HOUSTON—The healthcare industry continues to be in the news, especially with the incoming presidential administration. Amid the discussions from the provider side come the nuances of healthcare from the property management side. Debra Schooler, vice president and national director of healthcare property management with Transwestern, recently shared her insights in an exclusive with GlobeSt.com.

GlobeSt.com: What have you seen in the recent healthcare environment (added facilities, streamlined processes, etc.?)

Debra Schooler: There have been many changes in the healthcare environment due to the Affordable Care Act or Obamacare. Penalties for infections and re-admissions have caused an increased focus on care quality during hospital stays and after patients leave the hospital. This has affected clinical procedures and processes within hospitals and has also caused many hospitals to become more involved in post-acute treatment by vetting providers such as long-term acute care hospitals, nursing homes and rehabilitation facilities. Some companies such as Mainstreet have begun to offer properties built around a model that caters to this type of transitional care. With regard to physician practices, the additional requirements pushed down to healthcare providers (electronic medical records, etc.) have increased small physician practices' overhead expenses and have given them very little choice but to become employed by hospitals. The smaller, single-physician practice is becoming a thing of the past.

GlobeSt.com: Has ACA been detrimental to the healthcare real estate environment?

Schooler: The ACA's impact on healthcare real estate has both pros and cons. Experts estimate that 20 million more people are covered by health insurance due to the ACA. Regardless of opinions on efficacy, that is more people being treated and, thus, a necessity for more real estate. In addition, ACA requirements have focused capital spending on electronic health record implementation, physician practice acquisition and hospital consolidation. Consequently, there has been an underfunding of infrastructure renewal. Deferred maintenance is growing within the inventory of healthcare facilities, and that will need to be addressed at some point. There has been an increased focus on cutting cost, which directly affects how practices address real estate, one of the highest costs a practice incurs. It has caused some specialties to second guess expansions and shy away from the top-tier medical office buildings in the market.

GlobeSt.com: What should tenants look for in terms of the latest technology in healthcare real estate?

Schooler: The ACA has helped to accelerate the evolution of healthcare facility design, a trend which is likely to continue. High-tech multi-service ambulatory facilities, for example, function as comprehensive care clinics where all services are under one roof and patients can have multiple appointments, all in one visit. The building layout, data and power capacity, and HVAC systems have to support more intense uses that evolve over time and provide redundancy. “Telehealth” services are on the rise, which could transform the way healthcare will be delivered. From patient education to monitoring of chronic illnesses, companies such as American Well are enabling patients and doctors to communicate via a webcam, allowing patients medical consultations after regular business hours. A report from InMedica stated that healthcare providers encourage the use of telehealth to increase ties between physicians and patients to, in turn, improve quality of care. In the past, chronic pulmonary disease was the leading application for telehealth services, but experts project diabetes will take the lead in 2017. Federal policies, provider and payer demands, and patient utilization will be the primary drivers to watch in the upcoming years. While much of the conversation in this industry is devoted to the delivery of healthcare to everyone, we must not forget the global impact this industry is having on our environment. While quality of care is of the utmost importance, there is still a significant amount of waste and redundancy in healthcare services that does not diminish quality of care. As a country, it's important that we work to reduce that waste in order to make healthcare services more cost effective for the general public.

GlobeSt.com: What is on the horizon of note for landlords of healthcare real estate, i.e. more/less regulations, changes in ACA, etc.?

Schooler: Though not technically part of the ACA, Section 603 in the Bipartisan Budget Act of 2015 addresses off-campus hospital outpatient department (HOPD) services or facilities that are more than 250 yards from an inpatient facility. Effective January 2017, new off-campus departments will not be reimbursable under the higher rates of the Medicare outpatient prospective payment system and will need to be paid under the lower rates of the Medicare physician fee schedule or ambulatory surgery center fee schedule. Existing HOPDs beyond the 250-yard limit are grandfathered in. This may stifle construction of new off-campus HOPDs and also increase the likelihood of existing HOPDs remaining in current locations, which adds value to the real estate investment in those locations. Although it is difficult to say what the ACA will look like once the new administration is in place, population health and result-driven compensation is here to stay.

GlobeSt.com: What have you seen in the recent healthcare environment (added facilities, streamlined processes, etc.?)

GlobeSt.com: Has ACA been detrimental to the healthcare real estate environment?

GlobeSt.com: What should tenants look for in terms of the latest technology in healthcare real estate?

GlobeSt.com: What is on the horizon of note for landlords of healthcare real estate, i.e. more/less regulations, changes in ACA, etc.?

Instant Insights /

ACA Accelerates the Evolution of Healthcare Facility Design

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