Healthcare Facility Trends, Emerging Models of Care Explored at Conference

INDIANAPOLIS, Ind. – What role does real estate play in the healthcare industry’s efforts to provide a continuum of care? What are the industry’s strategic drivers for real estate decisions? Two Duke Realty healthcare executives – Senior Vice President Jared Stark and Vice President John Marshall – shared their expertise on those and other topics during two separate educational panels at the Dec. 7-8 RealShare Healthcare Real Estate Conference.

Jared Stark

Navigating Change: Real Estate and the Continuum of Care
In addition to Moderator John Marshall, the continuum of care panel included Alain Beaini, executive director of the Devenney Group; Jason Signor, CEO & partner, Caddis Healthcare Real Estate; Peter Trice, partner, The Innova Group and Michael Vaughn, senior vice president of Walker & Dunlop.

Panelists discussed the continuum of care, i.e., the process of proactively analyzing a population, providing services for all levels and stages of care, improving access to healthcare and the overall patient experience and managing diseases of the population over time. It also may refer to care provided from birth to end of life. Several panelists said they’ve seen few cases of true continuum of care across the country because it can be challenging to implement while trying to keep costs down and revenues high. Some said that while they’ve seen more freestanding emergency departments, which enhance access to healthcare, these usually aren’t part of a comprehensive continuum of care platform.

John Marshall

Several panelists mentioned innovative new models that improve access and the patient experience, such as a mobile ED ambulance that treats people in the ambulance at their home rather than transporting them to the hospital. One panelist mentioned a human kindness model that improves the built environment and provides amenities throughout the entire system that positively affects everyone, including patients, physicians, staff and visitors.

Marshall of Duke Realty noted, “In a Mortenson survey conducted last year, 68 percent of providers directly correlated improving the quality of the facility to improving patient outcomes. This is something we all probably realize as obvious, but this quantifies it.”

Other trends mentioned included consolidation of clinical services, consolidation of physician groups and more development of end-of-life care. It was noted that healthcare for seniors usually provides a true continuum of care, including senior apartments, independent living, assisted living, memory care, skilled nursing and post-acute rehab.

The panelists said they’re seeing a growing trend in healthcare facilities of using space more efficiently and cost effectively, such as offering evening wellness classes, nighttime pediatric clinics, ambulatory settings for behavioral health and more.

Deal Flow Drivers: Site Selection, Demand & Capital Flow
Joining Stark on this panel were Moderator Matt Gilbert, vice president brokerage, healthcare, with Transwestern; Jim Croy, senior vice president, HCP MOB Inc.; Julie Johnson, principal, Avison Young and Jackie Lundblad, vice president, Strategic Planning, Ensemble Real Estate.

The panelists discussed the Medicare Access and CHIP Reauthorization Act, which is transferring value-based purchasing from strictly Part A to Part B reimbursement from Medicare. Physicians will have new risk-based contracts in which they have the potential to lose money if they don’t meet specific goals regarding healthcare quality, resource use, advancing care information and clinical practice improvement. The new rules will begin with a reporting period in 2017 and the changes in Medicare reimbursements will take effect in 2019. The panelists said they expect this will result in more consolidations and expansions of physician practices to spread out the risk.

Other panelists said MACRA will result in health systems seeking new capital partners or third parties to handle implementation and assume and manage risk. One panelist said this will likely result in a shift to more virtual primary care, home care and community care networks. Many said they expect health systems will need larger healthcare facilities to house the consolidated organizations or to serve as a medical call center rather than a clinic.

The panel was asked if they think the results of the presidential election will have a major, minor or no effect on the healthcare law. Some said it remains to be seen what the effect will be, and others said the new administration will significantly affect it, but that it may take several years. The panelists said the hottest trends in the healthcare real estate sector are employed physicians and consolidation. The panelists all agreed that the healthcare real estate market fundamentals are strong to very strong.