Jupiter Medical Center Launches Telemedicine Platform
As technology continues to penetrate the business of health care, more hospitals and physician groups are working to adopt and modernize their practices, introducing features such as telemedicine to offer convenience.
Jupiter Medical Center, a not-for-profit institution with capacity to treat more than 500 patients at a time, is the latest organization to launch an online platform to treat patients remotely – think Skype, but for when someone needs help with a sudden cold or rash.
The regional hospital announced Monday the launch of Care Anywhere, a private remote-access platform that can be downloaded on both Apple and Android app stores and accessed via desktop, tablet or smartphone.
“In today’s busy world, there are times when getting to the doctor’s office just isn’t possible – either it is after office hours or you’re simply unable to make the trip,” said Judy Magalhaes, Jupiter Medical Center’s VP of Ambulatory Services.
Founded in 1979, Jupiter Medical Center has about 1,600 team members, 615 physicians and 640 volunteers. The hospital has the capacity to treat more than 300 patients simultaneously on-site, in addition to offering care at three urgent care facilities. The debut of Care Anywhere is the latest, and most tech-oriented, move by the hospital to be more accessible.
Miami Children’s Health System followed a similar route in April with the launch of MCH Anywhere.
The telehealth market is projected to be worth more than $38 billion by 2022, while a consumer survey found that seven out of 10 patients are comfortable with seeing their doctor virtually, instead of in person. Meanwhile, more than 25 states have passed bills requiring insurance companies to cover telehealth appointments.
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.
Tough Times For Healthcare Design And Construction, But Projects Are Doable
In some ways, designing and building healthcare facilities is almost as challenging as keeping the systems running efficiently and effectively, according to the speakers at our recent Seattle Healthcare event. Making projects pencil and providing the best possible design once they do are certainly no easy tasks in a time when uncertainty is the new norm in the healthcare industry.
Right out of the gate, our Healthcare Paradigms panelists took up the question: What is having the largest impact on healthcare design and construction?
In Seattle, California and other markets, construction costs are climbing — mostly because of the cost of labor, the speakers said. Subcontractors can be selective about the projects they undertake. That is a complete turnaround from seven or eight years ago.
It is good that Seattle is a booming market, but that puts even more pressure on developers to contain construction costs. For developers and designers of healthcare facilities, that is especially true, since healthcare space is so specialized and its construction is more labor-intensive than other property types.
Some of the projects on the books do not pencil anymore, the speakers said. No one is going to pursue a project with negative return on investment, certainly not hospital organizations. Some of the healthcare developments that might have made sense only two or three years ago are on hold.
New projects will be built in the Seattle area. The demand is there, and developers will find ways to provide supply. But that is really only the beginning of the challenge.
The way facilities are built influences the way service is provided in healthcare, the speakers said. Newer designs will encourage a more collaborative atmosphere among the healthcare professionals who work there. But that is going to be hard to replicate in legacy facilities still in use, because healthcare facilities are hard to change once they are built, unless flexibility is built into the structure.
There is disagreement about what flexibility means in a healthcare setting, and whether it is even possible to use flexibility to future-proof a healthcare facility. There is also the question of how design can promote efficiencies, because providing care to patients in the most efficient way possible, without compromising the quality of care, is of the utmost urgency considering the current economics of healthcare.
Even a facility’s finishes — the way it looks and feels to patients — has a profound impact on healthcare delivery. A facility that feels harsh and unfriendly has a negative impact. It makes patients feel more anxious at a time when they need to be less anxious, and that complicates their interactions with healthcare providers, often for the worse.
Also, healthcare specialists need to design facilities to take care of the staff who work there. They need to be comfortable in their surroundings, or patient care will suffer.
The speakers on our Providers Perspective panel offered their take on providing healthcare in the current climate. The short answer: tough but doable, especially for healthcare systems always looking to provide better patient-centric care.
Virginia Mason Medical Center President Suzanne Anderson said Virginia Mason has established very aggressive goals regarding patient experience and quality of care in recent decades. She said the health system will focus on doing healthcare differently, constantly evaluating its processes to find areas to improve care, which is at the heart of the Virginia Mason Production System, a process for patient care modeled after the Toyota Production System.
