Healthcare Archives | Page 5 of 6

Jan 23 No Comments

South Florida Hospital Chains And Insurers Are Getting Bigger. Is That Good For Patients?

Author: Admin

Categories: Commercial News,Development,Healthcare,Trends

South Florida insurance companies and large hospital chains recorded healthy profits and acquired rival companies in an attempt to grow bigger in 2018, a new analysis found, accelerating a race to gain leverage in healthcare pricing negotiations.

But consumer advocates warn that whatever savings the healthcare monoliths find are unlikely to be passed down to patients.

Allan Baumgarten, who authored the recently released 2019 Florida Health Market Review, said the insurance companies and hospital chains are each seeking to achieve dominance.

“You have both health plans and hospital systems in a sense each trying to gain market strength and match the market strength of the other one,” he said. “It’s kind of a cyclical process. One makes that decision and then the other says, ‘Well, we have to get bigger as well.’”

Research has shown that prices are higher where hospital markets are more concentrated, according to Phillip Longman, policy director at the left-leaning Open Markets Institute, which advocates against monopolization in various industries.

“Sometimes, through consolidation, you get real economies of scale: better coordination, integration of care,” Longman said. “But experience has shown that whatever cost savings result are generally not shared with consumers.”

In Florida, consolidation among health insurance companies drove a 12% rise in profits for health maintenance organization insurance plans, or HMOs, and South Florida hospitals reported 8% average profit margins, their highest in recent years, according to the Florida Health Market Review.

Hospital systems grew through new construction and acquisitions. The Tennessee-based Hospital Corporation of America, or HCA, one of the nation’s largest for-profit systems., and AdventHealth, a nonprofit healthcare system, led the charge in Florida, acquiring hospitals from Community Health Systems, which was once the seventh-largest system in the state, the report found.

HCA owns several hospitals in South Florida, including Aventura Hospital and Medical Center and Kendall Regional Medical Center, while AdventHealth doesn’t have a presence in the southern part of the state.

Meanwhile, the health insurance market grew significantly more concentrated in the last three years, with companies like Anthem and Blue Cross Blue Shield acquiring a number of HMOs.

On the hospital side of that equation, Baumgarten said, providers are looking to expand their geographic footprint — Jackson Health System’s expansion into Doral or Baptist Health’s acquiring facilities across Palm Beach and Broward counties — in an attempt to capture more patients and additional market share. The hospital construction boom has been aided by the Florida Legislature, which removed regulations last year requiring hospitals to demonstrate an economic demand for new facilities before construction.

South Florida hospitals recorded combined profits of nearly $1.3 billion in 2018 and have posted combined profits above $1 billion for four of the past five years, the report found. HCA hospitals were the most profitable, with a net income of $363.6 million, according to the report. Baptist Health, a nonprofit and the largest system in the Miami area, had a net income of $142.8 million and Memorial Healthcare System in Broward County, a nonprofit hospital network, had a net income of $158.6 million.

Insurance companies are also trying to expand their reach as a way of increasing their leverage in price negotiations with hospital systems. HMO plans from Blue Cross Blue Shield, Humana, UnitedHealthcare and WellCare, the four largest HMO companies, made up 64.2% of the market, compared to 51.5% two years earlier, the report found.

“And yet, at the end of the day, the trends on both sides, in terms of prices being charged by hospital systems and the premiums paid by consumers and employers, both of those remain on an upward trajectory,” Baumgarten said. “So it’s hard to see from a consumer point of view how they’re actually benefiting from these strategies.”

Jaime Caldwell, president of the South Florida Hospital and Healthcare Association, said that, despite a good year for hospitals in 2018, there is uncertainty on the horizon in how hospitals will get paid.

Caldwell described a “healthy schizophrenia” as segments of the industry move away from a “fee-for-service” model, where insurers reimburse healthcare providers for things like lab tests and procedures, to a “managed care” model, where insurers reimburse providers based on the health outcomes of patients.

That shift, Caldwell said, will complicate the race for more market share between hospitals and insurance companies.

“I don’t know where it leads to, to be honest with you,” Caldwell said. “We’re seeing more and more reimbursement is trending toward [the managed care model], so I’m not certain those market strategies will be the dominating force moving forward.”

Longman, the consumer advocate, said that South Florida .is typically a bellwether for the rest of the country, and in this case, he sees consolidation of the healthcare industry continuing until there are fewer and fewer players left on the field.

“When hospitals merge, they no longer have to compete with each other for patients. That means they are freer to raise prices,” Longman said. “Any insurance company … when they come into this particular market, there’s only one person to deal with, and so that person names their price.”

Source: Miami Herald

Jan 13 No Comments

Riding The Wave Of Surging MOB Demand

Author: Admin

Categories: Commercial News,Development,Healthcare

In a country where over 10,000 people turn 65 daily, it’s safe to say that an aging population will drive the demand for healthcare resources for years to come.

