Medical office real estate has emerged as a significant and robust subclass of office real estate. (The category can be very broad and include everything from a hospital facility to a chiropractic office.) There’s been exponential growth in this market segment in recent years, and current demographic trends indicate that the growth trend will continue for decades to come. An aging population, coupled with the mass retirement of the baby boomers, will presumably spur demand for medical services required by that
population. Simply put: demand for those services creates demand for the real estate that houses them. Hence the rise of medical office space. This apparent demand has also made medical office space a preferred product type for investment buyers who anticipate consistent and certain income in the foreseeable future.
However, within this generally positive outlook for medical office space, there are some tones of unpredictability.
First, there’s the ongoing possibility that the Affordable Care Act may be altered, or completely overhauled, or completely scrapped, which would cause some unpredictability in certain medical practices’ revenue model.
Additionally, we have been in, and likely will continue to be in, a massive shift toward consolidation of larger medical practices and organizations, along with their corresponding facilities. The small one- and two-physician practices that existed for many years are being displaced by large practices with multiple physicians. As a result, medical space that is geared towards smaller practices may see greatly diminished demand if it can’t adapt to facilities able to accommodate large occupants.
Another factor impacting medical space and its location is the patient’s preferences as to where they obtain their services. Generally, medical space is located in two geographic distinctions:
On-campus space — meaning on a hospital campus, where a patient may be traveling some distance from their home or workplace but is visiting their provider on a campus with other specialties and ancillary services present, both inpatient and outpatient.
Community setting — meaning a clinic or outpatient facility that’s located in a community-based setting, amongst rooftops, and geared to be convenient for the patient. Usually, these are a short distance from a patient’s home or workplace.
The consumer trends in recent years have demanded convenience, sometimes in the form of “convenient care” clinics located in the community retail setting. The future may require services to become even more convenient to the consumer. There’s some chatter in the industry of clinicians practicing inside of grocery stores and pharmacies such as Walgreens and CVS. Should the industry respond and accommodate that consumer preference, it could redirect demand from on-campus space and other large clinical facilities into community-based medicine that blurs the line between clinical and retail space.
On a local level, the medical industry, and the corresponding real estate that serves it, has thrived. Columbia now has several hospital campuses and significant specialty facilities that have made our community a regional draw for health care services. This is among the reasons that the recession didn’t hit Columbia with the same ferocity it hit other communities, and we recognize that to the point that “medical tourism” is now being focused on as an asset that we’ll attempt to nurture in the future. If we’re successful, our community will see robust economic growth as a result. And I believe that will translate to high occupancy rates at both on-campus and community-based clinics.
Source: CBT

ECRI Institute has revealed its annual “Top 10 Hospital C-Suite Watch List,” which seeks to provide healthcare leaders with information on emerging innovations.
Here are the ideas, technologies and devices that made this year’s report.
An app for addiction. Pear Therapeutics’ FDA-approved reSET app topped the list. Intended to be used with outpatient therapy, it’s aimed at treating substance use disorders spanning alcohol, cocaine, marijuana and stimulants.
Direct-to-consumer genetic testing. DTC genetic tests will have an impact on how hospitals and health systems interact with patients. But as the report notes, “the exact role of DTC genetic tests in healthcare is still evolving and may vary by the information that individual tests collect.”
Acuity-adaptable rooms. As healthcare becomes more and more patient-centric, hospitals have been experimenting with a model in which they keep a patient in the same room from admission to discharge, no matter their acuity level. Challenges of this model include staffing and workflow issues.
An insertable cardiac monitor. Abbott Laboratories’ Confirm Rx Insertable Cardiac Monitor is an implantable cardiac monitor. It connects to a patient’s smartphone via Bluetooth and transmits information to the physician.
VR for pediatric patients. Numerous companies and hospitals have been developing virtual reality software to help kids be comforted in healthcare-related situations, such as repeated needle injections. However, experts have cautioned against overhyping the capabilities of VR.
A non-invasive device for treating Alzheimer’s. Neuronix’s NeuroAD Therapy System reportedly combines non-invasive transcranial magnetic stimulation with computer-based cognitive training to treat Alzheimer’s disease. It is CE-marked in Europe, but has not received FDA approval.
A device that reportedly makes blood draws less painful. Seventh Sense Biosystems created the TAP microneedle blood collection device. Cleared by the FDA, it adheres to a patient’s skin and uses 30 microneedles and a vacuum to collect blood. Seventh Sense claims the process is “nearly painless.” The downside is that blood samples currently have to be tested within six hours of collection.
A neonatal MRI system. The FDA-cleared Embrace Neonatal MRI System is for imaging of the neonatal brain and head. One limitation of the device is contraindications for babies that weigh more than 9.9 pounds or have a head circumference greater than 15 inches.
Radiation therapy for fighting brain tumors. GT Medical Technologies’ GammaTile Radiation Therapy System is “an investigational approach intended to enable intraoperatively delivered brachytherapy for brain tumors that standardizes seed placement, improves dose targeting and delivery and decreases the risk of seek migration.” It has not yet received FDA approval.
Microhospitals. In an effort to meet needs in fast-growing areas, some health systems are experimenting with the idea of microhospitals, which typically include 15,000 to 25,000 square feet of space. Usually, the scalable structures provide surgery, pharmacy, imaging, diagnostic services and occasionally labor and delivery.
Source: MedCity News

