Patient demand influences real estate and capital spending decisions
When I attended the Building Owners and Management Association (BOMA) International’s Medical Office Buildings & Healthcare Facilities conference in Atlanta in early May, one word I heard repeatedly was “decentralization.” One healthcare executive after another spoke to the audience of mostly healthcare real estate professionals about their evolving real estate strategies, which focused heavily on offering patient services in locations other than the main hospital campus and at times other than the traditional 8 a.m. – 5 p.m. office hours.
The message was clear: Patient demand for greater convenience is translating into a need to change the way healthcare is offered. In order to stay competitive, health systems must meet their patients where and when they want to receive services.
Dan Styf, vice president, regional and marketing strategy at Kaiser Permanente, said his organization is moving toward a retail strategy to expand their reach with additional, convenient locations.
“We’re buying up old Blockbusters and Hollywood Video buildings because they did a good job of choosing retail sites,” he said, adding that Kaiser Permanente is converting 10,000-square-foot retail sites into multipurpose buildings with two onsite doctors and telemedicine capabilities that allow patients to consult with physicians located elsewhere.
“For example, patients can speak to a dermatologist via video,” said Styf.
Arthur Gianelli, president and CEO of NuHealth, based in East Meadow, N.Y., said his organization is moving to a model focused on “decentralization where the hospital is not the focus … in the future, the hospital will be part of a broader network” of services that includes home healthcare, rehabilitation, primary care and specialty physicians, and mental health and social service providers.
The concept of providers changing the way they offer services in order to meet patient demand is one I’ve heard before.
When I spoke with Beth Guest, partner at Nashville, Tenn.-based law firm Waller Lansden, in March, she said insurance companies are also taking steps into the primary care arena by opening retail-style urgent care clinics. “It’s an interesting trend to see payers combining with providers,” said Guest. “The trend is driven by consumer demand, by people wanting to see a doctor after work or on the weekend, rather than having to go on a Tuesday morning.”
It makes perfect sense that healthcare consumers are increasing the pressure on organizations to figure out how to better meet their needs and expectations. We’ve all gotten more demanding in every aspect of our lives, so why should healthcare be any different? We are used to ordering holiday gifts from Amazon.com at midnight and L.L Bean will answer their phones no matter what time we call. We want what we want when we want it, and, if your company isn’t prepared to deliver it, we’ll happily keep shopping for one that is.
Mike Clemens, vice president, capital equipment and diagnostic imaging for supply contract firm Novation (whom I interviewed for the capital spending story on page xx of this issue) cites increased consumer sophistication and demand as one driver of hospital capital spending. This new breed of patient can have a heavy influence on hospital decision makers, he said.
“We are all much more savvy when it comes to everything we consume and our own healthcare because of the Internet, TV commercials,” said Clemens. “The patient is more educated and is looking on hospital websites to see if they have the latest and greatest technologies. That is going to trickle down to spending decisions.”
For example, Clemens said that although hospitals may prefer to delay purchases such as MRI, CT and ultrasound machines, patient demand will often speed up spending commitments.
“Patients will choose the hospital with the latest imaging technology versus one with a machine that is five or six years old,” said Clemens. Hospitals can either keep up with patient expectations or run the risk of becoming a less desirable healthcare provider.
Gianelli said it well in his closing remarks about the need for health systems to change their business models to keep pace with the evolving healthcare climate. “All hospitals are going to struggle with this, but it seems to me, the earlier you start, the better. Hospitals that are putting their head in the sand are going to be left behind.”
We hear all the time about patient-centered care and the movement toward a greater focus on the patient experience. Health systems that are only giving lip service to these concepts and that are not truly positioned to meet increasing patient demands may find themselves playing catch up very soon.
