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8 OCTOBER 2024BackgroundTo say that the past 4 years in healthcare have been extraordinary would be a massive understatement. Healthcare property management in Southeast Pennsylvania (SEPA) is no different. To my understanding, what we saw in SEPA was a microcosm of the entire country. The shift we saw toward outpatient care delivery accelerated by the passage of the ACA (from the heavy inpatient model) was temporarily halted as we addressed the pandemic. While this has driven a reconsideration needed for the preservation of inpatient capacity in new concept design, this is likely to become a flex capability model in most markets as we move forward. In other words, while we see the shift from semi-private occupancy continue, I expect there will be a large surge in capacity designed into inpatient and inpatient-capable facility construction and renovation. Before the pandemic arrived on our shores, outpatient and elective surgery caseloads were consistent and profitable. However, once lockdown orders were issued, volumes quickly diminished, leaving hospital ORs to handle only emergency cases while ambulatory surgical centers ran without elective cases, providing each little to no revenue. This was a necessary step in controlling the spread, of course, but this drought meant a system built on outcome-based throughput was now without one of its most critical revenue streams. Surprisingly, during the pandemic, the urgent cares did not perform as well as one would expect, were one to gauge against historical flu season volume spikes. Today, the volumes of these facilities across the US remain stubbornly below pre-pandemic projections. The Real Estate ImpactThe dearth of outpatient and surgical case revenue combined with a dynamic shift in care delivery has driven the most unprecedented rightsizing in healthcare Hospital-OwnedBusiness and Ambulatory Occupancies: Vacant Square Footage, Consolidations, and the Real Estate Cycle in a Post COVID MarketBy Dan Keller, System Director of Facilities & Engineering, Tower HealthDan KellerIN MY OPINION
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