Real Estate Strategy Primer: The Future of Healthcare

Real Estate Strategy PrimerThe Future of Healthcare

SpotlightST. OLAVS HOSPITAL - TRONDHEIM, NORWAYOne of the more exciting projects in healthcare today is St. Olavs Hospital in Trondheim, Norway. Replacing the century old structure (950 beds, 8,000 employees, 413,000 patients a year) the new facility is aiming to become the most technologically advanced hospital in northern Europe by 2014.

In order to become more patient-centric, St. Olavs is implementing improvements in the healthcare experience from many angles. New efficiencies in energy use and operations are part of what make this ambitious project sustainably fitted to the services they provide.

The new hospital will consist of seven clinical centres, each designed to operate as an organizational unit, with adjoining functions. Each of these centres (20-30,000 square meters in size) are connected via underground passages and sky bridges to maximize circulation and active transport of supplies.

The centre of the facility is future proofed, and not fixed to a specific block, rather it can be adjusted or divided among blocks to better service patients and staff over time. Aesthetically, all public spaces feature

green elements, including trees, wild stones and bushes. Interior and roof gardens are a feature throughout, covering about a quarter of the ground area.

St. Olavs is also deploying Microsoft’s advanced information and communication technologies, along with single, integrated Internet Protocol (IP) network. This tactic not only reduces operating costs, it allows for services and applications to become more flexible and/or integrated.

The first of six clinical centres were completed in 2006, and the entire hospital will be ready to treat patients by 2015.

St. Olavs will form the basis for entirely new treatment methods, increased efficiencies, and better patient care. A highly integrated design approach, both physically and technologically, will allow users to combine patient treatment, research and teaching functions. Wireless networks will provide patient information any time, and from any location, along with communication systems, alarms, and calls.

Production Increase: 26%

Headcount Increase: 10%

We are building a hospital technology infrastructure that unlocks the benefits of enhanced communication.

Arve-Olav Solumsmo

Public Relations ManagerSt. Olavs Hospital

THE FuTuRE OF HEALTHcARE

The Next 5 Years in HealthcareTRANSITION AND EVOLuTION

Healthcare is undergoing profound changes driven by the key issues outlined in this ontology diagram. These “drivers” have many and varied real estate and facilities implications. Identifying the potential

impacts and responses available will allow healthcare service providers to re-strategize portfolio needs; creating efficiency, flexibility, improving stakeholder satisfaction and increasing or resulting in cost savings.


HealthcareReal Estate Ontology

2010 - 2015

Energy Efficiency

Separated Temp / Vent

Improved Mechanical Technologies

Sustainable buildings, sustainable campuses

Research Conversion

Flexible Facilities / Systems

Flexible Care Strategies

Systemic Re- alignment of Business Models

Treatment Strategy

Preventative Medicine

Surgical Episodes

Chronic Disease Management

IN patient OUT patient mix

Cost Efficiency

Accountable Care, Bundled Payment

Quality Incentives + Penalties

End of pure fee for medicine

"greener" facilities, lower OPEX

Networked Treatment

Efficient Clinical Systems

Medical Homes

Specialty practices "string of pearls"

Shared Resource ModelsFuture Proofing

Elastic + Adaptable

Patient Rooms with Care Spectrum

Buildings that can change

Portfolio Guidelines that Evolve withBusiness Model

Scale + Service Level

Urban Centers / Mix Use Models

Smaller Footprint Buildings, Linked Services

Transparency (Operating Rooms with Windows)

Adaptive Re-use, CommunityInterdependence

Technology + Care Delivery

Robotic Surgery

Tele- medicine

Patient Room Size

HealthVault + Patient Stakeholders

Acuity AdaptabilityShorter Stays

Sicker Patients

Patient Centered

Age Sensitivity

Sun + Light + Air

Integrated Family Care Model

Zoned Patient & Operations Protocols

Proximity of Care / Services

Healthcare.mmap - 5/3/2010 - Mindjet

The biggest single driver of a de-centralized portfolio strategy for healthcare providers is the continued trend toward proximate care availability. Most major providers are facing a variety of change management scenarios around treatment facilities size and locations that are driven by:

1. Patient expectations that necessary facilities will be convenient and provide a variety of offerings close to home.

2. Networked service models create business relationships that may shift over time, necessitating unforseen facility needs to effectively manage patient flow.

3. Aging patient population – the baby boomers will create a large base of older Americans that will require medical care. Mature population require different care strategies and different facilities.

4. The continuing body of evidence around improved treatment results due to facilities that provide more natural light, improved air quality and individual control is now the expectation for patient experiences.