Would you pay $4,000 a year for “consistent, comprehensive medical care to meet your specific healthcare needs and goals”?
How about for “the ability to reach your physician 24 hours a day, 365 days a year”?
Cleveland Clinic Florida is betting its new Concierge Medicine program will attract at least 300 patients willing to pay $333 a month — over and above each member’s normal health insurance or Medicare coverage — for an added layer of attention and treatment.
Although the definition of concierge medicine varies, it typically refers to an arrangement between a patient and a primary care physician in which a patient pays an annual fee in exchange for more personalized access. Several models offer longer visits and faster appointments, including same-day visits. Providers typically do not accept health insurance, and fees are charged for additional services such as diagnostic tests.
Concierge medicine can also refer to a highly specialized membership model marketed to affluent patients as a way to jump the line and access a higher level of care. A June 2017 New York Times story described a $40,000-a-year service for wealthy Americans that arranges appointments with the nation’s top specialists and meets patients at their workplaces, or even at airports.
Cleveland Clinic Florida’s new program makes no such promises, but a news release pledges it will provide “consistent, comprehensive, personalized medical care while cultivating in-depth patient-physical relationships that support patients’ health goals.”
In an emailed statement, Cleveland Clinic Florida’s president, Dr. Wael Barsoum, said exploration of a concierge medicine program began in 2016 “at the request of many of our patients.”
Staffed with a single physician and support staff, the program debuted this month and is currently enrolling patients, Barsoum said.
“Our goal is to accommodate 300 patients this year. We will explore expanding the program when we reach capacity.”
But a proponent of a more moderately priced “pay-as-you-go” physician-access model called Direct Primary Care says he doesn’t see much extra value in the feature list promoted on the program’s website.
Dr. Philip Eskew, member of Greenville, S.C.-based Proactive MD and founder of the website, which tracks direct primary care practices and legislation across the nation, said many of the benefits touted for the pricey program are already provided in patients’ normal health insurance plans.
While the Cleveland Clinic Florida program promises members around-the-clock access to its physician, many hospital systems and health insurance plans now offer remote access to physicians via telehealth programs.
Other features of the Clinic’s new program include:
-Comprehensive annual physical examination, including an electrocardiogram and blood draw on-site.
-Dedicated phone number to access the Concierge Medicine healthcare team.
-A customized wellness plan for members’ personal health goals
-Coordination of care with specialists and hospitalists (that’s a physician who specializes in caring for patients in hospitals).
-Assistance with medical records in case of emergencies away from home.
-“Always ample time” with your physician for in-office visits.
-Use of the Clinic’s “private fleet of land and air ambulances in an emergency” (for an additional transportation charge).

Eskew said $4,000 seems “probably higher than it needs to be” for that list of services. “I have no idea why people would pay for that,” he said.

Cleveland Clinic Florida joins other hospital groups in Florida that have created such programs, including Baptist Health South Florida in Miami and Mayo Clinic in Jacksonville.
Mayo Clinic’s program costs $6,000 a year for individuals and $10,000 for a couple and, unlike Cleveland Clinic’s program, will accept Medicare Advantage Plans that are preferred provider organization (PPO) or fee-for-service, according to its website. Mayo Clinic’s program also accepts other insurance programs and health plans.
Baptist Health spokeswoman Dori Alvarez said its Concierge Medicine program is no longer active, although a detailed description of it remains accessible on that hospital system’s website.
In Miami Beach, an organization called Primary Care Physicians Group, located at Mount Sinai Medical Center, each year invites “a small group of individuals to join our private medicine program,” according to its site. By keeping the membership size small, the practice is able to “optimize” and provide “a complete array of services,” its site says.

