Posts Tagged ‘technology’

D-Day For Obamacare Means Big Changes For Healthcare

Tuesday, May 27th, 2014

MOBs are getting ready to take center stage as healthcare moves into more of a localized, outpatient setting.

By John Driscoll, President, Alter+Care

The first of this year was to be Obamacare’s D-Day. Though some changes kicked in earlier — the right to keep kids on your health plan until they turn 26, for example — the big provisions like the individual mandate became law this year. The ramifications from a medical and economic standpoint have been written about amply. In regards to the healthcare real estate industry, there are two very large trends: the consolidation of providers and the move to outpatient as the new center of healthcare delivery.

THE CONSOLIDATION WAVE
Part of the Obamacare plan to improve outcomes is the concept of the Accountable Care Organization. ACOs are essentially consortiums promoted as bigger, better models that manage health at the population level across a broader swathe of the healthcare specialties.  An ACO might include a hospital, various specialty groups, a  surgery center, imaging, emergency department and even nursing homes, with all payments made to the head of the ACO – usually the hospital – and then distributed to the rest of the group.

It’s now all about the team. As a result, the ACO has caused the biggest wave of consolidation I’ve ever seen in the sector. Consider that a quarter of specialty physicians and 40 percent of primary care physicians are already employed by hospitals. This number is up from 5 percent and 20 percent, respectively, in 2000. Some larger specialty practices are combatting this trend by merging with other practices to avoid being purchased by healthcare systems or hospitals.

Some independent practices are moving out of condominium office buildings and joining together to acquire office buildings. The costs of maintaining small independent space can become burdensome, especially as the technological pressures on integration and connectivity are imposed. Chances are, information technology financing will become an ever-increasing part of medical office loan commitments. Some IT expenditures are in the $30,000 to $50,000 range, while multi-specialty groups have larger expenditures to fund.

THE NEW CENTER OF HEALTHCARE
In order to lower costs and operate more efficiently, hospitals have migrated services from expensive acute-care environments to technologically enabled outpatient facilities. The hospital-centric model of the past has already given way to a hub-and-spoke network in most markets, where outpatient centers provide convenient and accessible care to patients and refer volumes to affiliated inpatient facilities. So what’s next? As it develops, hub and spoke will become a distributed model of care. It will result in providers who are physically dispersed, yet highly integrated through technology. Electronic medical records and advances in medical information technology will allow discrete providers to operate as a team. Primary care doctors will act as gatekeepers, coordinating and overseeing care regimens across this broad network.

The presence of this “patient-centered medical home” model means large MOBs (rather than hospitals) will become the hubs, while smaller specialty sites have become the spokes.  Think of the last time you visited a hospital for a procedure as opposed to a medical office building located in your community. Some systems are even leasing space in retail malls. As a result, the MOB is the definitive center not only of care, but also of healthcare real estate.

Last year was a banner year for outpatient services, and the investment community jockeyed to scoop up prized MOBs. There was a total of $4.98 billion-worth of MOB sales through the third quarter of 2013. This is compared to MOB sales of $5.21 billion for all of 2012. This has resulted in an average sales price of $231 per square foot, which is very strong with cap rates in the 6 percent range. If you extend the numbers out to sales of all buildings leased by healthcare providers, including doctors’ offices, urgent care clinics, diagnostic labs, imaging centers, the total reached $6.67 billion last year.  This was the second-highest number we’ve experienced in 13 years with a sales price of $270 per square foot. When you consider that 90 percent of the $1 trillion of healthcare property overall is still owned by hospitals, it is certain we are only at the beginning of this shift toward third-party real estate ownership.

To meet the challenges of distributed care and cost reduction, developers and operators of healthcare assets will need to think about the particular mix of services and programming in every building. This will result in the consolidation of redundant and inefficient facilities, while in other cases it will mean extending into preventive health and wellness to achieve population health management goals.

This article first appeared in Western Real Estate Business.

FCC Is Connecting Healthcare Providers With Remote Patients Via Computer

Wednesday, September 1st, 2010

National Broadband Plan expands telemedicine to patients who live in rural areas.  Access to healthcare isn’t always convenient for Americans who live in remote rural areas.  To fill the void, high-speed internet connections are being put into place to bring top-quality healthcare to patients via computer. The Federal Communications Commission (FCC) has pledged $400 million a year to connect approximately 10,000 rural healthcare providers under its National Broadband Plan.

A case in point is Redway, CA – a town of 1,200 located 200 miles north of San Francisco – whose Redwoods Rural Health Center and Dr. Wendi Joiner serve 4,000 patients, many of whom do not live within easy driving distance of the clinic.  According to Dr. Joiner, “It’s a special challenge.  I love it, but sometimes I feel like there should be two or three of me.  It happens a lot where we’re asked to do things that we’re not specialists in.”

The FCC’s rural telemedicine plan will make it easier for rural people to access healthcare, according to chairman, Julius Genachowski.  “If you have rural connectivity for healthcare, then patients don’t have to drive two or three or four hours for their treatments – instead, (they) can stay back where they live, consult with a medical professional remotely.”  The FCC’s pilot program has been successful and expanded the reach of the University of California, Davis Medical Center’s telemedicine clinic.

According to Dr. Tom Nesbitt, who heads the UC Davis rural program, his hospital serves 3,000 patients annually who live in remote locations.  “The demand would even be greater if the remote locations had equipment, bandwidth and training.”  The money to make this possible is already available through the Universal Service Fund, which brings telephone service to rural areas.  Genachowski is transferring the money to broadband to improve the availability of healthcare in remote locations.  “One of the greatest forms of savings will come from healthcare spending that we don’t have to make because we catch problems earlier.  We can treat and diagnose remotely,” he said.

Wanda Jones: Time to Reinvent Hospitals and Medical Office Buildings

Wednesday, September 9th, 2009

great_ormond_st_readyHospitals and medical office buildings must undergo a complete rethinking to move them functionally and architecturally from the 1970s to models that make sense for the 21st-century.  Wanda Jones, healthcare futurist and president of the New Century Healthcare Institute, believes that we need to reinvent hospital design and construct linear-spine facilities that provide patients with more personalized medicine.  This anticipates expansions, contractions, removal and replacement of patient towers by dividing the number of patient beds into two, three or four towers.  This way, they can be incrementally changed without interrupting the others and are readily adaptable to specific programs.

In a recent interview for the Alter+Care Podcasts on Healthcare, Wanda Jones discusses the paradigm shift in terms of new technologies that will make obsolete the knowledge base on which healthcare systems, hospitals and physicians have made money up until now.  Every surgical specialty will use robotics, and cures for cancer will be based on technology that has arisen out of the human genome project.  The New Century Healthcare Institute is a research-and-development and educational foundation devoted to population-based planning and adaptation of the healthcare system to future conditions.