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1 CLIENT NAME | PRESENTATION TITLECBRE
APRIL 24,2019
WELCOME
THE FUTURE OF MEDICAL
OFFICE
INSTITUTE OF MEDICINE AIMS
SAFE
EFFECTIVE
PATIENT-CENTERED
TIMELY
EFFICIENT
EQUITABLE
CBRE R.I.S.E. VALUES
RESPECT
INTEGRITY
SERVICE
EXCELLENCE
3 CLIENT NAME | PRESENTATION TITLECBRE
JOIN US IN A RAFFLE
DRAWING
SUBMIT YOUR NAME
FOR A CHANCE TO WIN A
$50 AMAZON GIFT CARD
4 CLIENT NAME | PRESENTATION TITLECBRE
APRIL 24ND, 2019
OFFICE ENVIRONMENT STRATEGIES
LOCATIONAL
• NEW MARKETS
-Rooftop growth trends
• MATURE MARKETS
-Infill with strategic services lines not currently provided
• UNDERSTANDING THE DEMOGRAPHICS
-Older populations - less mobile
-Younger population - adolescent care
OFFICE ENVIRONMENT STRATEGIES
TYPES OF MEDICAL OFFICE SPACE
• HEALTHCARE CAMPUS WITH DIRECT ACCESS TO HOSPITAL SERVICES
• OFF CAMPUS MOB’S THAT ARE CLOSER TO THE PATIENT BASE
• OUTPATIENT CLINIC/URGENT CARE
-Free standing single user buildings
-Strip Center
-Hybrid
EG: malls and grocery stores
OFFICE ENVIRONMENT STRATEGIES
VISIBILITY AND ACCESSIBILITY
• HOW EASY IS IT FOR THE NEW PATIENT TO FIND THE DOCTOR’S
OFFICE?
-Signage/Exterior tenant identification
-Line of sight for the patient
-Branding for the practice
OFFICE ENVIRONMENT STRATEGIES
VISIBILITY AND ACCESSIBILITY CONTINUED
• HOW EASY IS IT FOR THE PATIENTS, PHYSICIANS AND STAFF TO
ACCESS THE PROPERTY?
-Ingress/egress in the parking areas
-Parking ratio and occupancy level of the building
-Travel distance from the parking lot to the building
-Proximity of handicap parking to the building
-Drop-off covered portico
-Reserved parking spaces for patients
OFFICE ENVIRONMENT STRATEGIES
VISIBILITY AND ACCESSIBILITY CONTINUED
• HOW EASY IS IT FOR THE PATIENTS, PHYSICIANS AND STAFF TO
ACCESS THE PROPERTY?
-Dedicated physician’s parking
-Number of access points into the building
-Building’s hours of operation
OFFICE ENVIRONMENT STRATEGIES
LEASE STRUCTURE
• WHO OWNS THE PROPERTY AND WHAT ARE THEIR MOTIVATIONS?
-Local investor
-Non-local private equity
-Healthcare system
-REIT
OFFICE ENVIRONMENT STRATEGIES
LEASE STRUCTURE CONTINUED
• NEGOTIATE LEASE TERMS
What is most important for both tenant and landlord if it’s a lease or
buyer and seller if it’s a property sale/acquisition
-What is the performance goal for the property?
-Duration of occupancy
-Growth requirements
-Practice’s access to capital
OFFICE ENVIRONMENT STRATEGIES
SUMMARY
You can see from the list above that being proactive rather than
reactive in the most efficient and productive way to plan your office
space environment. Whether sourcing new medical office space or
renewing your existing lease in place, planning and evaluating your
options will always result in a better path to how the space performs,
operationally and financially.
We welcome the opportunity to become a strategic partner of
yours.
Thank you!
OFFICE ENVIRONMENT STRATEGIES
13 CLIENT NAME | PRESENTATION TITLECBRE
APRIL 24, 2019
HEALTHCARE TENANT FINISH
TENANT FINISH PROJECT STRATEGY
• MARKET TI ALLOWANCE
• WANT VS NEED
• WHO IS DRIVING THE PROCESS? PHYSICIANS?
• EXAM ROOM DESIGN LEADS TO SAVINGS
• Size of exam room doors affect size of exam room
• Evaluate the need and number of cabinets, especially upper
• New design strategy for sinks in exam rooms
HCA MOB INITIATIVES
CLINIC BRANDING
• IDENTICAL LOOK AT EACH CLINIC LOCATION
• Similar patient experience at each clinic no matter the practice
specialty
• SCALABLE BASED ON SIZE OF THE CLINIC
• Framework of the reception area can be increased based on the
number of FTEs required at the desk
• Design includes private consult area that is connected to one
side of the reception area. This allows patient privacy, but also
quick access to clinic employees
HCA MOB INITIATIVES
HCA MOB INITIATIVES
RECONFIGURING/UPDATING CURRENT MOBS
• RELOCATING OWNED PRACTICES TO ONE BUILDING
• One check in area on the main floor – this maximizes employee
efficiency and creates a seamless experience for the patient to
check in, check out, and schedule new appointments.
