years at the medical center, Lee has worked to boost the quality and complexity of services. The hospital has a comprehensive stroke center, lung program, chest resuscitation center and neurointerventional lab, among other services.
The hospital also has an entire program created to treat the polo players who flock to Wellington annually. Player injuries require the services of orthopedic surgeons and other surgeons, plus concussion management, she said.
The hospital is adding more intensive care beds and considering additional growth, including building two more floors on a wing of the hospital, Lee said.
But Cleveland Clinic’s Barsoum still sees potential need in the area.
With the trend in medicine toward convenience, patients at Cleveland Clinic’s Palm Beach County medical offices probably wouldn’t mind having a close-by hospital for some inpatient services.
Barsoum said a “micro-hospital” could fill a need for inpatient care that isn’t complex. Micro-hospitals, featuring from 25 to 50 beds, are for patients who need hospitalization for less severe matters.
This type of hospital differs from hospitals such as Cleveland Clinic’s Weston facility, which sees complex cases. In fact, Weston is adding more critical care beds to meet demand, which means it often treats the sickest patients in the region. For them there are organ transplants, cardiac surgery, cancer treatment and neurosurgical care, among other specialties.
Barsoum said Cleveland Clinic hasn’t done enough research to consider what type of hospital could be suitable for Palm Beach County, if it decided it was interested in building one.
But Barsoum isn’t shy about touting Cleveland Clinic, which he said is enough of a draw that yes, Palm Beach County patients do travel to Weston, where the entire experience is informed by the Ohio headquarter’s renowned reputation.
“(Patients) expect a level of care that is extremely high,” Barsoum said, invoking the Ritz-Carlton hotel brand as an example of stellar service. “It shouldn’t be any different in health care.”
Source: Palm Beach Post
Jackson Health System Facing ‘Most Challenging’ Year
Coming off a successful year that saw many advances, and with Carlos Migoya set to continue as president and CEO of Jackson Health System, officials of Miami’s Public Health Trust are cautiously optimistic about the future. The trust administers Jackson Health System, which includes Jackson Memorial Hospital and a network of clinics.
“Every year we come here and every year it has improved,” Joe Arriola, trust chairman, told Miami-Dade’s County Commission. “Jackson is better than it has ever been. There have been some exceptional changes, and we’re here with some incredible news: I am happy to say that Carlos Migoya has agreed to stay on for another two years.”
But “we are heading into rough times politically, and the squabbling is just going to get worse. To survive this, we need your help,” Mr. Arriola told commissioners.
“This has been one of the proudest chapters of my life,” Mr. Migoya said. “We have new facilities and are renovating patient care facilities across the system.”
The $175 million Christine Lynn Rehabilitation Center, set to open in 2019 or 2020, is the first project in which Jackson, the University of Miami and the Miami Project to Cure Paralysis have combined their resources in a single facility, he said.
“Research will be actively integrated into patient care, and it will be one of the most sought-after places in the country to recover from an injury,” Mr. Migoya said. “This positions Jackson and UM in a landmark treatment center.” Two old administration buildings will be torn down to accommodate the center, he added.
Jackson West, an inpatient hospital with outpatient and diagnostic clinics, is set to open in mid-2019, he said.
“This is in Doral, the fastest-growing area of the county, and we’ll be able to provide services to that population.” A separate walk-in care center will be six miles away, but also in Doral, he said.
Though he didn’t discuss the upcoming budget with commissioners, Mr. Migoya categorized it as break-even. The ever-rising cost of prescription drugs, salary costs to stay competitive, pressure from insurance companies to lower reimbursement rates, and the uncertainty of national health insurance are among the reasons, he said.
“I expect the coming year to be the most challenging since 2011,” Mr. Migoya said. “We’re getting ready to open new facilities, and doing it amidst storm clouds hanging over health care.
“We’re improving efficiencies and streamlining costs in non-clinical areas,” he said. “Labor and management are in partnership to identify ways to upgrade the patient experience.”
“What’s the plan” for survival? asked Commissioner Daniella Levine Cava. “The State Legislature came back with some dedicated funds, but not at the same level as before.”
“It depends on what the funding is,” Mr. Migoya said. “Every year for the past seven years, we’ve had cuts; last year it was $60 million.” Leaders in the Florida House of Representatives reduced the cut to $19 million.
