Consolidation Drives Healthcare RE Decisions

SEATTLE-Along with putting an additional 32 million Americans into the ranks of the insured, the Affordable Care Act is also accelerating consolidation among healthcare providers and insurers. That in turn will be a major driver of the organizations’ real estate decisions for the foreseeable future, Colliers International says in its ever first-ever report on medical office trends. GlobeSt.com saw the report exclusively in advance of its publication Friday.

It’s the regulatory requirements of Obamacare, more so than other possible drivers, that are spurring the consolidation trend “in terms of cost containment and economies of scale,” Andrea Cross, office research manager at Colliers and the report’s lead author, tells GlobeSt.com. Further, she says, “Younger physicians coming out of medical school are more willing to become hospital employees than their predecessors were,” a willingness that dovetails with the shift toward accountable care organizations that offer financial incentives for lower-cost outcomes.