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Why Understanding Data is Key in Meeting Today’s Healthcare Real Estate Needs

  by Megan Headley | June 20, 2016

As healthcare systems adapt to today’s leading facility trends—focusing on outpatient facilities and improving satisfaction with existing facilities—they’re finding it more critical than ever to improve their decision-making by utilizing strong data. Speed to market, operating savings and a strong competitive edge are all critical in this environment, and meeting these needs requires that real estate and facilities professionals have a thorough understanding of their system’s mission and their market’s needs.

This was one theme underlying the Health Care Institute’s Healthcare Real Estate conference on June 8 in Washington, D.C.

The need to improve business decisions

In the opening presentation on shifts in the industry since the implementation of the Affordable Care Act, Mike Wood of Oldcastle and HCI president, noted that it is more crucial than ever that health systems—and facilities professionals—sharpen their business strategies.

As a result of ACA, Wood said, "CFOs are watching the pot of available income shrink as the need [for capital] goes up.” While aging infrastructure and a new need to add buildings in the community are adding to costs, facilities and real estate professionals are in a strong position to provide CFOs with information that can lead to cost savings and improved patient satisfaction.

For example, Wood noted, one downstream effect of ACA is that every department is being pushed to be more efficient. Facility managers are in some cases being asked to contribute up to 30 percent reductions in operating expenses through energy and water efficiencies.
However, it’s nearly impossible to be innovative in cost solutions for healthcare facilities struggling to keep up with basic maintenance, pointed out James Lee, CFO of Adventist Healthcare, in a case study on the system’s facilities and real estate integration.

Lee shared that when he joined Adventist, the facilities department had little authority to make big change, no standard operating procedures, and lots of projects that never got closed out. As a result, deferred maintenance issues accrued and building systems got little attention from the C-suite.
Lee wanted to get access to capital for improvements by implementing energy efficiency improvements that would lead to cost savings. They began using technology to watch energy use in real time—rather than waiting for the bill—to make instant adjustments.

According to Davor Kapelina, president/CEO of AtSite Inc., the digital domain and modern technology were key in helping this healthcare system do more with less. He advised listeners that it’s important to understand how to reap the benefits of the information this technology provides. “Data is very useful, but most of us throw it away because we don't know how to use it," Kapelina said.

AtSite helped Adventist to put data to use by connecting data to a building management system, and then connecting team members to the data. Through a system of dashboards, professionals from facilities, finance and other areas of administration could access the same data for various reasons. This created a conversation across the health system on areas that needed improvement and ways to easily make necessary changes. Data analysis led to a better use of space—15 percent lower costs against the trend line—and efficiency projects that have led to savings of more than $1 million annually.

"As more healthcare organizations wake up to the reality that they can't do what they've always done in facilities, we'll see more organizations taking approaches like we have," Lee suggested.
Data as a driver for new facilities

Adding real estate also remains a key trend in today’s healthcare market, noted Shannon Reber, chief growth officer for Inova Health System, in a presentation on “What’s Hot, What’s Not in Healthcare Real Estate”. Research has indicated that patients are “only willing to drive ten minutes to see their primary care physician and seven minutes to get to an urgent care facility,” she said.

Determining where to add new facilities is among today’s biggest challenges.

As Ron Bowlan, senior vice president of Facilities and Campus Planning for Thomas Jefferson University & Hospital, noted in that same presentation on real estate trends, “It's hard to compete with the CVS pharmacies, etc., on speed to market—right as you're signing lease for an urgent care facility, three pop up right there.”
Fady Barmada, principal/practice leader - Asset Advisory Services for ARRAY Architects, shared with event attendees the benefits of using the digital domain to inform decisions on where to add assets. By accessing detailed digital neighborhoods maps, real estate professionals can explore where need exists for new healthcare facilities, and predict where future need may occur.

“Master-planning processes are great investigations,” Barmada said. “But the information is static. In a field that is so dynamic, master-plannings have limited utility. Digital platforms, if set up correctly, dynamically gather information. So as you design strategies related to current iterations in the marketplace, the model should change and update automatically. It’s a lot more flexible over the long term.”

Bowlan reiterated that point when he noted that in working to develop a campus master plan for Thomas Jefferson, he has begun using digital tools to identify patterns in where they may be duplicating services, and where services might need to be added. “We’re starting to use these heat maps but find the dots keep changing colors on us,” he noted, a point to how rapidly the market can change.

"Speed to market is almost everything right now," Barmada agreed. “What's holding healthcare systems up is that these decisions are fraught with risk. What helps organizations move faster in the marketplace is to understand the inputs and potential repercussions of potential decisions by conceptualizing the data and creating platforms that helps them to scenario-test.”

Read additional key takeaways from this event.

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