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Feature Story: Health systems are hurting

Hospitals ‘have taken a pounding’ but remain optimistic, InterFace panelists say

By John B. Mugford

The Feb. 1 InterFace Healthcare Real Estate West panel discussion titled “What Do Hospitals & Systems See Coming in 2023?” included (from left to right): Michael Hunn of Hunn Group, Steven Stubbs of Adventist Health, moderator Angie Weber of CBRE, consultant Margaret R. Peterson, Karen Costello of Hoag Health System and Ed King of Nacogdoches Memorial Hospital. (Photo courtesy of InterFace Conference Group)

For one prominent West Coast health system, the current economic climate and healthcare landscape are presenting a bit of a dichotomy.

On one hand, the system is certainly struggling financially as it emerges from the hardships of providing care during the COVID-19 pandemic, and as it contends with rising costs and still-low reimbursement rates.

On the other hand, however, it remains optimistic about the future, believing that even 2023 will be a better year to garner more business and added revenue as it recruits new physicians and expands its service lines in specific geographic locations.

The system is Roseville, Calif.-based Adventist, which operates 21 hospitals “up and down” the West Coast, including a hospital in Hawaii, according to Steven Stubbs, regional director of clinic and ancillary development/business development.

The system’s strategy in the future could provide opportunities for third-party healthcare real estate (HRE) firms.

“In our more urban settings, we’re going to go back to the smaller projects … focused on cardiology, cath labs and possibly adding some ASCs,” he said, referring to ambulatory surgery centers. “We’re probably not at the point where we’ll be … personally financing (any large medical office projects), as we’re in a partnership mode.

“The other thing is … we will probably look at some monetization of projects going forward. Where I see it on the business development side, there’s still very much a high demand (for our services).”

Mr. Stubbs was part of a panel discussion focused on the financial state of hospitals and health systems during the 13th Annual InterFace Healthcare Real Estate West conference, held Feb. 1 at the Omni Los Angeles. The session was titled, “What Do Hospitals & Systems See Coming in 2023?”

The moderator, Angie Weber, first VP in the Greater Los Angeles office with CBRE Group Inc. (NYSE: CBRE), said that

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