“But the brand has changed,” he said. “Now, paying patients choose us, and we’re improving efficiencies to get patients home sooner, safely. The key to growth is to turn beds fast, and we want to do that so we can offer more access to everyone in the county.”
Assuming the US Senate passes a healthcare bill, “How much time will you need to know the economic hit?” asked Commissioner Sally Heyman.
“We could end up with some positives,” Mr. Migoya said. Florida turned down the expansion of Medicaid that was part of the Affordable Care Act. “The states that expanded Medicaid could take a worse hit. And some in government are looking for ways to help Florida.”
Source: Miami Today
Partnering On A Post-Occupancy Evaluation To Assess A Building’s Performance
A post-occupancy evaluation (POE) gathers feedback from facility users to assess how well a building is performing. This evaluation is typically conducted about a year after occupancy and can be used for many purposes, including fine-tuning the facility to increase performance or evaluating the design to inform a new facility. Architects are aware of these benefits, but often struggle to justify the additional cost of conducting one to a client after the project is complete. The costs can be significant if an independent research consultant is involved, which is recommended because researchers can offer standardized, reliable methodologies and eliminate any design team bias.
These circumstances make it difficult for smaller healthcare organizations, which have neither the budget nor the resources for research consultants, to conduct a POE. Recently, Vision 3 Architects (Providence, R.I.) identified a practical and affordable solution to that problem by partnering with students from Roger Williams University’s School of Architecture, Art and Historic Preservation in Bristol, R.I. Together, the team completed one-year POEs for two facilities designed by Vision 3 Architects for Thundermist Health Center. The students served as the research team and helped to guide a future project design based on their findings.
Thundermist Health Center, a community health organization based in Warwick, R.I., provides medical and dental care and health-related social services to low- and moderate-income patients throughout the state. In 2013, Vision 3 and Thundermist began working on the design for the Thundermist Health Center of South County in Wakefield, R.I. The team had previously worked together on the design of a clinic in West Warwick, R.I., which opened in 2011 featuring patient-centered design concepts, including three pods of exam rooms, consultation rooms, and meeting spaces designed around central collaborative team areas.
Before diving into the design of the South County project, Thundermist leaders wanted to evaluate the results of the patient-centered design features in West Warwick to see what was working and what needed improvement. For example, they wanted to revisit the location and quantity of the staff team rooms and how many exam rooms a support team could handle. The team also wanted to see how the existing layouts were affecting patient visibility and staff privacy.
To achieve that, Vision 3 reached out to the university, which was offering a graduate course titled “Environmental Design Research.” The timing worked out well, as the semester was just starting and the professor was looking to partner with an architectural firm that had worked on some local healthcare projects and had a client that would allow students to research their facility. Vision 3 and Thundermist agreed to meet with the students to discuss the project and to provide access to the building to photograph, observe, and conduct interviews, and the students would provide precedent studies and research articles and analyze how the building design performed against the original design goals. Their final exam would be a class presentation of their findings.
The process, including the POE, data evaluations, and final presentation to the team, took place within one semester. The entire team, including the architecture firm, was given a link to the spreadsheet data to review the progress. The class of 16 students had monthly meetings with the design team at the facility, Vision 3’s office, or on campus. They weren’t paid but gained valuable experience and contacts working with a local architecture firm, and, in exchange, provided the client with unbiased feedback on the performance of its building. The professor met weekly with the students, closely monitoring the interview process and data evaluation, and incorporating lessons on the principals of evidence-based design and the role that research plays to validate design decisions.
The students spent about eight weeks observing and interviewing the staff, patients, and visitors using photo elicitation and a standardized interview document and format that was developed and monitored by their professor. The POE looked at different elements of the building in terms of the patient experience. One area of interest was the waiting room design, including acoustics, the check-in and check-out processes, and the layout of reception desks, which placed the staff at high desks instead of behind sliding glass windows.
In general, patients responded favorably to the waiting room, finding the aesthetics and natural light welcoming and the seating comfortable. They also liked the staff greeting them at eye level at the reception desk without a glass window. However, patients reported that they had a difficult time understanding where to stand or line up for the check-in/out process. The staff also suggested that the acoustics of the waiting room could be improved to protect patient privacy and to manage the overall noise level of the space.