“Concierge care and direct care is still mostly done by physician practices, but some health systems with a prestigious reputation to uphold have been getting into the model,” Mark Cherry, principal analyst with health care research and data provider Decision Resources Group, said in an email interview. Outside of Florida, those health systems include Stanford Health Care, Sutter Health, University of Pennsylvania Health System and Massachusetts General Hospital.

“Mayo and Cleveland Clinic in Florida are basically going after a few thousand of the wealthiest patients in South Florida,” he said.

“Health care services are become more commoditized as regions coalesce around a handful of health systems. To separate themselves from the competition, health systems are working on branding and loyalty. Some health systems market their ubiquity and convenience, and others show off their prestige,” Cherry said.

Cleveland Clinic Florida’s program does not accept any insurance nor does it participate in government programs, including Medicare and Medicaid, according to its website. Also — except for the annual physical exam, EKG and blood draw — members must also pay for physician visits.
But for members seeking reimbursement from their insurance plan, the clinic will “facilitate completion of paperwork” on their behalf “as a courtesy.”
Eskew and other supporters promote Direct Primary Care not as white-glove treatment for the affluent but as a way for lower- and middle-income patients with high-deductible health insurance plans to have access to more frequent care.
Patients can reduce their annual insurance costs with a Direct Primary Care membership that costs $100 or less a month along with a low-cost, high-deductible health insurance plan in case of a medical catastrophe.
Eskew said expansion of concierge medicine programs for the affluent doesn’t help his organization’s mission of encouraging state governments to pass laws shielding Direct Primary Care plans from being regulated as health insurance.

“Politically it’s a nuisance,” he said. “We constantly have to distinguish ourselves from concierge medicine practices.”

Supporters of a proposed Florida law think more physicians will convert to the Direct Primary Care model if it’s enacted.

At last count, 756 physicians operated Direct Primary Care nationally. A handful have opened in South Florida, including MetroMed in Miami and Coupet Quality Clinic in North Lauderdale.
According to Sen. Tom Lee, sponsor of this year’s state Senate bill, patients win because “they have more immediate, predictable access to their physician.”

Physicians, meanwhile, “don’t have to spend 30 percent of their time and their staff’s time dealing with insurance companies,” Lee said.

Concierge plans targeted to the affluent, he said, don’t “move the needle in terms of saving people money, providing additional value. It’s just extorting more money from people who can afford to pay for it.”

Source: SunSentinel

UCF and Florida Hospital are competing to acquire the Lake Nona facility where the Sanford Burnham Prebys research institute has been slowly shutting down over the past two years.
On Tuesday, the two institutions will make their pitches to the Orange County Commission, detailing how their plans would breathe life into the building that’s become a shadow of the robust research center it once was despite receiving $300 million from the state, county, Orlando and private sources.
The presentations, requested by Mayor Teresa Jacobs, will shine a light on negotiations that have been developing for months behind closed doors and may finally settle the future of the facility, almost two years after the California-based institute decided to leave Florida because of a lack of money required to maintain and grow the site.
The proposals share a common theme: Each organization is partnering with an outside entity to turn the 175,000-square-foot facility into a destination cancer research and treatment center.
Florida Hospital is planning to partner with the Moffitt Cancer Center in Tampa, and establish five core programs at the facility, including translational research, drug discovery, a precision medicine research clinic, Phase 1 clinical research and a stem cell laboratory.
It’s planning to invest $100 million over 10 years; create at least 205 jobs in five years and 315 jobs in 10 years, with an average base salary of $85,000; and increase the number of research faculty members to 18 in five years and 27 in a decade. It also plans to enter negotiations with the current faculty and hire at least 50 of the current Sanford Burnham employees.
The hospital does not want to pay rent to the city and county, which own the facility, but will cover all maintenance and operational costs. It is also planning to return to the state the $11 million that’s left from its $155 million in incentive funds. If all goes as planned, the health system expects the transfer of the building and equipment on or before April 16.

“I think one of the major advantages of our proposal is that we’re ready to be in operation from day one,” said Dr. Steven Smith, senior vice president and chief scientific officer at Florida Hospital. “We’re ready to go and anxious to get started.”

