Here’s How Telehealth Will Shake Up Healthcare Real Estate
Healthcare entities will likely need less space for admin roles as people continue to work remotely.
Changing consumer preferences and advancements in healthcare technology are shifting the healthcare sector in ways that will likely unsettle the $1 trillion healthcare real estate market, according to recent analysis from BTIG.
The pandemic led to a so-called “forced adoption” of telehealth, with rates more than doubling in 2020, and experts expect the sector to continue expanding from current levels, with some saying it could grow by 10-15% annually. But BTIG says the impact on healthcare real estate, both in terms of timing and magnitude, is less clear. Healthcare entities will likely need less space for admin roles as people continue to work remotely, but the impact on clinical space is less certain. And while MOB fundamental trends have been strong during COVID, telehealth tech is still limited in many ways.
The industry experts BTIG hosted on its most recent industry analysis call “spoke more of potential efficiencies in their networks and portfolios rather than a wholesale reduction in clinical space over the next few years,” the firm wrote in a recap report. The future for healthcare administrators is likely more “office hoteling,” with some healthcare providers declining to renew admin space. And as telehealth continues to evolve, many systems may move away from a hub and spoke model with physicians. The trend will likely have a greater impact on suburban and urban locations, but rural locations will be far less impacted.
The report also notes that Amazon is also poised to disrupt the burgeoning telehealth sector with an expansion of its Care platform and an increasing commitment to what BTIG analysts call the “retailization” of healthcare.
“This trend is partially reorganizing the system by bringing care to the patient rather than the patient to the healthcare while treating them as a consumer,” BTIG analysts wrote. “Recent years have seen a continued push to move care to the lowest acuity setting, and with advancing technology that setting might increasingly be the patient’s home.”