Dolce: Where will all of the additional primary care doctors be housed?

Brennan: According to a recent Wall Street Journal report, we have almost 353,000 primary care physicians in the US, and need 45,000 more by 2020, plus another 150,000 by 2035. This has already resulted in extra pressures on Academic Medical Centers/Schools of Medicine to expand the number of residents that the schools are turning out annually. This will result in the need for expansion of educational facilities, as well as nursing schools. We are also seeing expansion of programs that allow foreign-trained physicians to become accredited in the US at some level in return for providing primary care in rural or urban areas.

Dolce: How will the “meaningful use” provisions of the Patient Protection and Affordable Care Act affect the real estate market?

Brennan: One of the major provisions of the PPACA reform is to move the majority of the healthcare system patient records to electronic health records. There are significant bonus payments and penalties for achieving the goals established in the bill. Its impact on real estate is simple: There will be a huge demand for health information exchanges, or data centers, that are essentially repositories of data from all the health care systems’ electronic records. These facilities will need to allow a variety of EHR software systems to converse with one another. Much of the spending in health care for the next few years will be on IT Infrastructure.

Dolce: What role will developers play as a result of HC reform?

Brennan: Hospital systems will be looking for ways to speed up their projects in order to accommodate the potential wave of uninsured patients. Therefore they may look outside of their traditional business models for procuring facilities. This would include both system-owned land with developer-built projects, developer-led projects adjacent to existing facilities, conversion of developer-owned properties from one use to another, and more public/private partnerships.

Dolce: What is an “accountable care” organization and how are facilities affected by this concept?

Brennan: The best analogy I have seen was a report on NPR, which I will paraphrase here: Think of it as buying a television, said Harold Miller, president and CEO of the Network for Regional Healthcare Improvement and executive director of the Center for Healthcare Quality & Payment Reform in Pittsburgh. A TV manufacturer like Sony may contract with many suppliers to build sets. Just as Sony does for TVs, an ACO would bring together the different component parts of care for the patient--primary care, specialists, hospitals, home health care, etc.--and ensure that all of the “parts work well together." The problem today, he added, is that patients are getting each part of their health care separately. People want to buy individual circuit boards, not a whole TV. If we can show them that the TV works better, maybe they'll buy it, rather than assembling a patchwork of services themselves. But ACOs will need to prove that the overall healthcare product they’re creating does work better and costs less in order to encourage patients and payers to buy it.

What affect does this have on real estate? Well, it means that these accountable care organizations will be looking for ways to optimize their existing operations, including facilities. Consolidating overlapping services, creating space for collaboration, developing facilities to track patients both within the hospital and after they go home.

Dolce: Are there some interesting approaches to reducing costs in the new generation medical real estate?

Brennan: In the hospital setting, there is a movement to use technology such as RFID tagging to monitor patients, staff, supplies and equipment to improve overall efficiency. A recent pilot program by GE at Mount Sinai in New York City claimed that they have been able to increase bed utilization from 85% to 95% using this approach. To imagine this concept, it is a central monitoring area like the FAA control tower, where staff members monitor all movement within a hospital. This can improve overall efficiency, patient and staff safety, as well as potentially reduce the need for support space such as storage. It allows the hospital to maximize deliveries on an as-needed basis. While this sounds like less space, it actually means different space, renovation to create the control center, installation of RFID and other similar systems and more, less expensive, offsite warehouse space to centralize a hospital systems support functions.

In the medical office building setting, we are seeing clients consider eliminating physician offices and creating red-carpet rooms for physician consultation. Or if physician offices are provided they are being set up to be easily converted to future exam rooms. Standardization of exam room size now accommodates different specialties, and accommodates more mobile equipment. We are also seeing longer hours, extended hours or weekends to use existing assets more effectively.

In retail settings, growth of urgent-care and mini-clinics will continue to reduce costs, capture patients more efficiently and utilize less-expensive labor.

In the home, adaptation of houses to allow patients to remain at home and be monitored by either the doctor’s office or the hospital via telepresence, telemedicine, teleradiology, smart bandages, mobile monitoring, etc.