South Florida Hospital News
Saturday October 31, 2020
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June 2010 - Volume 6 - Issue 12
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The Future of Medical Office Buildings

Over the next few years healthcare reform and its effect on healthcare systems will put medical office use in high demand.

More than 46 million Americans are currently without health insurance coverage. Attributing factors of rising healthcare costs and lack of access have forced many individuals to forgo preventative care or early diagnosis and, instead, to wait until the ailment had become acute. The recently passed healthcare reform package aims to reduce these costs and increase the health insurance coverage rate from 84 to 95 percent of the population. With costs declining and access to healthcare expanding the result will be a major surge in the use of primary and specialty care physicians, the first stop on the road to well being.
 
This demand will no doubt foster a need for additional medical professionals which means a need for additional medical office space. Studies have indicated that, when viewed from the perspective of office space required per covered individual, the passage of healthcare reform would require anywhere from 25 million to 61 million square feet of medical office space.
 
Medical office buildings will play a vital role in the delivery of medical services for both physicians and hospitals as the healthcare systems adapt to provide services due to an anticipated increase in utilization. Physician offices will need to be designed to maximize efficiency and dedicate more space to patient treatment areas and exam rooms in order to accommodate more patient volume per physician. Medical offices will also have to be designed to integrate the emergence of electronic medical records which will mean less office space needs to be dedicated to file storage. However, additional design considerations will be required to facilitate the electronic hardware and connectivity required to implement this technology.
 
The changes in the healthcare system created by the new legislation will also pressure independent physicians to more closely align themselves with hospitals in many cases through direct employment thereby giving hospitals more control of the continuum of care. In addition, healthcare services that have traditionally been offered in a hospital setting are shifting from an inpatient to an outpatient focus. The most successful MOBs both on-campus and off-campus will be affiliated with hospitals or at least have hospital services and physicians as tenants in the building. On-campus MOBs are the most cost-effective sites for specialty and critical care delivery as healthcare systems struggle to meet increased demands while trying to control costs.
 
Many new hospital facilities contain fewer than 100 beds, compared to past counts of over 700, necessitating off-site services such as Ambulatory Care Centers, Surgery Centers, and Imaging and Diagnostics Services. By comparison off-campus office locations will be beneficial for primary care and internal medicine physicians so that they will be in closer proximity to their patient base.
 
Although it is still unclear what the future holds for healthcare reform, it is certain that it will have lasting effects on medical real estate. As hospitals and physicians navigate through changing healthcare real estate landscapes they will no doubt look to companies with expertise and capability. The Management Services Group of Health Care REIT, Inc. has over 25 years experience in medical real estate management, leasing and development of medical office, acute care and outpatient facilities nationwide. We understand the complexities of healthcare systems and how legislation impacts the use of real estate for healthcare delivery.
Michael A. Noto is Senior Vice President of the Management Services Group of Health Care REIT, Inc. He can be reached at mnoto@hcreit.com.
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