Breaking Down Telehealth's Impact on Healthcare CRE

After hitting a high watermark at the onset of the COVID-19 pandemic, the amount of telehealth visits has leveled out, though at markedly higher levels than before the crisis. 

New research from JLL shows that telehealth peaked at 52% of patient visits at the beginning of the pandemic and now stands at about 19% of patient visits. This heightened adoption “marks a secular change in the patient access model,” according to JLL: younger generations are more willing to meet with healthcare providers virtually, with 67% of those surveyed between the ages of 18 and 29 saying they would likely meet with a provider virtually if an in-person visit were unavailable. And 73% of respondents between the ages of 30 and 59 say they would schedule a virtual visit.

So what does this mean for CRE? “Greater patient access will increase the relative demand for healthcare over time and drive additional real estate demand,” JLL analysts say in the report, noting that nearly half of physicians reported working more hours this year than last year, owing largely to telehealth. And what’s more, some industry estimates predict total patient volume will increase by nearly 20% by 2030. 

Approximately 78% percent of health system CFOs surveyed recently say they’ll invest more in tech to enable telehealth, even as 53% said they plan to decrease spending on optimizing physical assets. 

“Longer term, the adoption of telehealth will likely spur greater demand for medical care. Patients who may not have otherwise sought care now have an accessible gateway to the health system, driving greater demand for care and consequently health system growth. The risk to long-term healthcare real estate demand may be greater on the administrative space needs side of the equation. More work-from- home flexibility for office workers post-pandemic could reduce overall demand for office space but have limited impact on the medical office landscape where clinical care and services are accessed.”

JLL acknowledges that “any disruption event is sure to cause anxiety,” but said investors and occupiers alike should “take comfort on the road that was carved by previous industry disruptions.” 

“Technological progress increases the efficiency with which a resource is used, but the rate of consumption of that resource rises due to increasing demand,” the report states. “Similarly, increased efficiency in accessing medical resources through telehealth will quite likely drive greater demand for healthcare overall.”