When It Comes To Healthcare, CRE Is Driven By Data

Understanding and analyzing data is especially important in the healthcare industry, where reimbursements are often tied to the percentage of square feet dedicated to patient care.

For commercial real estate, that means healthcare providers can now be more judicious when it comes to design and space allocation. 

TGB Architects principal Lois Broadway says clients are now looking at local demographics to determine the average customer age, and also using data to determine the most likely type of care that its patient base will require.

“We are working with a client that started a full assessment on their local demographics to determine ages, admissions into local hospitals and what they need while there,” said Broadway, whose colleague Melissa Kelii will moderate a panel at Bisnow’s National Health Series: Pacific Northwest.

This data drives decisions, like whether a hospital should include more maternity units or make more space for geriatric specialties like cardiology and knee replacement specialists, she said.

Hospitals should also consider how much time they allow patients to recover. For example, some hospitals let patients remain in the hospital for three days, while others end the visit after 24 hours.

Adding to the issue is that fact that Medicare and Medicaid reimbursement is based on the percentage of the facility that provides direct patient care, Broadway said.

“They look at the whole picture and then give you a facility charge,” she said.

So if 60% of the facility is dedicated to patient care and 30% is dedicated to secondary patient support space, such as storage areas, the provider will be reimbursed at different rates for the different uses. Areas like parking garages, which are necessary but not related to patient care, are not reimbursed at all, she said.

All this makes maximizing space a smart financial decision. It is particularly important to find ways to minimize the amount of square footage dedicated to data storage. Often, data is now being stored off-site through cloud providers.

The healthcare-focused cloud computing industry is set to hit $40B by 2026, according to a report by Acumen Research and Consulting. 

“The cloud can reduce IT costs, provide quick access to business applications and forms and provide medical teams with on-demand patient data from anywhere,” Qentelli VP and Head of Innovation Vishnu Nallani told Bisnow.

However, as data storage moves to the cloud, healthcare companies must be careful to secure it and ensure the privacy of their patients, Nallani added. 

“Data breaches cost healthcare organizations millions of dollars each year, because patient data is seen as extremely valuable on the black market,” he said. “Having security features in their cloud like perimeter and internal firewalls, intrusion detection systems and data encryption is extremely important.”

Meanwhile, storing all this data off-site can increase the percent of square feet dedicated to patient care and increase revenue, Broadway said.

“Healthcare provider companies are looking at ways to increase revenue without adding space,” she said. “Sometimes remodels work. Maybe they can add another patient per hour to a general practitioner's schedule.”

Internal remodels that add rooms but not square footage can pay off. Turning space previously used for data storage into patient care areas increases the reimbursable space.

“It’s not just about how and where to store data,” she said. “It’s also about collecting the information you have and analyzing it to determine if you are managing your human, resource and capital assets efficiently.”

When designing and selecting healthcare facility sites in Seattle, Broadway hears a lot of concern from clients about transportation to and from the facilities. 

"All of our clients express concern about transportation," Broadway said. That includes the location of bus stops, access for staff and patients and even other forms of transportation such as shuttles, ride-share and valet.

Broadway said her clients in Seattle, as well as in other suburban cities, are looking for more bicycle storage and electric charging station stalls.