According to a recent report from HSA PrimeCare, one of the Midwest’s leading full-service healthcare real estate advisors, implementation of the Affordable Care Act will spur many changes for healthcare providers in the near future, with the highest impacts taking place in ambulatory care strategy and new outpatient facilities.
“Our findings show healthcare providers will face significant challenges handling the increased patient population created by the Affordable Care Act and the new fee structures and cost pressures associated with it,” said John Wilson, president of HSA PrimeCare. “Yet with these challenges will also come many new opportunities, as savvy providers are rethinking old strategies and developing new ways to deliver efficient care models in an outpatient setting and expand their system.”
Through a combination of interviews, research and surveys, HSA PrimeCare engaged leading healthcare executives across the Midwest, including several presidents and CEOs of area hospitals, chief strategy officers at several health care systems, leading academics at Midwestern medical schools and several management-level decision makers from major providers, to gauge their opinions and strategies for successful implementation of the ACA and their predicted outcomes.
Under the ACA, providers are moving from a “fee for service” organizational structure to risk-based contracts that require them to treat the patient throughout an episode of care and take the risk of cost overruns or errors. With an influx of patients and a change in the fee structure, providers are working hard to develop methods that will handle larger volumes in a more efficient manner and in a less costly setting.
“Several themes emerged in our interviews and surveys as to the most effective ways to approach the ACA and new delivery methods,” said Wilson. “Strategic partnerships and physician alignment will be a big part of the strategy moving forward, as the larger networks will be better equipped to handle the patient volume and regulations associated with the ACA.
“However, it has become more evident than ever through our study that real estate strategy is playing an increasing role for today’s hospital executives. To handle this new patient load, providers will need to build new targeted facilities or re-purpose existing buildings to create more convenient, flexible and efficient healthcare environments. For most providers, the question is not if outpatient facilities will grow, but how, where and when it will occur.”
According to the survey’s findings:
• 100 percent of participants responded that the ACA would have some sort of impact on their ambulatory care strategy, with 60 percent labeling it a “moderate or significant” impact • Of the respondents, 75 percent are planning for more outpatient facilities to meet demand. • When queried on the type of outpatient facilities needed to meet demand, 67 percent identified urgent care facilities; 58 percent medical office buildings and multi-specialty ambulatory-care facilities; 33 percent wellness centers; and 17 percent specialized care and rehab facilities.
While providers will initiate new construction and increase their footprint, it is likely that they will own less of their real estate moving forward. Of the surveys respondents, 60 percent said they plan to own less of their medical office facilities moving forward, citing consolidation and focusing on core operating goals as reasons.
According to Wilson, many healthcare providers will turn to third-party experts to handle real estate property management and disposition strategies.
“The need for new outpatient facilities and real estate services will play a large role in the coming years for healthcare providers,” said Wilson. “Many providers will weigh the costs of ownership in these facilities versus using a third-party in order to focus solely on delivering the best care possible, leaving third-party firms with medical real estate expertise to manage assets and play a valuable role in future healthcare strategy.”
Healthcare providers also see trends such as multi-specialty medical office building design, retail clinics and telemedicine developing in the near future.
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