• Consolidation of specialties, typically one per floor if applicable
• REBRANDING/UPDATING MOB LOBBIES
• Similar to practices, create an identical lobby look for each of the
MOBs
• Hospital buy in for these projects
• Strategic plan to include funding and timing
HCA MOB INITIATIVES
Burns & McDonnell Healthcare
Inflation, tariffs, code changes and an improving economy…what does it all mean to future MOB costs?
Our crystal ball is a little fuzzy these days
Cost are increasing
Recommend locking in pricing as early as possible with a GMP
How long should it take to build or remodel a
facility?
Owning vs. leasing a facility - pros and cons
The Pros of Buying Office Space •Fixed Costs: Locking in your commercial mortgage long-term can give your business clear, fixed costs.•Tax Deductions: The associated costs of owning and running a commercial space can provide tax deductions in the form of mortgage interest, property taxes, and other items.•Additional Income: Owning your office can offer the advantage of renting out extra office space, adding another source of income.•Retirement Savings: The prospect of owning commercial space and having the property appreciate over time, allows the owner to sell out and fund their retirement.
The Cons of Buying Office Space •Lack of Flexibility: A new or growing business may
experience unexpected needs in the future. If your business continues growing, your owned office space may become inadequate, forcing a sale of the property.•Upfront Costs: Buying commercial space will initially cost far more upfront. There are property, appraisal, and maintenance costs along with a large down payment and possible property improvement costs.
The Pros of Leasing Office Space •Prime Property: A leasing office space option provides a business
with the chance to rent in an area with a good location and high image. If your small business is dependent on location and image, such as retail or restaurants, the leasing option is much more affordable.•Free Up Working Capital: With your money not tied up in real estate your business can respond to opportunities in the market. In addition, your ability to borrow funds will not be as limited as with buying office space.•More Time: Any type of ownership comes with headaches. A leasing option affords the time to focus solely on running your business.
The Cons of Leasing Office Space •Variable Costs: With a leasing option you may be subject to annual
rent increases and higher costs at the time when your lease expires.•No Equity: While leasing you will be funding someone else's retirement with your lease payments. However, owning requires you to get involved in the property management business.
Traditional design-bid-build vs. integrated design and construction – what are your options?
Non-Acute
Healthcare Trends
Jason Andrews
President
GroupSource
Physician Practice Consolidation
Procedure Migration
Supply Chain Impact
Macro Trends Impacting Non-Acute
Migration of Healthcare into the Non-Acute Environment
What’s happening?
What are the causes?
Why is it important/relevant to you?
How are these trends impacting what/how people buy?
Physician Consolidation
General Trends
Majority of physicians do not have an ownership stake in their practice
47.1% in 2016, down from 53.2% in 2012
What’s Driving Consolidation/Acquisition
Hospitals—focus on surgical specialties and high-revenue stream interventionalists
Formation of “Super Groups”—defined as groups of 20 or more physicians
Private Equity—vertical strategy in Dermatology, GI, Ophthalmology
Additional Drivers: Physician Consolidation
Changing reimbursement and regulatory
landscape
Economies of Scale for Payer Rates, RCM,
Employee Benefits, etc.
Access to Technology – EHR and data sharing
Lifestyle desires of younger physicians
Procedure Migration to Non-Acute Setting
BCBS projections
2% decline in inpatient discharges over next decade
15% growth in outpatient volumes over that same time
80% of gall bladder surgery already outpatient
Hysterectomy projected to15 increase from 36% to 64% outpatient
Why?
Stakeholder alignment—Patients, Providers, Payers
Minimally-invasive options
Autonomy and additional revenue streams for Physicians
In Office Procedures
Many practices adding dedicated procedure rooms
Additional revenue streams
Convenient for patients—easier and faster
In a 2016 Accenture study, 61% of patients would be willing to switch providers to get appointment sooner and 52% would do the same to access more convenient locations
Non-Acute Care Supply Chain
Trends in Procurement
40% of GPO discounts practices are eligible for are not being accessed correctly
20% of supplies purchased by avg medical practice change every year
Increase in non-traditional purchasing channels—direct from manufacturer, Amazon, etc.
Challenges
How and what to acquire
Negotiation, standardization, and, obsolescence
Buy vs lease on capital expenditures
“Control the controllables”
Best Practice Suggestions
Align on set of initiatives with your distributor(s)—cost containment, standardization, etc.
Schedule regular meetings with your GPO partner
Best Practices
Ownership within the Practice of Key Areas—medical, office, vaccines, etc.
Alignment with your Distributor
Schedule Regular meetings with your GPO
Linear vs Collaborative Approach
Traditional Model Optimized Model
Distributor
Customer
GPOGPOGPO
Customer
GPODistributor
Summary
Consolidation is not slowing down or going away
Procedures will continue to move into lower-acuity environments
Alignment on Supply Chain goals will dramatically increase efficiency and decrease
costs/frustration
33 CLIENT NAME | PRESENTATION TITLECBRE
APRIL 24ND, 2019
CBRE DIMENSION
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APRIL 24ND, 2019
QUESTIONS