Healthcare Trust of America (NYSE:HTA) is a real estate investment trust that seeks to not only ride the irresistible wave of current demographic trends, but also aims to carve out strong footholds in markets where high tenant quality can be secured and leveraged to more profitable relationships. As the largest dedicated owner/operator of medical office buildings (MOB’s) in the U.S.,

HTA is also well-positioned to benefit from the broad shift away from expensive inpatient facilities, and instead toward more cost-effective outpatient resources, as healthcare spending already projects to account for fully 20% of GDP by 2026.

HTA currently has lots of competition in the medical property space (not just from other REIT’s either) as the sector is one of the few areas where growth is almost guaranteed to exceed nominal GDP growth for years to come. This has pushed the price of related real estate assets sky high, and has been something of a double-edged sword, because profitability on leases takes a bit of a hit as profit margins are eaten away by the rising cost of asset purchases. Fortunately, HTA‘s focus on specific markets with strong demographic dynamics, its fully-integrated property development capabilities, and prudent cost management have all combined to insulate profits somewhat more than peers. Past is not necessarily prologue, however, and challenges from interest rate volatility to changing investor sentiment and MOB demand can affect spreads, margins, and FFO numbers. With respect to HTA, I’ll look at the company’s structure, competitive position, real estate portfolio, financial strength, and underlying fundamentals of the stock to help current and prospective investors assess whether HTA is a buy at current prices, and what the long-term outlook is for the company and the stock.

(Image source: HTA 2018 annual report)

Finding its Niche

As the single largest owner of MOB’s in the U.S., HTA‘s real estate portfolio comprises 23 million sq. feet of GLA (gross leasable area), having invested roughly $6.8 billion in those properties over the last 10 years. While the firm has considerable market breadth across the country, it does try to focus on 20-25 “gateway markets” where it seeks to “build critical mass,” especially in communities with universities and large extant medical institutions. The thinking is that this strategy presents not only favorable demographic trends for local demand, but also supply in the form of skilled-labor and job growth. Consequently, the company has already started to see some of the benefits via robust long-term demand for medical office management and leasing services. Overall, the firm has an integrated asset management model consisting of on-site leasing, property management, engineering and building services, and targeted real estate development. With a focus on operational efficiency and tenant quality, HTA has sought to build lasting relationships with dependable clients, and achieve real rental growth. Management hopes this combination will lead to peer-beating value-creation in the long-run.

(Image source: HTA investor presentation)

Founded in 2006 as a private REIT, HTA went public on the NYSE in 2012. Headquartered in Scottsdale, AZ, the firm has quickly expanded as it has not only emerged from the depths of the real estate and financial crash of 2007-8, but benefited from the growth of healthcare in general, and its own target markets in particular. This concentration in a few key markets has allowed the company to build strong competitive positions within those communities, and has actually led to relatively strong operating margins. Further, management’s focus on the firm’s financial strength and liquidity has allowed for continued investment and development, leading to accretive acquisitions and leasing relationships. Those strong tenant relationships foster increased margins, higher tenant retention, better leasing spreads, and more and better growth opportunities.

(Source: Author, Benjamin Black)

The operating platform consists of four main segments, including property management, maintenance services, leasing services, and construction & development. This multifaceted approach has allowed HTA to not only capitalize on leasing and property management fees, but also build its footprint through development and property investment. While 93% of the company’s overall GLA consists of in-house property, the top 20 markets comprise 75% of GLA as well, which is actually a 12% increase since 2013 (when it was 63%). What this shows, given HTA‘s ballooning real estate portfolio during this time period, is a strengthening position in the markets it chooses to focus on. The portfolio is increasingly concentrated in large and growing markets with high MOB demand, and top markets now include Dallas, Houston, and Boston, among other expanding metro areas with favorable demographics. Specifically, HTA targets strong same property cash NOI growth.

(Image source: HTA investor presentation)

Growing the Portfolio

Since the end of 2013, HTA has doubled its portfolio in terms of GLA and property value (from $2.6 billion to $5.4 billion). Over this same period, leverage (net debt/EBITDAre) has remained fairly steady at a rate between 5 and 6X, falling at a respectable 5.8X in 2018. Cash from operations and use of the firm’s ATM equity program have largely financed the acquisitions. Solid enterprise value growth and normalized FFO growth of 27% (through 2018) help underscore the merits of a strategic focus on core-community, on-campus, and academic medical center locations. The economics and demographics of university-heavy cities favors MOB demand and related pricing. What sets HTA apart from peers is its vertically-integrated operating platform allowing it somewhat of a unique offering to customers. This has translated to success for investors in the underlying stock, as the REIT has outperformed not only broader REIT indices, but also the healthcare REIT index as well. Of course, this underlying performance does include some years as a private REIT, where returns are calculated mainly by factoring in total distributions over the period, but regardless, the 156% total return since ’06 compares favorably (bear in mind the period begins right around the height of the real estate bubble).

(Source: Author, Benjamin Black)

Healthcare delivery is expected to shift to more outpatient facilities over time due to it being more cost-effective than inpatient care. Additionally, limitations to existing hospital resources have further enhanced outpatient visit growth. In fact, inpatient visits have begun to decline in recent years, despite the growing demand for healthcare overall, which is especially beneficial to MOB operators. While demographic and industry dynamics favor the MOB REIT sector generally, HTA‘s laser-like focus on key “gateway” markets further drives growth and profitability. In addition to this, the consolidation of healthcare providers will likely lead to increased opportunities for MOB operators with scale (such as HTA).

