More on Capital Finance

Two recurring medical real estate themes: Satellite clinics and health system mergers

I’ve been noticing two reoccurring themes in medical real estate: satellite care clinics and consolidation of health systems and physician practices. Both of these issues correlate with the unknown long term effects of healthcare reform as hospitals implement provisions and transform their organizations into more efficient care entities.

“When its doors are open, the new satellite emergency center will expedite the delivery of high-quality emergency services to patients from surrounding communities,” says Mark Adams, CEO at Ogden Regional Medical Center. Adams had a helping hand in deciding where MountainStar Healthcare was going to develop their second satellite emergency department (ED) location to serve the growing community in Northern Utah. MountainStar Healthcare’s parent system, HCA, tapped into the national trend of seeking treatment in primary care and outpatient clinics. After the success of their first satellite ED, they’re putting in another location to meet the increase in demand for emergency medical services.

Why a satellite ED and not another type of clinic? Satellite EDs cater to a wider scope of patients’ emergency needs than urgent care and ambulatory surgery clinics. Staffed by board-certified emergency specialists satellite EDs remain open 24 hours, 7 days a week, providing convenient and quality care to people in rural settings as well as urban. Other benefits of satellite EDs include:

•    Lessening demand on surrounding emergency departments
•    Decreased wait times for patients
•    Allows emergency crews to deliver patients and return to the field more quickly
•    Better meet the communities growing emergency care needs

The second theme that’s been dominating healthcare headlines is the growing number of health mergers and consolidations going between health systems and physician groups. Health system mergers are taking place continually across the country such as Jewish Hospital & St. Mary’s HealthCare Inc. merging with Saint Joseph Health System Inc. in Kentucky to the soon to be finalized consolidation of Catholic Health East (CHE) and Trinity Health, two leading Catholic health systems. The latter merger will result in a health system embracing 82 hospitals and 89 continuing care facilities and home health and hospice programs with operating revenues of about $13.3 billion a year.

Mergers serve to enhance health systems’ ability to develop innovative methods of care, advancing quality measures throughout their now, much larger continuum of care. By pooling together resources, mergers allow for greater standardization, coordination and integration of wellness services. As reimbursement rates are expected to decrease 15-20% by 2014, creating a more efficient and cost effective patient experience will aid in managing population health.


James Ellis, CEO, Health Care Realty Development Company, is a real estate investor and developer of medical office properties.


Aaron Razavi is Associate Marketing Director at Health Care Realty Development.



Visit their blog at

Show All Comments