BY SHAWN JANUS AND STEPHEN NEWBOLD
AUG 3, 2022
Inflation Compounds Healthcare Cost Concerns
Cost containment has long been a core issue for the U.S. healthcare industry. Consumer Price Inflation (CPI) has ramped up to a four-decade high. When combined with reimbursement concerns, healthcare providers’ ability to drive down costs and sustain profit margins is increasingly challenged.
Rising CPI is also impacting the medical office sector. On the supply side, rapidly rising material costs and labor shortages are causing delivery delays and extended fit-out periods for new properties. In addition, the Fed’s aggressive stance on raising interest rates to curb inflation is causing investors to reconsider their real estate strategies. However, investor demand for medical office assets remains strong.
In this report, we address the dual impact of high inflation on the healthcare industry and medical real estate and provide insights about the future.
Shawn Janus | Colliers | Chicago – Downtown
National Director, Healthcare Services
Stephen Newbold | Colliers | Washington, DC
Director of National Office Research
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