(Source: Author, Benjamin Black)

MOB’s are desirable to providers because they help augment provider growth by helping to limit capital outlay/commitments by providing leasable properties, and also limit the volatility of cash-flows. The ability to develop synergistic and profitable relationships with strong providers depends greatly on location, barriers to entry, and operational efficiency of both the leaseholder and the property manager. That said, the MOB sector is especially fragmented, as less than 20% of the market is institutionally owned. Further, REIT’s only have an 11% share of the MOB market, which is less than private equity, developers, and providers themselves. Of that relatively small slice of the pie, however, HTA is fast becoming a dominant player.

Competitive Position

From 2012-2018, annualized FFO growth of 4.6% matches that of Welltower (NYSE:WELL), and is above peers H&R REIT (OTCPK:HRUFF) (3.3%), Ventas Inc., (NYSE:VTR) (1.2%), and Healthpeak Properties (NYSE:PEAK) (-1.7%). Same-property cash NOI growth, which I’ll refer to as SS (similar to same-store growth in retail), averaged 3% from 2013-2018, bested only by HRUFF (3.2%), and ahead of Physicians Realty Trust (NYSE:DOC) (2.6%), WELL (2.3%), VTR (1.4%), and PEAK (1.3%). Total shareholder returns meanwhile, have outpaced them all, coming in at 68% over the period (vs. a range of -6% to 54% for the previously mentioned companies).

(Image source: SEEKING ALPHA HTA STOCK PAGE)

PEAK (formerly HCP) in particular, has struggled over the last 5-6 years, and HTA may stand to benefit as a result. Note that in 2 of the last 4 quarters, SS growth fell below the REIT MOB average of 2.6%. Prior to that, from 2014-17, HTA grew cash NOI at a range between 2.8-3.3%. It has hit a low of 2.3% in 1Q18, but has since recovered to 2.7% as of 4Q18. The good news, however, is that since 2014, SS expenses for the company have actually declined, averaging -0.8% vs. an average of +0.9 to 3.4% for peers (including WELL, VTR, HCP, DOC, and HRUFF), which collectively averaged 1.75%. This disparity shows HTA‘s greater efficiency and cost management than peers. So, over the last 5-6 years overall, same-property figures look healthy, but keep an eye on the trend, and take special note of any further deterioration in NOI growth rates, or rising same-property expenses.

(Image source: HTA investor presentation)

It’s important to note that the MOB sector (and healthcare real estate investment generally), is currently experiencing a period of record low cap rates. Cap (capitalization) rates are the ratio of net operating income (NOI) to property asset value, and such rates have fallen in recent years due to high investor demand and fast-rising property values. One major reason for this trend is that health-related real estate is seen as a sector of fairly reliable growth; in fact, total number of outpatient visits has grown by almost 2% annually between 1994-2014. By comparison, over the same period, inpatient admissions actually declined by 0.67% annually.

(Source: Author, Benjamin Black)

Investor demand remains at an all-time high for healthcare real estate assets, and especially MOB’s, consequently pushing down cap rates and therefore profit margins and ROI expectations. Because healthcare is seen as one of the strongest drivers of economic growth in the U.S. going forward, investors continue to position their portfolios to reflect that trend. Total healthcare real estate volumes, though, stayed roughly the same for 2019 as 2018, mostly due to the lack of available properties, presenting an opportunity for profitable MOB development in key markets where demand is particularly robust.

And the Survey Says…

In a survey of medical real estate investors, CBRE showed that 94% of respondents favored MOB’s for acquisition, by far the highest of any building type (ambulatory surgery centers (ASC’s) were 2nd at 69%, for some perspective). These results further underscore the high continued demand for MOB’s, and the resultant tight supply-demand and pricing environment. Expected cap rates for MOB’s in 2019 are between 5-6%, which represents the lowest cap rates for all medical building/real estate investment categories, including ASC’s, wellness centers, LTC hospitals, rehab hospitals, etc. Only 2% of survey respondents felt that 2019 would see lower investor demand for MOB’s than 2018, and only 1% of respondents said that occupancy rates of their MOB portfolio had fallen from the prior year (99% said it was the same or higher). Generally, survey results show that the bulk of those asked see annual growth for medical office lease rents falling between 2-3%, largely reflective of inflation expectations and GDP growth.

(Source for the above two images: HTA investor presentation and Hammond Hanlon Camp LLC 2018 MOB report, attached at the end of the article)

In 2018, the “tightening of the spread between sales and development capitalization rates (had) many developers on edge given the rising interest rate environment.” Fortunately, interest rates have actually fallen over the last year, as the Fed has lowered the Fed Funds Rate by 0.25% on three separate occasions in the TTM period. In the 24 months between the beginning of 2017 and the end of 2018, construction costs generally increased between 15-30% (depending on the market). Despite this surge, rental increases generally kept pace with rising construction costs, as the growing economy allowed developers to pass on rising costs. Additionally, cheap credit continues to augment market growth as loan-to-value ratios remain elevated at between 65-90%, and are increasingly occurring at the higher end of that range.

