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Strategies for Managing Healthcare Real Estate Assets in the Wake of COVID-19

When construction stalled in many industries during the 2008 recession, the healthcare industry experienced a building boom, with capital investments fueling the rise of new hospitals, clinics and medical office buildings. Just a decade later, pressure points on these facilities are mounting as a result of COVID-19, and investments aren’t nearly as accessible as they once were. But crisis breeds innovation.

While the pandemic strained our health systems and facilities, it also illuminated an opportunity. Healthcare networks can take what they’ve learned and strategically evaluate, reallocate and define their real estate assets to build healthier communities and improve patient care.

A Crossroads for Patient Care

Our lifestyle choices have created a looming crisis for providers as the sick continue to get sicker. The CDC estimates that 90 percent of patients hospitalized for COVID-19 had underlying conditions. The pandemic reinforced what many already knew: Comorbidities will continue to rise until preventative care becomes more central to how healthcare systems invest in their communities and facilities.

Over the coming decade, trends indicate that while the number of beds in a hospital might not change, the type of beds will. Hospitals will be for the sickest among us, with critical care patients seen in high volumes. Acute patients, on the other hand, will increasingly seek treatment within their communities, outpatient clinics and even in their homes. Palliative and hospice care will continue to move into homes, providing patients an increased level of comfort in their final days.

Preventative care, wellness education and natural medicine will become more commonplace. The growth and adaptation of sports, dance, music, art and other alternative therapies will increase the need for outpatient clinic environments, wellness campuses and mixed-use healthcare facilities and campuses.

Addressing Inequities Through Facility Investments

COVID-19 disproportionally impacted minorities and people living in poverty. The coronavirus death rate was more than nine times higher in predominately non-white neighborhoods. Unfortunately, large healthcare facilities located near these communities often are perceived to lack personalized care or the ability to meet specific needs of patients, which can create significant barriers to entry.

To combat this, we should encourage clinicians to be innovative in how they bring sensitive, compassionate care to underserved communities through mobile and pop-up clinics that extend beyond the traditional facility. Healthcare delivery should be embedded within the community, working symbiotically with places, people and organizations that have already gained the trust of the community. Embedding healthcare services in existing, trusted services and locations will have a catalytic impact on how underserved communities perceive, access, and use healthcare.

The successful healthcare systems of tomorrow will invest in these unique spaces, prioritize predictive analytics and build strategic partnerships with local community organizations. Future clinicians should be prepared to leave their medical office buildings and hospitals more often to care for people how they need it, where they need it. Ideally, providers will practice and serve in their own community.

Telehealth Growth

The pandemic also expedited the adaptation of telehealth as providers quickly became comfortable using technology to treat patients remotely. In the coming years, telehealth may be particularly effective in providing holistic, preventative and chronic care management without needing to physically see patients. It could also be a helpful tool in connecting patients to the right provider, even if that means it is a clinician in another city or state. Telehealth services may also help to bridge the anticipated provider gap. The increasing adaptation of this technology has the potential to change the footprint and allocation of space in hospitals and medical office buildings alike.

Final Takeaway

As healthcare systems evaluate their real estate portfolios and plan for the future, hospitals will be smaller and more flexible; community clinics and pop-up spaces will become essential assets; preventative treatment spaces will be prioritized; and healthcare campuses that promote holistic care will see greater investments. Technology within the care delivery system shouldn’t be supplemental or optional, but rather seamlessly integrated into the healthcare delivery enterprise. The utilization of artificial intelligence and the copious data points available on patients should dramatically change the delivery and footprint of healthcare systems.

Yes, COVID-19 was a shock to the system. But it also provided a positive lesson in how healthcare systems can leverage their facilities to provide greater agility, responsiveness and comprehensive care going forward.

HOK’s Healthcare Consulting group helps clients create sustainable health systems that simultaneously leverage their core strengths while strategically positioning themselves to remain financially viable and fulfill their missions over time.

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