Responsibility and Opportunity: Commercial Real Estate’s Role in Healthcare Reform

Stephen Jones is Chairman and CEO of Snyder Langston, a leading real estate advisor and builder for Fortune 500, mid-size and start-up companies. With more than 30 years of industry experience, including service on the Board of Directors for Hoag Hospital, Mr. Jones has cultivated a passion for effective real estate solutions that are responsive to the changing world of healthcare.
Stephen Jones is Chairman and CEO of Snyder Langston, a leading real estate advisor and builder for Fortune 500, mid-size and start-up companies. With more than 30 years of industry experience, including service on the Board of Directors for Hoag Hospital, Mr. Jones has cultivated a passion for effective real estate solutions that are responsive to the changing world of healthcare.

By Stephen Jones

America’s healthcare system is in radical transformation, and the commercial real estate industry is poised to play a tremendous role in that process. Phoenix also has the promise to serve as a model for success, both as one of the nation’s consistently fastest growing metro populations and as a top retirement destination for the “65-and-better” crowd.

Though each of Phoenix’s demographics has their own unique wants and needs, they do share one common denominator in the “new” healthcare system, and that is their demand for value. In fact, value creation is so important, it is considered by some to be the lynchpin that will differentiate competing medical care in an environment where groups are being paid for outcomes (or value) rather than by procedures performed.

Politics aside, the provider side of medicine has long recognized that the cost of U.S. healthcare is outrageously high while quality is uncomfortably low, and the most direct way out is to reconcile the two. How? By reducing costs while improving outcomes… by becoming as simultaneously proficient and efficient as possible.

In this scenario, medical groups (and the companies that build and lease their spaces) must more than ever consider not only the physical environment but also the customer. It’s no longer enough to peace-meal buildings together. Instead, our industry must consider the “process and flow” of every square foot. How do these spaces operate as stand-alone assets? How do they integrate into related properties like hospitals and labs? How do patients feel about these spaces, and how does that ultimately impact their level of care and satisfaction?

Achieving an integrated answer that satisfies all of these expectations demands a partnership from early in the real estate process. It requires us to truly know our clients so that we can work through their physical needs together, create custom infrastructures and technology solutions together, and design results that not only work for their patients but also empower their medical experts to deliver the most integrated, coordinated care possible.

Snyder Langston provides consulting and development services for healthcare groups across the West, Southwest and U.S., including ground-up construction and the renovation of existing space. In this niche, we help clients replace the traditional “spend more to get more” medical stratagem with an approach that operates more efficiently from the start. For most of our clients, this involves the population health model, or a commitment by a healthcare group to take care of a large population of individuals (whether geographic or by employer) over a continuum. This model uses custom infrastructures and IT systems to vigilantly predict who is or will become at risk for medical conditions, track patients, manage referrals and duplicate care so that money and resources are not being spent unnecessarily.

This is critical for all demographic groups under the new healthcare system. Just one example is Medicare Advantage. In a time when less than 5 percent of hospitals are breaking even based on Medicare payments, healthcare groups can maintain their budgets or come out slightly ahead by providing efficient, exceptional care that avoids duplicated expenses, unnecessary medical visits and hospitalization. In the process, whole populations are receiving a higher level of service that typically includes care teams for specific population segments like frail elders or multiple chronic diseases.

What is the composition of these care teams? What types of spaces do these teams need and what are the costs of those spaces? And what physical resources do they require to operate most efficiently? These are the questions we must help our clients answer long before we put the first hammer to nail or pen to contract.

As we progress, we’re seeing many of the typical 100,000-square-foot, 20-40 tenant medical office buildings all but disappear. In their place are smaller and more efficient facilities, such as St. Jude Heritage Medical Plaza in Southern California. This LEED-certified, 88,000-square-foot ambulatory care center sits within a residential suburban community and successfully responds to the dichotomy of becoming more cost effective while providing improved medical care. One example: exam rooms are grouped in pods adjacent to the team workspace, which eliminates wasted steps for the health team while enhancing communication.

In another facility, social workers and nurse practitioners are nested among nurses and physicians who are actively seeing patients. This allows them to interact with on-site team members while also practicing telemedicine with patients at home—a real-world example of turning the requirements of the population health model into a completed, operating physical space. At the same time, employees are filling their call to provide the finest care possible while eliminating unnecessary expenditures. 

In this new environment, we as industry experts can no longer put off an understanding of the clinical side of today’s healthcare market. The population of Maricopa County alone grew more than 24 percent between 2000 and 2010, and our senior population is equally active—so much so that it was ranked by the Urban Land Institute as one of the nation’s top ten fastest growing senior populations and top ten metro regions with the largest number of new seniors. That represents not only a tremendous responsibility, but also a tremendous opportunity to shine with new strategies for delivering healthcare excellence.

 

Leave a Reply

Your email address will not be published. Required fields are marked *

two × 1 =