The Fundamental Picture

While the healthcare industry is clearly growing (average healthcare spending per person rose 11% in 2017 alone, for example), not all MOB operators are created equal, and not all markets are especially geared towards that sector’s growth. HTA with its university-centric market approach (it targets a portfolio composition of 68% of GLA from on-campus properties, and 32% off-campus), seems to have found a profitable niche. Growing its real estate assets from $1.7 billion to $5.7 billion from 2009-2019 (12.86% CAGR), HTA has greatly expanded its portfolio and simultaneously managed to grow its FFO from $28.8 million to $317.7 million, producing a CAGR of roughly 27%. Meanwhile, management has grown overall EBITDA from $61.3 million to $416.2 million (21.1% CAGR) over the same period.

(Source: Author, Benjamin Black)

While the annual dividend was higher in 2010 at $1.46 per share (vs. $1.24 in the TTM period), the FFO payout % was also much higher, at over 85% (vs. roughly 80% today). Dividends have increased annually since 2013, but at a compound annual growth rate of only 1.26%. The P/FFO ratio is just under 20 (at 19.8), and is reasonable, if not a screaming bargain. Reflecting on these numbers, HTA‘s focus is expanding its competitive position, showing very impressive top-line growth, but due to historically low cap rates and exploding real estate costs, that is not necessarily translating to stellar profit and dividend growth.

(Source for the above two graphs: author)

The Bottom Line

While HTA is well-positioned as a leader in the healthcare REIT sector, shareholder returns will likely remain muted while asset prices and earnings multiples remain high (relative to historic norms). That said, this is a company to consider adding to your watchlist, as it is a best-of-breed operator in a growing sector of the economy in the long run. It’s a great company, but a so-so stock at the moment. If HTA were to fall 20-30% over the next few months, however, (or basically flat-line over the next 2-3 years), a reasonable and profitable entry-point would present itself, but wait for the underlying fundamentals to catch up to the price first.

*Most market and company-specific data drawn from HTA’s 2018 annual report or most recent investor presentation, found on the company’s investor website. Data used to construct graphs drawn from Seeking Alpha’s HTA stock page.

Source: Seeking Alpha

Jan 09 No Comments

Gastro Health Joins Growing List Of Tenants At Recently Completed Aventura Medical Tower

Author: Admin

Categories: Aventura,Commercial News,Development,FIP News,Healthcare,Leasing

The Faith Group has recently added another signature medical group to its Aventura Medical Tower development.

Gastro Health, which specializes in the treatment of gastrointestinal disorders, nutrition and digestive health will be taking a 2,000-square-foot space in the Class A medical office building located within the Aventura Hospital district.

FIP Commercial represented the Landlord in the transaction and Carol Ellis Cutler of CBRE represented the tenant.

“As a result of having the Gastro Health Group in our other medical building in North Miami Beach (Venture Center), there was a great working relationship already in place and it made perfect sense to have them as part of the tenant mix in our Aventura Building,” commented FIP Commercial President/Broker Roy Faith. “Our in-house construction division will be handling the build out from A to Z and we are excited to deliver an exceptional space to them as soon as we can. There will also be some exciting announcements made in the next few weeks as to who else will be joining the building.”

Aventura Medical Tower was recently completed as a true Class A medical condo building and some purchase and lease opportunities remain. Please contact FIP Commercial for more information at 305.438.7740 or contact Roy Faith at Royfaith@fipcommercial.com or Julian Huzenman at Julian@fipcommercial.com.

Jan 07 No Comments

Berkadia’s Charles Foschini On The Florida CRE Market

Author: Admin

Categories: Commercial News,Development,Healthcare,Leasing,Multifamily,Offices,Trends

Berkadia’s active presence in Florida’s CRE debt scene owes no small part to Charles Foschini, who co-heads its originations in the state from the company’s office in downtown Miami. The University of Miami graduate, who spent nearly two decades at CBRE, has led some of Berkadia’s biggest Florida deals since he joined the company in 2016. Among them is a $121.5 million acquisition loan that helped Parkway Properties and Partners Group buy a set of six Tampa office buildings late last month. The firm has also been a key player in multifamily capital markets, putting it on the cutting edge of Florida’s changing demographics.

Foschini spoke with Commercial Observer by phone to discuss everything from the Sunshine State’s sunny skies to its business climate, transportation struggles and even its school system.

Commercial Observer: In a nutshell, what are your responsibilities at Berkadia?

Charles Foschini: I co-lead Florida operations in both a management and production role. I focus on a group of clients [for whom] I do a fair amount of their business … and that runs the gamut of any of their capital-market needs, from permanent loans to construction loans to bridge loans.

Florida’s shown a lot of momentum lately — throughout the state, but particularly around Miami. What do you see as some of the driving factors?

When I studied at the University of Miami, it wasn’t lost on me that the temperature was 78 degrees all the time. It’s a very enviable place to live, work and play. But you have to layer over that that our last two governors [Ron DeSantis and Rick Scott] have been very pro-business. We’ve had a lot of growth in the medical sector and a lot of employment growth. It’s not just a tourism economy anymore.

