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June 12, 2018

IN THE KNOW: Bisnow National Healthcare West: The Innovation, Expansion and Impact of Healthcare

“We heard some familiar themes and some new insights at the recent Bisnow Healthcare conference in Los Angeles. Industry leaders echoed the theme that the ‘retailization’ of healthcare and the adoption of healthcare ported to the home is going to be a continuing strategy for incremental, cost effective expansion with a small footprint.  Technology will aid this effort but regulators will need to be educated and made more adaptable. Driving out waiting time using technology such as iPads, ride sharing and other innovations will continue. As a response to SB 1953’s 2030 regulatory imperative, expect nonconforming inpatient spaces to be turned into surgery suites and assisted senior living spaces. Billions will need to be spent to meet these regulatory requirements that are not capital generating investments and this is going to be very challenging. This will result in more consolidation and the acceleration of hospital failures that we have seen over the past 5 years. One commentator believed that the philosophical base of the ACA—outcome based compensation and reimbursement—will continue to be adopted by payors. In his panel, Meridian’s Mike Conn spoke about the effect of competition in the outpatient arena for major tenants driving costs down, even in a tight outpatient healthcare market like San Francisco.” — Indrajit Obeysekere, Vice President, Client Services

“Healthcare Providers will continue to expand their footprint to gain greater market share, improve physician recruitment, and brand themselves. Patient experience will remain the driving force in the design of new facilities. Ambulatory care models in the outpatient setting will still focus on delivering greater access to care at lower costs, and providers will strive to keep patients out of the emergency room. The retailization of medicine is here to stay, and we will continue to see Urgent cares near the residential rooftops and in retail settings.  Some providers are working on models to utilize ride sharing as a way to get patients preventative care. The MOB lease and net sale market is expected to remain strong, with rents continuing to rise and cap rates remaining strong as well. Construction costs for new construction and tenant improvements continue to increase, which is putting pressure on rents for physician groups who have  fixed reimbursements. Big thanks to Bisnow for another interesting conference that provoked lots of discussion in the hallways.” — Mike Conn, Senior Vice President