In the clinical areas, the POE looked at how the number of medical staff members sharing team rooms affected privacy. The staff said they enjoyed sharing a team area and felt that overall patient care was improved by their collaboration. But the team area, which contained 12 staff members, was often too loud, so they suggested limiting the size of the staff areas to eight people in future designs and implementing a system for asking the room to “quiet down.” And while they liked having the team room central and surrounded by exam rooms, they felt they didn’t have enough access to daylight.
The size and layout of West Warwick’s exam rooms received universally positive responses. Each exam room contained a mobile supply cart that was docked below the countertop, adjacent to the hand sink. The staff liked that the supplies were tucked away when not needed but could be brought directly to the exam table when necessary and that the top of the cart could serve as another countertop. The laptop in the exam room was also stored on a mobile, height-adjustable cart, which allowed physicians access to their laptops while facing patients and could be moved out of the way when not needed. Based on this feedback, the design was duplicated exactly for South County’s exam rooms.
Additionally, the POE of West Warwick studied the facility’s community room, which is used to hold meetings and classes for the staff and patients. The organization wanted to better understand how the space was being used and if this feature was an asset and should be included at the South County facility. West Warwick’s community room earned positive feedback, with respondents reporting that the layout of the room allows for flexibility and the room’s operable partitions enable the room to be divided into multiple spaces to support simultaneous functions. A kitchen in the community room is used for patient education cooking classes and the local community was utilizing the room after hours for local meetings and events.
Informing Design Decisions
Based on the results of the POE performed on the West Warwick location, the Vision 3 design team made several important changes to the design of the South County facility, which opened in 2015. For example, in the waiting room, the reception desk was redesigned to be closer to the main entrance for staff to greet patients directly upon entering the facility and to avoid any patient confusion over the check-in process. The waiting room seating was also relocated to be adjacent to the exterior wall to provide access to natural light and views outdoor. Acoustics were addressed by adding carpeting, upholstered furniture, and acoustic ceiling tiles.
For the staff spaces, Thundermist took the lessons from the POE to redesign the central staff team area to feature four six-person team pods with five examination rooms in each pod. The team staff rooms were relocated to exterior walls to provide outdoor views and natural lighting and are adjacent to that staff’s pod of exam rooms. The layout of the team rooms was also adjusted so that the work areas face the walls for greater staff privacy and a wall cabinet for personal storage was added above each desk. For the corridors connecting the team areas with the exam rooms, patterned glass windows were added to improve access to natural lighting in the corridors and create a visual connection between the team and the exam rooms. Due to the success of the community room in West Warwick, Thundermist included a community room in the design for South County, with a similar room size, operable partition, and kitchen.
In mid-2016, Roger Williams University students produced another POE for Thundermist—this time on the completed South County facility—finding that many of the changes were working successfully. For example, in the waiting area, patient seating, which was arranged in both small and large groupings adjacent to the exterior walls, was providing access to natural light and outdoor views. The location of the reception desk near the entrance was also working well with patients experiencing minimal confusion about where to check-in. However, the acoustics were still a concern, so Thundermist installed a white noise system.
In the staff team pods, the proximity of team areas to examination rooms saved time and steps. Staff enjoyed the improved access to natural lighting and outside views in the room, and the patterned glass partitions between staff areas and the corridors worked well in allowing more natural light into the corridors, while also protecting the privacy of the staff work areas.
Throughout this process, we’ve learned some valuable lessons on conducting a POE. Thundermist and the university worked closely to make sure that facility operations were not adversely impacted by the students’ presence. The initial group tours and building photography took place in off-hours. To encourage participation in the POE, the staff was invited to meet with the students during lunch breaks, while patients were given a hand-out, with photos of the students, that explained the process and informed them that their 15-minute interview would be kept anonymous.
It’s critical that whoever is leading the process—whether a professor or a design team—sets the standards for the research documentation. In these POEs, the interview forms the students used were critically reviewed and trial tested. After the interviews were complete, the students entered the data into a spreadsheet, which included the gender, age range, whether the person was a patient or staff member, the room or space discussed, their frequency visiting that area, the date, the length of interview, and the feedback on the specific space. The team discussed the results, and at the end of the semester, the students presented their findings back to the design team and Thundermist.