Berkadia has been a force behind some significant multifamily debt deals in the state this year. How is the state’s apartment market evolving?

We’re seeing unrelenting population growth and immigration to the state, and we’re seeing a continued evolution of employment. Some of the bigger submarkets have a lot of transportation challenges. Those factors have formed a confluence to create a need for multifamily near where people are going to work. That’s created a lot of new developments in suburban and urban markets. What’s more, the individual credit consumer has been harder to come by: Not as many people have been buying houses in this cycle. That has created a renewed demand for lifestyle residential, where people can get all the amenities that you couldn’t frankly afford or justify in your own home.

Reforms to Fannie Mae and Freddie Mac have been a never-ending discussion in Washington. Do you have any concerns?

Fannie and Freddie have been market leaders in multifamily finance, and they have very healthy allocations for 2020. I expect that to continue. But having said that, the economy and capital market side is extremely vibrant. You have CMBS lenders, banks, life companies and debt funds, all of which are available to a borrower in any given transactions. They’ll continue to have a significant market share in multifamily, too.

You mentioned some transportation challenges. Do you think the state’s urban areas need to become more commutable?

The demand for a live-work-play lifestyle is fueled both by millennials as well as those folks that are selling homes and moving back to the cities. They want to have everything in one place. The new Brightline train [which now connects Miami and West Palm Beach, Fla.] is so much more convenient than it was 20 years ago when you had to get in your car and commute. As South Florida and particularly Miami evolve as 24-hour cities, that means you have 24-hour traffic. Mass transit is a solution to that.

You mentioned that the state’s politicians have fostered a business-friendly reputation. How specifically has that helped drive new investment in the state?

One of Berkadia’s technology tools looks at IRS tax payments from one year to another. You can pick somewhere in the Northeast — anywhere in the Northeast — and look at the tax migration. For example, if you paid your taxes in 2018 in Connecticut and then in 2019, you paid your taxes in Florida, that net migration has been measured, potentially, in billions of dollars, and that’s continuing. In many cases, the Northeast is losing out to where it’s easier to live, easier to do business and where overall taxation on the same work dollar is lower. Florida is a huge beneficiary of that. Then there’s the fact that submarkets like Orlando and Tampa have very, very nice campus-style offices that rent for a lot less per square foot.

People often speak of talent pools as one of the deepest strengths of gateway cities like New York and L.A. How is Florida doing on that front?

I would say it’s evolving, and not fast enough. Our private school systems are exceptional. The Florida state schools are getting better. Five years ago, most of them didn’t have real estate programs, but now they all do. But the public school systems here for primary grades are not evolving fast enough. As our population grows, they’re not evolving at a pace to support that population. So that’s a challenge that municipalities continue to address.

Source: Commercial Observer

Jan 03 No Comments

Hospitals Across US Investing In Real Estate To Help With Homelessness, Mental Health

Author: Admin

Categories: Development,Healthcare,Trends

Some hospitals are getting into real estate.

The reason? Cut skyrocketing healthcare costs and improve patients’ prognoses.

Peg Burnette, Chief Financial Officer at Denver Health, says they have about 30 patients a month who do not have somewhere to go after treatment at the Level 1 trauma center. Reasons range from homelessness, to dementia, mental health and other problems. Having a safe discharge is required. Generally, hospitals cannot simply push patients out the door because of ethics, malpractice and Medicare rules.

“Insurance will not pay after a patient’s immediate needs have been treatet,” Burnette says, “We could be receiving revenue from a patient who needs hospitalization, but instead. we’re covering the cost of that patient occupying a bed.”

That means fewer available beds to the community when someone cannot be discharged.

Denver Health has partnered with Denver Housing Authority to renovate and reopen a dormant building on the hospital campus. When complete, it will be low income senior housing, but a floor will be leased back to the hospital. Fifteen units will be dedicated to people occupying beds at Denver Health. After their hospital stay, they will be temporarily placed on the floor, while permanent housing is coordinated.

Each stay runs an average of $2,700 a day at Denver Health. As a safety net hospital, it has a mission to take care of all patients, regardless of ability to pay. The hospital has crunched the numbers. Providing transitional housing will save quite a bit, considering patients in limbo have overstayed anywhere from a dozen to more than a 1,500 extra days. Temporary housing will cost $10,000 a year, per resident.

“The first step is to identify those in unstable situations,” Denver Health Hospitalist Physician Dr. Sarah A. Stella said. “Information given at admission can be inaccurate and the signs are not always obvious. They know you can’t fix it, but they appreciate being asked. And asking about that leads us to take better care of people. Recovery continues after the hospital stay. It can be much more difficult to heal or manage chronic conditions if patients are worried about their next meal or sleeping on the street. When I see patients who are controlling their diabetes or doing a pretty good job of it, despite their homelessness, I want to give them a big hug. I want to give them a medal, because that is really an impossibility.”