5. The move of family and supporting relationship members into the patient room has a positive effect on treatment results, creating the requirement for larger rooms and additional services.

6. Zoned space protocols separate patient and visitor experience from facility operations and maintenance.

Patient centered care


Acuity Adaptability

Technology + care Delivery

The combination of advancing technology and treatment protocols with cost efficiency and patient experience expectations is shortening the time that is spent in a hospital or treatment facility. Shorter stays with effective monitoring tools put the patient in a comfortable home setting sooner which has a positive impact on treatment.

With the continuing development of preventative care models, it is likely a smaller patient population will require critical care at higher levels. Facilities will need to “flex” to accommodate a variety of needs at one time or in a progressive treatment protocol.

Significant technological advances that are now becoming mainstream are changing the healthcare we receive and the way we receive it as never before.

• Robotic Surgery and Operations Support• Tele – medicine• Larger, more flexible patient rooms • Integrated care/data management systems


Scale & ServiceUrban centers and mixed Use models smaller footprint - mid rise with linked Uses

adaptive reUse transparency


Future ProofingThis generation of portfolio planning principles and new facilities guidelines will need to provide for more “elasticity” of use and systems than seen before. The changes affecting the built healthcare delivery environment are multifaceted – driven by technology, care protocols, patient expectation and more.

• Flexible facilities accommodate changes in use and technologies• Patient rooms with a broad spectrum of care

Flexible real estate strategies that allow for changes in business models, service delivery models and patient treatment modality.(i.e. Mental health is the fastest growing category of disease)

Scale & Service


Energy Efficiency• Improved mechanical / electrical technologies• Sustainable healthcare facilities

Over the past few years, the healthcare sector has embraced the benefits of energy efficiencies. Healthcare, as a sector, accounts for a disproportionate amount of energy usage -- more than twice the amount of energy per square foot of space . As shown on the left, many healthcare facilities are now experimenting with the benefits of “green” technologies -- cooling towers, on-site solar and wind power, employee workflow changes and lighting solutions.

Providence, pictured on the left, is the first LEED Gold healthcare facility in the United States. The nationally recognized medical center was able to significantly reduce operating costs, without sacraficing its ability to deliver quality care.

solar efficiencies air cUrtain diagrams

providence medical centre - newberg, or


Cost efficency is a difficult subject in healthcare facilities. In order to lower operating expenses while maintaining the ability to provide quality care, healthcare facilities are utilizing accountable care, bundled payment models, quality incentives and penalties, and greener facilities. Accountable care integrators can actually improve patient health and productivity while lowering costs.The diagram below illustrates how a blend of Modified fee-for-service and bundled payment models are precieved as most effective to improve efficiencies.

cost Efficiency

“how effective do you think each of the following payment approaches would be in facilitating a more efficient health care system?”

source: commonwealth fund health care opinion leaders survey. september/october 2008.

25 37 62

51

23

32

18

19

5

a blend of the modified fee-for-service and bundled per-patient payment systems

bundled per-patient payment (a single payment for all services provided to

the patient during the year), with bonus payments for high quality

a modified fee-for-service system, with bonus payments for high quality and

efficiency

very effective

effective


Research is being translated into new treatment protocols with increasing rapidity. Technology, holistic cost models and government support are moving new medicine and innovative care models into the marketplace.

At every level healthcare services are changing - real estate strategies must support this by understanding the business dynamic and providing thoughtful solutions.

Communications platforms are transforming healthcare centers into highly collaborative networks of spaces. Efficient clinical systems are necessary (care platforms and electronic medical record services) to transfer information efficiently among healthcare professionals.

Research conversion

Treatment Strategies

Networked Specialties


There is significant opportunity to “re-think” real estate solutions and align strategies with new business dynamics in the evolving healthcare marketplace. We have identified at a high level a number of the drivers for change – our tools and processes are designed to: - capture your enterprise vision - establish potential scenarios - provide transparent decision making processes - build a RoadMap© to implementation - accelerate your success at realizing benefits

Colliers Advisory helps our clients achieve the maximum potential of their real estate – because you real estate should be as efficient and creative as your enterprise.

Our commitment to Life Sciences; healthcare, research, pharmaceutical, and biotech is core to our marketplace offering, our depth of expertise and our passion for the mission of our clients.

conclusion

contact us

Advisory Services│Colliers Studio™601 Union Street, Suite 5300Seattle, Washington 98101-4045

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doug demersManaging [email protected]

ted soltisDirector, Life [email protected]


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Real Estate Strategy Primer: The Future of Healthcare