As population health leads health systems focus on patients, it's also forcing them to re-think how they approach their real estate decisions, affecting everything from location and building design to where certain services are located.
For example, population health is one of the factors that has pushed outpatient facilities, which were typically on a hospital campus, to off-campus locales, based largely on the desire to be out in the community.
Richard Rendina, CEO of Rendina Healthcare Real Estate, said often his health system clients will take the practices they've acquired and consolidate them into a new location, in some cases seek to establish a one-stop shop.
"Outpatient facilities (and) ambulatory facilities are really the way that hospitals are looking to grow their marketshare today," said Rendina. "They're not necessarily looking to build a hospital in their patient's backyard, but they'd love to get a free-standing emergency department, or a fully integrated outpatient facility, where you've got a surgery center, breast center, imaging draw stations, OBGYN, physical therapy. A patient could get a lot of services completed in one day, which is great."
As with any subsector of the real estate industry, the first three rules are location, location, location -- but that wasn't always the case for hospitals. Population health is prompting systems to seek spots that grant a high level of visibility, where signage and architecture play a larger role than they typically have in the past.
Eric Carmichael, principal of healthcare real estate firm Medcraft, said location has become especially critical under the population health framework, as organizations become more accountable for the health outcomes of an entire community. In analyzing their array of services, systems should be targeting areas that may be lacking in easy access to certain types of providers.
"You need to be able to get to patients," said Carmichael. "It's like any other service. When you want it, you want it to be available and timely. Patients don't want to drive great distances and they want it to be convenient. Our role is to find which areas are being underserved, and develop strategies to serve those markets. When we identify places to locate services, we're looking at market data and responding to the broad geographic needs."
Another prime consideration, he said, is providing care in lower-cost environments. As consumers take more control over their care, driving down the cost becomes increasingly important.
"We've adopted the quadruple aim," said Carmichael. "The triple aim was, 'enhance experience, reduce cost, improve outcomes.' We've taken the triple aim and added the component we thought was missing, which is physician alignment. They play a critical role in the delivery of healthcare. Our goal when we develop a project with them is that, when it's operational, we've helped them accomplish their goals."
To engage with the physicians directly, the firm begins by finding out what they want to accomplish in terms of impacting the community. When an idea is implemented, its results are compared to what has already been established.
For example, one of the metrics that's looked at is cost of care. The firm, working with physicians, may consider a new approach around something with the potential to improve the patient experience, but that initiative might require them to use considerably more space than they typically would. At that point, the parties will examine the empirical evidence to see if the approach would indeed improve the patient experience.
Design has also been affected by population health. Rendina said many building designs are now fully integrated; some feature a central check-in in which the patient's information is shared throughout the network, allowing them to easily visit any of the specialities within the building.
The need to be fully integrated, said Rendina, extends beyond the realm of traditional real estate -- it has to do with the way reimbursements are now structured. In the population health landscape, it's imperative that the hospital be involved in every aspect of patient care, not just the inpatient side.
"That doesn't mean they necessarily want to own the real estate in the traditional term of an integrated real estate portfolio, but it's integrated for them by way of partnerships with a developer, or a partnership with a skilled nursing operator, where they have a referral kind of business," said Rendina. "They can have a greater influence on training and staff, and how a patient is going to be treated once they leave their hospital and go into a post-acute setting. If they get readmitted to the hospital, the hospital's not going to be reimbursed for that readmission. The (Affordable Care Act) is going to look at it as being a failure somewhere."
As a future trend, Rendina is anticipating more competition when it comes to health systems jockeying to be seen. His firm recently conducted a double-blind survey examining what healthcare executives look for in a real estate developer when looking to engage in a development project. The survey included such leading questions as: How many buildings or plans have you developed in the past year five years? Of those, how many were in a competitor's backyard? Have you had a competitor build in your backyard?
Out of 100 respondents, and with a margin of error of 8.6, two-thirds of executives said they had built near a competitor, and that a competitor had built near them.
Carmichael sees another trend: Virtual care.
"Virtual care patients want access to care when they want it, whether it's in their office or in their home," he said. "We're looking at technologies that connect providers with patients in a way that the patient doesn't have to drive to the facility. We're trying to figure this out."