University of Illinois Hospital & Health Sciences System (UI Health) has also put money into the housing problem. Its Better Health Through Housing partnership with the Center for Housing and Health started with $250,000. It works to move patients from emergency rooms into housing with “intensive case management.” The pilot started with 26 patients and by next year, it expects to house 75 patients.

Dr. Stephen Brown, Director of Preventive Emergency Medicine at University of Illinois Hospital in Chicago, echoed the same concern as Dr. Stella in Denver.

“Homelessness tends to be invisible in health care,” Dr. Brown said.

Brown noted that hospitals operate on thin margins and do not go looking for problems,

“But if you begin to document it, you will find it. And if you find that, you have to do something about it,” said Dr. Brown.

The hospital went through its records dating back to the late 1990s and found evidence of 10,000 patients believed to be homeless. According to research cited in a report by the American Hospital Association (AHA), health inequities are projected to cost the health care system $126 billion by 2020.

“On average, those with unstable housing have a life expectancy 27 years less than those with stable housing.” says AHA Chief Medical Officer Dr. Jay Bhatt.

AHA’s Hospital Community Cooperative Program is working in 10 markets across the country to address social needs.

“Investing in housing solutions could help cut down on burnout among providers because care teams can see patient success,” Bhatt adds,

As for the future of programs like the one in Chicago, Brown said he envisions coordinated care across the criminal justice system, first responders, city agencies and more.

“We’re just a hospital and we’re a player in this,” Brown said. “But it really requires a cross-sector approach to solving this really kind of wicked problem in society.”

In the end, these initiatives can save money for all patients and taxpayers.

“When we have patients who we don’t have funds to cover, we have to receive more money from insurance and there’s been a lot of talk about the cost shift,” Burnette said. “As consumers, we want to pay lower premiums and I think this is a good way to start to get at that issue.”

Click here to view Fox News video ‘Hospitals Across The Country Look To Expand Housing For Homeless Patients‘

Source: Fox News

Dec 20 No Comments

A Trend Is Breathing New Life Into Big, Empty Department Stores

Author: Admin

Categories: Healthcare,Retail,Trends

Turning abandoned mall space such as the closed Sears store in the RedBird development in Dallas into medical offices and clinics is a new use for tired shopping centers that has already found success in other cities.

RedBird owner Peter Brodsky just announced that UT Southwestern and Parkland Hospital are taking over vacant retail space at the former Red Bird Mall. UT Southwestern will open offices in a 150,000-square-foot Sears store that closed earlier this year. About 43,000 square feet of a Dillard’s store that closed in 2008 is already being retrofitted for Parkland.

Dallas developer Frank Mihalopoulos, who has been working with Brodsky since 2015 on the RedBird project, has already successfully adding university-affiliated medical offices to aging malls in Nashville; York, Pa.; and Atlanta.

“Selling the RedBird development to local health care companies became a priority as community needs and wishes matched up with trends in the mall redevelopment business,” Brodsky said.

“Health care companies want to reach underserved populations and are trying to find ways to serve more people with the least amount of cost,” Mihalopoulos said. “Repurposing mall space can keep costs down. The University of Pittsburgh Medical Center, for example, has opened occupational therapy clinics and back offices in 22,000 square feet of the West Manchester Mall in York, Pennsylvania It’s lowered their overall cost of occupancy, and then the university medical center is able to rent its space that can fetch higher rents to others.”

In Atlanta, Emory Healthcare agreed in October to lease 224,000 square feet of a former Sears store at Northlake Mall to house offices for 1,600 administrative staff. That also adds daytime traffic to the mall, which is anchored by J.C. Penney and Macy’s. Northlake and the mall in Pennsylvania are owned by ATR Corinth, a partnership of Mihalopoulos and Dallas real estate investor Tony Ruggeri formed 15 years ago to redevelop ailing malls.

“Mall locations have a lot of what medical clinics and offices need,” Mihalopoulos said. “There’s parking, good real estate with good exposure to freeway locations. Old department stores have high ceilings that office tenants are looking for these days and those new office workers can shop and eat without leaving the property.”

ATR Corinth’s first big success was in Nashville, where Vanderbilt University Medical Center put administrative offices and medical clinics in One Hundred Oaks Mall.

“That project began in 2008, and within five years of the redevelopment, the stores in the center had experienced sales increases of as much as 100%,” Mihalopoulos said.

While they were considering the RedBird development, UT Southwestern officials visited that project. They also visited the Jackson Medical Mall in Mississippi, which was converted from a shopping mall in 1996 after it lost customers and stores to a newer mall in Jackson.

At that point, Red Bird Mall was also well into its decline. The former mall at the intersection of Highway 67 and Interstate 20 in Dallas was one of the early shopping center casualties. Several Dallas mayors and out-of-town owners tried to fix the center as the mall continued to lose traffic. There are 800 vacant anchor spots at the 1,300 malls and outlet centers in the U.S., according to an updated mall report from Green Street. In addition to health care uses, malls have been turned into call centers and even Amazon warehouses. When Brodsky first purchased the mall, Sears and Macy’s were still open.