The system extends to all of the Virginia Mason facilities. That includes the hospital of that name, a network of regional medical centers in the Seattle area, and the Virginia Mason Institute, providing training for the Virginia Mason Production System.
Swedish Health Services CEO R. Guy Hudson said it is important that patients receive the same high-quality care wherever they enter the system. One goal is to keep people out of the hospital by focusing on primary care and wellness and prevention. One of the system’s main strategic objectives, he said, is lowering the overall cost of care.
Swedish Health Services has five hospitals, two freestanding emergency departments, and more than 180 primary and specialty clinics throughout the Puget Sound.
The economics of healthcare is challenging, both speakers said. Of special concern right now is the possibility that the expansion of Medicaid under the Affordable Care Act will be rolled back. People newly covered in recent years will be out of the system again, and less likely to access preventive care, and thus cost the system more when they become very sick and seek treatment at emergency rooms.
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
Cap Rates Drop As Competition For Medical Office Buildings Heat Up
When Physicians Realty Trust announced a purchase of 18 medical office facilities located in eight states for about $735 million last month, the Milwaukee-based REIT didn’t just sweep up prime properties. It won a round in the business of investing in medical office buildings (MOBs), which has become increasingly competitive.
The pending purchase includes the Baylor Cancer Center in Dallas, Texas. In a statement, executives with Physicians Realty described it as an on-campus medical office building consisting of about 458,396 net leasable sq. ft. At a purchase price of $290 million and after closing, the unlevered cash yield is expected to be 4.7 percent.
The intense vying for urgent care centers, surgery centers and other outpatient medical facilities is also driving down cap rates in the sector. Cap rates on MOBs tightened to 6.5 percent in the fourth quarter of 2016, after holding steady at 6.7 percent for the three previous quarters, according to the latest information from Revista, an Arnold, Md.-based property research firm that examines all out-patient medical properties. In its cap rate report, Revista examines a relatively small sampling of four transactions in four quartiles.
Its analysis found that tightening occurred for almost all segments of the market. Among the deals with the lowest reported cap rates in the fourth quarter of 2016, cap rates averaged 4.2 percent, down from 4.4 percent the quarter prior and 4.7 percent the year prior. On transactions in the 25th percentile, with the highest cap rates, cap rates averaged 7.0 percent, flat with the quarter prior. Median cap rates averaged 6.4 percent, down from 6.6 percent the quarter before.
The tightening is an indication of keen interest among domestic and international investors, all vying for purchase opportunities that seem too scarce.
“There has been a lot of demand,” says Hilda Martin, a principal at Revista. “A lot of new investment groups are entering the sector. There is more demand for less and less opportunity, and it’s just very competitive out there now.”
The Private Equity Gaze
Private equity firms are a relatively new investor group that has been particularly eager to scoop up quality MOBs, according to Martin.
“They have historically been running at the $1 billion a year mark in acquisitions,” Martin says. “That has bumped up to $5 billion on an annual basis more recently. There is more interest—and they are not selling as much as they are buying.”
The recent upturn has been in place for about 12 to 18 months, Martin estimates. The interest among those companies is even prompting private equity firms to extend hold periods beyond the customary seven or eight years. The firms are drawn to the medical sector because it is a very stable segment. Medical practices tend to sign long-term leases and have stable occupancy and vacancy rates, too.
Private equity groups are not the only investor group circling the segment. Virtually all institutional investors, REITs, private capital investors and developers recently surveyed by real estate services CBRE indicated that MOBs meet their acquisition criteria, with 97 percent saying they preferred the property type.
The CBRE U.S. Healthcare Capital Markets 2017 Investor & Developer Survey was sent to investors and developers and received 91 total responses. Respondents indicated that:
-Their firms had allocated $14.9 billion in equity to healthcare real estate investment and development for 2017.
The market cap rate for MOBs falls between 6.0 percent and 6.5 percent, according to 39 percent of respondents, making it the most aggressively priced property type.
-They are in the market to be net buyers, according to 78 percent of respondents.
-About 27 percent of investors and developers require a minimum ground lease of 60-29 years for an investment.
-As for how cap rates are expected to move in the sector, the experts see more competition—and potential compression—ahead.
“A lot of companies are looking for sweet off-market deals that no one knows about,” Martin says. “That tends to be the sentiment when people are calling up, ‘Where can I find the opportunity?’”
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