Vision 3 plans to continue to serve as an architect sponsor to the Roger Williams University Environmental Design Research class and has recommended the university as an affordable means to provide POEs for other community health center clients. Vision 3 and Thundermist are now redesigning the first Thundermist Health Center in Woonsocket, R.I., which opened in 2005, using many of the lessons learned from these POEs to greatly inform the project. Roger Williams University students will likely perform a POE for the Woonsocket facility a year after it opens. We would recommend that design firms contact their local architecture school and discuss how they can form a relationship that benefits both parties.
Source: Healthcare Design
Aging Population Shaping Health Care Real Estate
The aging population and the unknown future of policies are shifting the way health care organizations think about real estate.
National real estate firm JLL recently completed research on the health care industry and how organizations approach real estate with the changing landscape.
JLL Senior Vice President of Health Care Paul Heiserman said it would be impossible to talk about real estate in health care without first acknowledging the growing need to service the baby-boomer bubble, as well as the increasing costs from more advanced services and pharmaceuticals.
“Better services but not cheaper services,” said Heiserman, who is based in Columbus, Ohio. “That’s driving up prices that are really unsustainable.”
Heiserman said employers used to be more willing to take on the full burden of health care costs for their employees, but with the rising prices, the responsibility is shifting some to the patients.
The shift in payment responsibility is causing some pinches at the health care provider level and shifting the focus on where the importance of health care lies, Heiserman said.
A greater importance is being placed on reducing per capita cost, improving the overall population health and improving the overall patient experience, he said.
“Those three slices are driving a lot of what we’re seeing in the health care industry in terms of real estate,” Heiserman said.
JLL’s research concluded with five main trends in health care real estate: building room for change; optimizing their existing real estate; putting convenience first; smarter site selection based on demographics, including the placement of outpatient surgical centers; and advanced management to mitigate risks of more locations.
The trends are ways health care systems are looking to improve patient care while lowering costs, Heiserman said.
The way health care systems value patients is changing, Heiserman said. Where hospitals used to make more money by having more patients in beds, there’s now an added focus on preventive care to keep patients out of acute care, he said.
The change in philosophy is adding to the first trend, which is designing health care space to flexibility.
“We have a major shift right now, and we’re not sure where it shakes out,” he said. “You can’t count on a facility to be a static use for 20, 30 years. Design it in a way it can be converted to something else. In 20 years, what is an emergency room now might be required to be something else.”
Heiserman mentioned a health care client in another region looking to optimize its lab space. The client currently has three labs spread across different locations, not fully optimizing space.
The opportunity to consolidate lab space and eliminate duplicate real estate uses is another trend seen in the industry, Heiserman said. He said in the past, health care organizations often would grow for the sake of growth.
“They would grow whichever way made the most sense,” he said. “That worked well when there wasn’t pricing pressure. Now, it doesn’t make as much sense.”
More health care organizations nationwide are beginning to follow Fortune 500 companies in the way real estate operations are tracked and organized, he said.
“Hospitals aren’t cutting edge,” he said. “When we talk about optimization, now they’re beginning to look at operations and where they make sense. A lot of hospitals are moving administration into less expensive spaces off campus.
“The highest and best use is not administrative use.”
Another trend in health care is the location of services to more convenient locations for patients, Heiserman said.
Service convenience is being seen in Grand Rapids, said Jeff Karger, JLL senior vice president of brokerage in Grand Rapids. He pointed to Spectrum Health opening clinical space in Grand Haven and on East Beltline.
“They’re bringing it back toward the consumer, versus the acute area downtown,” Karger said. “It puts convenience first, so it encourages the patient to participate more.”
To establish those locations, health care systems are turning toward more detailed analytics to discover what move makes the most sense. The analytics are similar to how national retailers might select their next site, Karger said.
Prior to costs rising significantly, health care systems really didn’t have a need to be super selective in their next site, Heiserman said.
“Hospitals operate independently and tend not to go into other regions and tend to be very large and powerful within their community,” he said. “Hospitals were working on an island for many years and maybe didn’t have the need for increasing sophistication, but now with the pressure, they need to sophisticate to increase efficiency.”
The need for efficiency is driven by the growing competitive nature of health care, Heiserman said. Systems must be able to attract a set of patients more capable of paying so they can in turn offer cheaper services to treat a greater population.
“We’re in a largely competitive environment; most markets have quite a bit of competition, and there’s an element of trying to protect but also gain market share,” Heiserman said. “Particularly, market share that pays well, so the hospital can provide better service.”
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