“But it became apparent that anchor stores would have to be filled with other sorts of activities to draw people to the property,” Brodsky said. “The shopping center still has about 60 tenants, from Burlington Coat Factory to small mom-and-pop businesses that are doing well. A Foot Locker is under construction in a new green space being built on the Camp Wisdom side where Starbucks opened last year. I’m new to the real estate industry and I give Frank a lot of credit for his track record of converting malls into highly productive office space.”

Source: Dallas News

Dec 11 No Comments

Medical Office Building Investors Will Be Chasing Deals In 2020

Author: Admin

Categories: Commercial News,Development,Healthcare,Trends

As we prepare to swing into the new year, the outlook for the medical office sector is good…largely.

Underpinning the market, as it always has, is the continual aging of the population and the increased medical services that come along with it.

But, despite this sure-bet demand, the sector is not without its challenges, as Al Pontius, SVP and national director of Marcus & Millichap’s Office and Industrial divisions, makes clear. Those concerns arise as a result of the massive industry trend toward consolidation and the move on the part of many formerly independent care providers to saddle up with national care brands.

The firm’s second-half Medical Office Buildings Report defines the growth of the merger movement:

“Hospital and health-system merger activity continues to transform the medical office sector, driving a reduction in physician-owned practices in recent years. In 2012, nearly half of locations were physician-owned practices, but in 2018, just 31 percent were owned by doctors.”

And therein lie the concerns for the existing stock of medical office buildings (MOB).

“There’s a lot of older-vintage product that’s not located where the health systems want to be,” says Pontius. “Some assets may not accommodate the desired configuration of services that the major health systems see as appropriate, modern enough or technologically supportive enough. Consequently, there are a number of buildings that will under-perform relative to newer properties in the sector as well as other asset classes.”

But while there might be assets that sit on the sidelines as healthcare needs grow, few investors, be they institutional or private, are doing the same.

“The consolidation has supported investor sentiment as major providers create efficiencies and broaden service coverage,” says the report. “A sizable pipeline of new space and major expansions by high-credit tenants will sustain elevated investment activity through the end of this year.”

Source: GlobeSt.

Dec 04 No Comments

Why Has Medical Office Captured the CRE Spotlight?

Author: Admin

Categories: Healthcare,Trends

Medical office has captured the real estate spotlight as the sector continues to see strong investment sales with large hospitals buying up doctor practices, and the development of off-campus patient facilities takes off, Mitchell Yankowitz, managing partner at Medical Asset Management, a medical real estate advisory firm, tells GlobeSt.com.

Nationally, there has been a lot of consolidation and acquisitions of smaller doctor practices in the market as larger healthcare institutions seek to bulk up on assets that could serve as outpatient facilities to offer quicker and better quality care in a cheaper and more streamlined way, Yankowitz said.

“Healthcare has gotten so expensive, health care providers are exploring ways to become more efficient without compromising patient care,” he said.

Hospitals such as Mount Sinai Health System in New York and UCLA and Cedars-Sinai Medical Center in California are examples of larger hospital systems gobbling up smaller institutions to absorb their cash and private insurance patients.

Mount Sinai recently announced it was turning its attention to managed care and outpatient facilities as the firm aims to capitalize on the estimated $193 billion New York spends on healthcare annually. By the end of 2020, the health system will complete a full merger with St. Luke’s Roosevelt, Beth Israel Medical Center, and New York Eye and Ear Infirmary of Mount Sinai into Mount Sinai Hospital, according to a Politico New York report.

And as the delivery of healthcare moves away from the traditional on-campus hospital setting, the demand for new construction for medical outpatient facilities has skyrocketed, according to a recent GlobeSt.com article.

Of the new medical office construction to come online this year, 70% has been for off-campus facilities, specifically for infill locations with retail-like characteristics, very different than previously sought assets for medical office use, according to R.J. Sommerdyke, vice president of acquisitions with Meridian, a developer and owner of medical office real estate with offices in Newport Beach and San Ramon, California, plus Phoenix, Dallas and Seattle.

Outpatient facilities have proved efficient and convenient for hospital systems to provide care in a smaller and personable setting, which has become key because the competition between care providers has grown intense in recent years with more options for patients to seek care.

“Up until recently hospitals didn’t look at patients as customers and now its different because of technology and more competition, people have choices,” Yankowitz said.

Source: GlobeSt.

Nov 18 No Comments

South Florida: A Center For Hemispheric And Global Health Care

Author: Admin

Categories: Commercial News,Healthcare

By the time a foreign cardiac surgeon is standing side by side in the operating suite with Joseph Lamelas, M.D., to learn how to perform the minimally invasive cardiac surgery Lamelas perfected, that physician would have spent six months on a waiting list to do so.

That’s the allure and importance of training with University of Miami Health System’s chief of cardiac surgery. Whether to train the next generation of world physicians, or receive premier care, health care that reaches the hemisphere and beyond is a significant driver to the South Florida economy.

So much so that 2016 figures from Florida Tax Watch and the Agency for Health Care Administration found that medical tourism brings some $6 billion to Florida and “medical tourism” is a destination feature listed by the Greater Miami Convention & Visitors Bureau.

More than cosmetic procedures, however, patients seeking treatment and medical students hoping to advance their training are finding care and training that can be scarce in the region.

