In order to be successful in today’s healthcare arena, executives at most hospitals and health systems realize that they must deliver medical services in a wide array of off-campus, outpatient facilities. However, traditional health systems aren’t the only ones jumping on such a path, otherwise known as an ambulatory strategy.
In Greater Houston, the country’s largest and one of its best-known cancer centers, the University of Texas MD Anderson Cancer Center, has been pursuing such a plan for at least a decade. These days, however, MD Anderson officials are preparing to further adapt their ambulatory strategy in a changing healthcare environment, according to Mike Brown, executive director, business development.
The changes the cancer center has for the future could have quite an impact on Houston’s MOB sector and its community hospitals, as MD Anderson could start leaving facilities it currently leases for new spaces it might choose to own.
The provider, which sees more than 100,000 patients annually and brings in revenues of about $4 billion, occupies about 11 million square feet of space in a variety of buildings at its main campus in the Texas Medical Center. Out in the community, it leases and occupies a number of spaces with anywhere from 30,000 square feet to 45,000 square feet, many in MOBs located on hospital campuses.
When it first began establishing these community-based ambulatory care centers, it did so “very, very quietly,” Brown recalls, noting that it concentrated on providing radiation oncology services in leased MOB space at community hospitals that lacked established cancer programs.
Over the years, however, its ambulatory model has evolved to where MD Anderson now offers an expanded menu of clinical and patient support services at those locations. As it looks to the future, Brown says MD Anderson is “getting to point now where we’re outgrowing the usefulness of an MOB-based space.” It will most likely need larger spaces in which to offer that expanded menu, which someday could include imaging and physical therapy.
“What we’re looking at, really, is moving away from … a very, very small leased-based model on hospital campuses, potentially to our own development of centers around the Houston area that encompass the entire continuum of cancer care,” he adds.
As a result, as its leases expire in MOBs throughout Greater Houston over the next four to five years, MD Anderson will start looking at its ambulatory strategy more like acute-care systems have, Brown says. “While other systems around us in the Houston market are working toward a more vertically integrated network, we’re not quite capable of doing that because we’re a specialty provider,” he notes. The issues to examine in this case, he points out, is how to co-locate services in such as way that hospital systems working on vertical integration models can be encouraged to partner with MD Anderson.
John Mugford is the Editor of Healthcare Real Estate Insights, the nation’s first and only publication totally dedicated to covering news and trends in healthcare real estate development, financing and investment. For more information, please visit www.HREInsights.com.