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Medical Firms Lose Costs with Local Management

CHICAGO-A survey of 40 health care systems by Jones Lang LaSalle revealed that the 20% that centrally manage real estate profit by almost 4%, while those that don’t had losses of 0.3%.

By Robert Carr | Updated on October 09, 2011

CHICAGO-Health care facilities tie up 40% of their costs in real estate and facility management, yet only a small fraction have centralized their approach to real estate activities, according to a new study by Jones Lang LaSalle. Most medical agencies still handle all property decisions at individual building levels, increasing costs across the board, according to JLL’s Healthcare Solutions group.

Locally based JLL surveyed 40 health care systems that generate about $140 billion of the $1.3 trillion of US health care spending, and found that only seven of the firms strategically manage property assets. However, of the systems surveyed, those seven firms had an average operating profit of 3.9%, while those that didn’t had an average operating loss of 0.3%, according to the survey. The properties surveyed are mostly east of the Mississippi River, and run from Beaumont Health System in Michigan to Broward Health System in Miami.

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