A shift in medical office building design

Did your family physician’s practice recently fall under the umbrella of a hospital or health system? It’s a growing strategy of hospitals to acquire community based private practices converting them to hospital employees. As this trend grows, the way medical office facilities are designed will change as well.

Everyone’s doing what they need to be competitive. Larger health systems have been and are becoming much more active in their pursuit of off-campus real estate as they strive to provide lower cost patient care. This is an attempt to protect their market share and position themselves as leaders in certain specialties.   

Consolidation. As physician groups move into the role of a hospital employee, medical real estate needs to be consolidated. Individual physicians are not occupying medical facilities as much as they used to be; rather the facility is designed to compensate multiple group practices. This results in greater spacing needs.

As consolidation continues to rise, larger developments will too. When hospitals buy practices working in a medical office building they tend to merge the smaller physician practices together in single area which requires the development of larger floor plates. With all physicians working cohesively in the same space, coordination of busy medical staff, patients and equipment can be more efficiently managed.

A typical lease within a medical facility traditionally was in the 1,000-3,000 square foot range which was optimal for a small group practice. Times have changed with space requirements averaging closer to 5,000-8,000 square feet for lease space. Now, many physicians leased their own space, but as they shift to a hospital employee model, hospitals are acquiring the vacated space. It’s a win-win for physicians, because they are able to choose their preferred route of a hospital employee while not having to worry about managing their leases.

I only see this trend continuing. What are your thoughts on how this shift in hospital employment will affect medical real estate and the healthcare field?
 

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 http://www.hcrealty.com/medicalrealestatedevelopment/