By Dennis Kaiser

Healthcare systems are operating in a dynamic environment as they try to improve outcomes, increase access to care, lower cost and meet the rise of consumerism. The migration toward outpatient care has been taking place over the past decade, and will continue to accelerate as healthcare systems adjust their holdings to meet the increased demand and fend off competitors.

As Connect Media gears up for Connect Healthcare next month (Nov. 7^th & 8^th, Scottsdale, AZ), we asked Meridian’s John Pollock, a San Ramon, CA-based developer and expert in MOB properties, to share insights into the healthcare real estate sector. Here’s what he had to say in our latest 3 CRE Q&A.

Q: What are the biggest trends driving the market today?

A: Increased demand that is driven by the population 65+ and the number of people insured under the Affordable Care Act (ACA). The Boomers account for the highest per-capita health care spending because of the utilization of the system and this cohort is expected to double between 2015 and 2055. The increase in the number of people insured has put pressure on the existing stock of facilities, while pushing reimbursements lower and requiring healthcare real estate professionals to get creative.

Containing cost while increasing access to care. The ACA placed a lot of focus on the cost-effectiveness of care, while significantly increasing the number of people utilizing the services and placed constraints on reimbursements.

Q: How are healthcare real estate leaders navigating the challenges today?

A: The response to these challenges has been a proliferation of a more distributed network of care facilities. These outpatient centers have increased access to care, created greater brand awareness and helped to reduce cost. These objectives are being achieved through a combination of expansion of existing facilities, conversion of others and new clinics or medical office buildings. This distributed network is being done in many forms; retail locations, outpatient multispecialty buildings, free-standing clinics and strategic micro-hospitals.

Q: What are some examples of the innovative solutions that you have seen emerge in the marketplace recently?

A: As we look back at the last decade, we have seen convenient care embedded in almost every supermarket and drug store. Technology and the increased use of telemedicine has and will continue to change the physical space where care is delivered. Outpatient facilities are popping up in every neighborhood. Meridian, in the tight urban markets of California, has worked collaboratively with healthcare clients to get creative to design and develop spaces that deliver a top-notch patient experience, in convenient locations, at affordable prices. Some examples of the creativity that Meridian has recently implemented include converting a former general office building into an OSHPD 3 healthcare clinic, converting a post office building into an OSHPD 3 dialysis clinic and the adaptive reuse of a 1970’s era building on the historical registry into an outpatient clinic.

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For comments, questions or concerns, please contact Dennis Kaiser