Where Should You Expand Your Footprint? Hospital System Real Estate Strategies for Primary Care – Part II
Today, healthcare providers face a variety of uncertainties due to expanding regulations, shifting demographics and increased competition. In part one of this series we looked at some of the real estate challenges health systems face in delivering primary care and outpatient healthcare services to the markets they serve.
Historically, primary care physicians have been mostly community located for patient convenience and while hospital campus-based medical office building will continue to house those physicians who need to be close to the hospital, increasingly, patients will find doctors in their communities in a variety of different settings. How can health systems make real estate decisions designed to maintain market share, manage payor mix and determine financial viability in this rapidly changing environment?
Big Data and Healthcare Site Selection
As a result of “Big Data” real estate teams now have access to better decision support tools to guide their site selection and leasing decisions using data-informed scenarios to determine a forward-looking market footprint. Pinpointing regions with substantial health needs and a favorable payer mix can support a sustainable growth strategy.
Today, knowing who and where your best patients are, and where to find more just like them is serving as the foundation for facility site selection. This requires health systems to think more like a retailer when making real estate decisions.
Location Data, Location Data, Location Data
Sophisticated Healthcare systems are now using cohort analysis to evaluate health care utilization, expenditures, sources of payment and health insurance coverage for the U.S. population. AHRQ’s Medical Expenditure Panel Survey (MEPS), the survey integration with the National Health Interview Survey (NHIS) permits an enhanced capacity for longitudinal analyses of trends in health care utilization, coverage, access and health status.
Today the most advanced healthcare real estate providers are working with their client as partners combining the health systems critical demographic and patient data with GIS systems and incorporating these data sets into tools to be used in conjunction with traditional real estate site selection criteria.
Rooftops, income levels and competitor locations is no longer enough. The broker who merely identifies vacant space, market terms and underlying real estate fundamentals without evaluating the relevant demographics is not minimizing the inherent unknown risk in site selection for primary care clinics, free-standing Emergency Rooms and outpatient facilities.
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