Feature Story: Where do HRE opportunities lie in the next decade?

ASCs and ‘intermediate acuity services’ will lead growth, consultant Sg2 says

By John B. Mugford

Everyone knows about the troubles facing large health systems as they try to keep their hospitals up to date and vibrant while seeing the need to move as many low-acuity procedures and surgeries to outpatient facilities as possible – even though by doing so they receive less in reimbursements.

At the same time, these same systems, which now employ a large share of the country’s primary care doctors, are facing increased competition from the likes of Amazon, Walmart, Google, CVS and others, all of whom are doing their best to get into the delivery model by providing inexpensive, efficient and convenient care.

On top of this, Amazon is one of a few disruptive new healthcare providers that allow patients to order tests online, receive the results and get a prescription without ever having to visit or even teleconference with a physician.

So what’s a health system to do in order to survive and compete in such a healthcare marketplace?

This was one of several topics addressed Oct. 15 by a pair of healthcare consultants during a session at the 2019 Real Estate Healthcare Symposium, an event that focused on the future of healthcare and healthcare real estate for health systems, physician practices and service providers. It was organized by BOMA/Suburban Chicago and the Association of Medical Facility Professionals.

The consultants who gave the presentation and offered their insights are both with Skokie, Ill.-based Sg2 LLC, a firm that provides “analytics, intelligence, consulting, and educational solutions to the healthcare industry.” The consultants are Lisa Slama, associate principal, and Jim Jacobsen, national VP.

Their presentation was titled: “Growth Opportunities Across the System of Care: Predicting Future Utilization in Health Care.”

Their presentation’s theme indicated that the key for health systems to survive and perhaps grow in the future is to determine how to provide their services in the best and most-efficient manner, both “in terms of how it’s being delivered and where it’s being delivered,” Ms. Slama said. “And they need to fully understand what healthcare’s biggest threats are. So many health systems have been … trying to protect against inpatient market share shifts, protecting their acute-care assets, when in reality a lot of the threat of healthcare is across the entire continuum.”

In order to remain competitive among all of the new threats to the status quo, health systems need to take necessary steps, such as working with a consulting firm or conducting their own, rigorous studies to optimize “their current space,” Ms. Slama told the audience.

When it comes to their hospitals, health systems are “are not necessarily building new, but they want to make sure that every single square inch of their facilities are used in the most effective way possible.” She noted that hospitals are not necessarily going away, as a 2 percent growth rate is projected for hospital utilization in the next decade, but there will not be much new growth in terms of new beds or inpatient facilities.

When it comes to utilizing outpatient facilities, it’s important to know the growth projections for every service line a health system provides.

“A big part of a health system’s investment strategy, of course, is about where they put a stake in the ground and where they invest their dollars in real estate, right?” Mr. Jacobsen said, adding that health systems also need to know precisely what services to offer in such facilities.

That led the consultants to talk about outpatient facilities, what service lines health systems should offer in them and where opportunities will lie for development and other HRE firms.

Ms. Slama noted that plenty of growth – a projected 12 percent during the next decade — will continue to be seen in