Here are CBRE Healthcare’s key takeaways from the symposium’s expert presenters, which are indicative of the future direction we see happening within the industry:
The ability to flex and adapt within healthcare facility design and planning is paramount.
- Health systems that embrace the value of modern design principles will be better equipped to manage ambiguity, solve problems and create sanctuaries for caregivers and patients—even amid a crisis. The COVID-19 pandemic has pressure-tested and revealed healthcare organizations’ ability to transform, adapt and mobilize at relatively high rates and speed. As an industry, we need to create and design healthcare spaces that are more resilient and flexible for the future.i
- Resources must be used efficiently to maintain durable but affordable healthcare utilization across disparate populations. Financial realities, partnership strategies (mergers and consolidation), care model design and operational efficiencies and reform will redirect a system’s long-term plans to address the needs of the population it serves.ii
- Health systems must be equipped to pivot the focus and volume of care at a moment’s notice. Non-patient areas within healthcare facilities must be able to turn into patient areas. Additionally, it is important to have the ability to split facilities or portfolios to support critical versus elective care, in order to minimize disruption.iii
2. Financial Transformation
The pressure to reduce operational costs and capital spending is immense, while the payer/reimbursement model remains unsustainable.
- Healthcare organizations must think resourcefully and adopt creative solutions in order to reduce costs while successfully transforming their care model to deliver improved community health and high-quality care.iv
- With the healthcare industry being asset-heavy and highly regulated, there is continued financial pressure as revenues on a year-over-year basis are not keeping pace with expenses. Increasingly, private equity firms are investing in the industry and providing financial backing in partnership with health systems and large practice groups. In 2019, healthcare private equity deals across the globe were valued at $78 billion—the highest on record. Annual deal flow has also grown each year since 2015, with an increase in deals within the provider space. Private equity and real estate solutions that ease the asset load and lifecycle replacement responsibilities of healthcare owners will continue to grow exponentially, as owners seek to retool their balance sheets and operations to meet continued cost pressures.vi
- Capital spending will be reallocated as a result of the likely reduction in administrative space as more systems adopt remote/work-from-home protocols. Allocating more capital to clinical expansion will result in a strategic transformation of health systems’ portfolios.vii
3. Portfolio Strategy
The financial gap between inpatient and outpatient care is narrowing.
- The choice to reconfigure, renovate or build new space will rely on a health system’s understanding of its current portfolio, facilities analytics and the needs of the community. The health system’s unique mission and directives also play an important factor. As these decisions are contemplated and made, they must be carefully and consistently communicated to all stakeholders.viii
- Even before the global pandemic, patient care has been shifting to outpatient facilities. This continuing trend is due to technology advancements, value-based payments, scientific discovery, COVID-19 and the prospect of future pandemics. Hospitals will likely transform their business models toward narrower physical offerings focused on high-acuity, complex cases, with increased virtual offerings.ix
4. Rapid Trend Adoption
The pandemic has forced health systems to accelerate certain industry trends.
- Telehealth has become a norm and created efficiencies and benefits for triaging patients, but brick-and-mortar healthcare is not going away. At the end of the day, healthcare is physical.x
- Technological enhancements to physical patient care as well as the overall patient experience within a healthcare setting will continue to advance, shift and become more necessary in a post-COVID-19 world. Health systems will focus more on the return on investment (ROI) rather than the upfront cost.xi
- Consumerism will continue to drive the changes that will ultimately transform the healthcare industry, whether it is through technology, ambulatory care strategy or the location, design and construction of facilities.xii
CBRE Healthcare works with care providers in the U.S. and beyond to provide total lifecycle real estate and facility solutions that are value-based and data-driven. To learn more about CBRE Healthcare’s solutions and expertise, please visit us here.
The income generated through the symposium goes toward funding tuition scholarships for the students in Vanderbilt University’s Construction Management graduate program. If you’d like to join Vanderbilt University’s School of Engineering mailing list to receive updates on future events, please send a request here.
i Good Design is Good Business – Lessons Learned from the Frontlines | Bon Ku, MD, Emergency Medicine Physician and Assistant Dean for Health and Design, Thomas Jefferson University | Andrew Ibrahim, MD, MSc, Senior Principal, HOK
ii State of the Union 2020, Examining long-term realities through the lens of the immediate crisis | Ben Umansky, Managing Director, The Advisory Board | James Bearden, Gresham Smith
iii One Virus. Three Hospitals’ Response | Jonathan Cogswell, Assistant Vice President Facilities Services & Engineering, Northwell Health | Matthew Keahey, National Vice President, Medxcel
iv Transforming the Care Delivery Model | Don Orndoff, Senior Vice President, National Facilities Services, Kaiser Permanente | David Miller, ESa
v Global Healthcare Private Equity and Corporate M&A Report 2020 | Bain & Company, Inc.
vi The New Normal – Private Equity’s Role in Shaping Healthcare’s Future | Jeff Gallant, Operating Partner, Welsh, Carson, Anderson & Stowe | James Nicholls, Managing Director, Fitzroy Health | Luke Savage, VP – International Acquisitions, Medical Properties Trust | Patrick Duke, CBRE Healthcare
vii State of the Union 2020, Examining long-term realities through the lens of the immediate crisis | Ben Umansky, Managing Director, The Advisory Board | James Bearden, Gresham Smith
viii To Renovate or Build New? – Case Study of Baptist Health (BHC) | Scott Raynes, Executive VP | John Porter, VP Corporate Facilities and Support Services, Baptist Healthcare Corporation Pensacola | Steve Higgs, Meadows and Ohly
ix Hospital of the Future | Wendy Gerhardt, Senior Manager, Deloitte Center for Health Solutions | Dr. Alexander Langerman, Department of Otolaryngology, Head & Neck Surgery, VUMC
x Good Design is Good Business – Lessons Learned from the Frontlines | Bon Ku, MD, Emergency Medicine Physician and Assistant Dean for Health and Design, Thomas Jefferson University | Andrew Ibrahim, MD, MSc, Senior Principal, HOK
xi COVID 2.0: What have we learned for the next public crisis? | Michael LaMont, VP Facilities Management, Rush University Medical Center | Denton Wilson, VP Planning Design & Construction, Atrium Health
xii Transforming the Care Delivery Model | Don Orndoff, Senior Vice President, National Facilities Services, Kaiser Permanente