“UHealth delivers such care from locations in Miami-Dade, Broward, and Palm Beach counties, as well as elsewhere around the state,” says Chad Ritch, M.D., associate co-director of UHealth International at the University of Miami Health System.

Baptist Health International, a division of Baptist Health South Florida, served some 12,000 individuals, executives, and families in 2018. The recently opened Hilton Miami Dadeland hosted international patients visiting Miami for treatment. The network recently expanded into Broward and Palm Beach counties.

“Miami-Dade county-run Jackson Health System sees about 3,000 international patients annually,” says Diamela Corrales, director of the international programs and guest services division at Jackson Health System. “By treating major medical specialties such as trauma, neonatology, rehabilitation, transplant and neurosurgery, care is provided to patients hailing from locales where this type of medical technology and advances are not readily available.”

Certified translators at Hollywood-based Memorial Health System, which includes five hospitals plus Joe DiMaggio Children’s Hospital, all operate under the provider’s Global Health Initiative, first launched in 2013. Translators versed in 160 languages allow doctors to converse with patients and consult with fellow physicians in real time on-site or abroad.

Not included in this activity are advancements in health care technology, like those from Sensus Healthcare, Inc., the maker of non- and minimally-invasive treatments. Health tech, medical device and life science startups drive a third of all venture deals in South Florida in 2019, up from less than a quarter in 2018, according to the biannual “eMerge Insights” report.

Source: Florida Trend

Nov 11 No Comments

Co-Working Medical Office Space Operators Plans Major Expansion In Florida

Author: Admin

Categories: Commercial News,Healthcare

ShareMD, a San Diego-based investment firm led by President and managing partner George Scopetta, is looking to purchase medical office buildings throughout the Sunshine State’s major cities and convert vacant space into its co-working concept. The group has already purchased two buildings, one in South Miami and another in Coral Gables, where it plans to launch the operation in Florida.

The Bilmore Professional Building, located at 475 Biltmore in Coral Gables, Florida, a medical office building totaling ±51,423 square feet, and SOMI Center, a ±50,000-square-foot Class A mixed-use building located at 5966 S. Dixie Highway in South Miami, Florida were purchased by ShareMD for $33,152,500.

The transaction closed October 31.

In Southern California, ShareMD has locations in La Jolla, San Diego, Encinitas, Temecula, Oceanside and Los Angeles.

The company operates as WeShareMD, but is in the process of changing its name. It offers fully furnished medical office space and patient rooms available by the half-day, day, week or month, according to its website. Locations also have private storage areas, meeting space and common waiting rooms.

Source: The Real Deal

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Hospitals Across US Investing In Real Estate To Help With Homelessness, Mental Health

“Insurance will not pay after a patient’s immediate needs have been treatet,” Burnette says, “We could be receiving revenue from a patient who needs hospitalization, but instead. we’re covering the cost of that patient occupying a bed.”

“Homelessness tends to be invisible in health care,” Dr. Brown said.

“But if you begin to document it, you will find it. And if you find that, you have to do something about it,” said Dr. Brown.

“On average, those with unstable housing have a life expectancy 27 years less than those with stable housing.” says AHA Chief Medical Officer Dr. Jay Bhatt.

“Investing in housing solutions could help cut down on burnout among providers because care teams can see patient success,” Bhatt adds,

“We’re just a hospital and we’re a player in this,” Brown said. “But it really requires a cross-sector approach to solving this really kind of wicked problem in society.”

“When we have patients who we don’t have funds to cover, we have to receive more money from insurance and there’s been a lot of talk about the cost shift,” Burnette said. “As consumers, we want to pay lower premiums and I think this is a good way to start to get at that issue.”

A Trend Is Breathing New Life Into Big, Empty Department Stores

“Selling the RedBird development to local health care companies became a priority as community needs and wishes matched up with trends in the mall redevelopment business,” Brodsky said.

“That project began in 2008, and within five years of the redevelopment, the stores in the center had experienced sales increases of as much as 100%,” Mihalopoulos said.

Medical Office Building Investors Will Be Chasing Deals In 2020

“Hospital and health-system merger activity continues to transform the medical office sector, driving a reduction in physician-owned practices in recent years. In 2012, nearly half of locations were physician-owned practices, but in 2018, just 31 percent were owned by doctors.”

“The consolidation has supported investor sentiment as major providers create efficiencies and broaden service coverage,” says the report. “A sizable pipeline of new space and major expansions by high-credit tenants will sustain elevated investment activity through the end of this year.”

Why Has Medical Office Captured the CRE Spotlight?

“Healthcare has gotten so expensive, health care providers are exploring ways to become more efficient without compromising patient care,” he said.

“Up until recently hospitals didn’t look at patients as customers and now its different because of technology and more competition, people have choices,” Yankowitz said.

South Florida: A Center For Hemispheric And Global Health Care

“UHealth delivers such care from locations in Miami-Dade, Broward, and Palm Beach counties, as well as elsewhere around the state,” says Chad Ritch, M.D., associate co-director of UHealth International at the University of Miami Health System.

Co-Working Medical Office Space Operators Plans Major Expansion In Florida

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