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GPE Healthcare Forum - Panelists explore how health care changes impact patient care and real estate

12/10/2013

Fundamental shifts underway in health care, influenced by the Affordable Care Act and senior citizens’ changing needs, are shaping not only the care people receive, but the buildings in which they receive it, panel members said at the inaugural GPE Health Care Forum held on Oct. 24.

Big trends involve hospitals and health systems buying doctors’ practices and consolidating the physicians in new clinics that range anywhere from 7,000 to 40,000 square feet. Meanwhile, hospital systems like the newly formed Scottsdale Lincoln Health network, a merger of John C. Lincoln Health Network and Scottsdale Healthcare, will construct mini clinics under 1,500 square feet. That leaves a big question mark over the fate of 1,500 to 2,000 square feet doctors’ offices in multi-tenant buildings.

Even before Congress approved the Affordable Care Act, Sun Health knew it had to change its business model due to high costs and the rapidly expanding population of elderly people. In 2010, about 40 million people over the age of 65 lived in the United States. In 40 years, that number is expected to double.

“The problem with that is the utilization of medical care starts skyrocketing after 65,” said Joe La Rue, Sun Health’s executive vice president. Most elderly people develop dementia or Alzheimer’s, then “you’re really consuming that health care dollar.”

In response, Sun Health merged its two hospitals, Del E. Webb and Boswell, with Banner Health in 2008. Sun Health retained its other assets, and shifted its health care focus from caring for the sick to healthy living and providing a continuum of care, from senior citizen to end of life.

Senior citizens’ changing tastes are also influencing design and construction decisions, La Rue said. Trends in nursing care and assisted living are moving away from three and four people to a room to private spaces with green design that resemble an ordinary home.

Meanwhile, freestanding hospitals are also changing their business plans. Scottsdale Lincoln Health Network plans to, over the next five years, add up to 300 physicians and construct eight buildings each year, said Nathan Anspach, senior vice president of John C. Lincoln Physician Network Development and Accountable Care.

New structures will include a series of mini clinics ranging from 800 to 1,500 square feet, in addition to ambulatory centers ranging from 25,000 to 40,000 square feet that come equipped with operating rooms and state-of-the-art imaging equipment.

“We’re looking more and more at places that we can put four or five doctors or more, that are able to stay open seven days a week and into the night,” Anspach said. Signage is emerging as a key factor for these mid-size spaces that panel attendees said will soon proliferate. Since the facilities are not located near hospitals, branding is critical.

Many of those doctors are coming from independent physician practices that hospitals are now buying up. Today, hospitals or health care systems employ about 60 percent of physicians, but that number will eventually rise to 90 percent, predicted Bill Foulkes, regional vice president at Hammes, a healthcare consultancy. Meanwhile, retail clinics operated by drug stores and supercenters like Walmart are expected to abound, along with other community clinics that make health care accessible for people no matter where they live.

When hospitals buy physician practices, doctors abandon their 2,000 square foot offices in multi-tenant buildings, creating a glut of vacancies, said Julie Johnson, executive vice president at GPE.

“There’s going to be these holes that are left in some of these larger medical office buildings,” said Johnson. “That’s one of the challenges that some of the medical office owners have right now. If you don’t have large contiguous spaces, how can you find them? How can you relocate people and make some space that’s large enough so you can do some of these new leases?”

The answers to these questions will unfold over the coming years, panelists said. Stay tuned for details regarding future forums hosted by GPE Companies.

Now celebrating 40 years in business, GPE Commercial Advisors and GPE Management Services are the premier providers of award-winning sales, leasing, property management, consulting and corporate services for the commercial real estate industry. Specializations include healthcare, office, retail, land, industrial, and dental properties. GPE Companies remains committed to excellence and serving clients’ and team members’ best interests while achieving profitable transactions. Core values include integrity, respect, innovation, teamwork and quality of life. 

To learn how GPE Management Services can assist you with cost-efficient commercial property management, contact us at 480-994-8155.

GPE Companies
2777 East Camelback Road, Suite 230
Phoenix, Arizona 85016
480-994-8155 | www.GPE1.com

12/09/2013 - 18:31

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Avison Young - Arizona

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