UCF is bringing in three partners: Sarah Cannon Cancer Research Institute, which is Hospital Corporation of America’s cancer research division; Provision Healthcare, a network of cancer centers and developer of next-generation proton beam therapy; and Alter+Care, an Illinois-based development and investment company. The plan is to create a comprehensive cancer research and treatment center with a focus on basic and translational research, and novel therapies such as pencil beam proton therapy.
The group is proposing to lease the facility from Orange County, with UCF’s partners paying an estimated $2 million annually, although the university won’t pay rent for the space its employees would occupy. The school is also planning to return the to the state the $11 million in incentive funds.
This proposal calls for creating more than 300 high-paying jobs, with annual wages that range from $60,000 to $600,000. The school is willing to offer positions at UCF to Burnham faculty who have elected to remain in Lake Nona, based on an evaluation of their productivity and fit.
Dr. Deborah German, founding dean of the medical school, described the proposal as a “once-in-a-lifetime opportunity” that would facilitate cancer research, education and patient care for UCF. Most major academic medical centers, she said, have cancer care facilities.
She said UCF drafted its proposal more recently than Florida Hospital because it needed partners to provide funding and resources for the project.

“We couldn’t have done it alone,” she said.

UCF presented its proposal to the school’s board of trustees Thursday, which approved it.
For either proposal to move forward, all parties – the City of Orlando, Orange County, Tavistock land development company and the state – will have to give their stamp of approval.
The 20 months since Sanford Burnham’s plans to leave Florida were revealed have been marked with bursts of surprise announcements and periods of total silence. A deal with the University of Florida, which involved UCF, fell apart shortly after its details became public in 2016. And major characters – first the institute’s trustee chair and later the institute’s CEO – have unexpectedly retired.
At one point, realizing that the institute hadn’t delivered on its promise to create 303 jobs in a decade — it has met 87 percent of its job creation goal, the institute points out — the state asked for half of its incentive money back. But the request never got anywhere beyond publicly exchanged letters between the two parties.
A spokeswoman for the Department of Economic Opportunity said Thursday the department did not have any updates.
Sanford Burnham Prebys Medical Discovery Institute decided to open a research facility in Florida after receiving one of the largest incentive packages handed out by Florida. The state approved $155 million in incentives for operations, while Orlando, Orange County and Tavistock matched the amount by providing the land and building, bringing the total to more than $300 million.
But as the incentive funds began to dwindle, the California-based nonprofit said it could no longer sustain the operations and began to set in motion plans to leave, a decision that’s been anything but easy to execute.
And in the meantime, facing an uncertain future and with their careers in the balance, a significant number of Sanford Burnham’s faculty and staff have left.
According to Sanford Burnham’s latest scientific report ending on June 2017, 18 faculty members were still at the institute, down from the total of 27 primary faculty researchers the institute had recruited since arriving in Orlando a decade ago.
The departures began to accelerate last August, starting with Dr. Daniel Kelly, the institute’s scientific director, who’s now at the University of Pennsylvania. Since then, other faculty members have accepted jobs across the county — at University of Minnesota Medical School, Vanderbilt University and University of Texas San Antonio. Four recently signed on to join Johns Hopkins All Children’s Hospital in St. Petersburg and are planning to take some of their laboratory staff with them.
Sanford Burnham’s last high-profile recruit, Dr. E. Douglas Lewandowski, has also left. After just a little over two years here, he accepted a position at the Ohio State University.
Source: Orlando Sentinel

Tenet Healthcare Corp. has signed a deal with the Hospital for Special Surgery (HSS) in New York to build an outpatient orthopedic care and surgery center near Tenet’s Good Samaritan Hospital in West Palm Beach.
Tenet’s ambulatory care services subsidiary, United Surgical Partners International, will form a joint venture with HSS, which operates a hospital in Manhattan and over a dozen of outpatient centers in New York, New Jersey and Connecticut. U.S. News & World Report has ranked Its hospital first in orthopedics for eight consecutive years, and third in rheumatology.

“Many Florida residents travel to HSS in New York for the highest-quality musculoskeletal care,” HSS President and CEO Louis A. Shapiro said. “We are delighted to be making that same top-quality care more convenient to communities in South Florida where quality of life is so highly prized.”

The new facility would be adjacent to Good Samaritan Hospital. Staffed by HSS physicians, it would offer diagnostic services, ambulatory surgery, rehabilitation and sports performance assistance.

“Being able to leverage the knowledge and expertise at HSS in the care of orthopedic and musculoskeletal conditions will enable us to create a new center of excellence for our patients,” Tenet Executive Chairman and CEO Ron Rittenmeyer said.

Tenet declined to say how large the facility would be or when it would break ground.
In 2015, Tenet filed plans with West Palm Beach to expand Good Samaritan, at 1309 N. Flagler Drive, by 64,982 square feet.
In 2016, Good Samaritan earned $11.9 million on revenue of $178.6 million, according to the Florida Agency for Health Care Administration. It had a bed occupancy rate of 37 percent – one of the lowest among South Florida hospitals.
Source: SFBJ