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Perspectives

United States

Report | Best practices in running real estate and facilities

Summary

Over the last decade, a growing number of healthcare systems in the U.S. found that the way they manage their property holdings – the land, medical office buildings and hospital facilities that can account for as much as 70% of their total assets – had become essential to staying competitive. Long overlooked in many systems as a function they needed to centralize and master, many hospital systems have become far more sophisticated in the way they manage hospitals and other properties.

In looking at the declining fortunes of the healthcare services industry in the last five years, it’s not difficult to understand why. Hospitals and physician offices, a $1.27 trillion-a-year sector, were hit hard by the acute recession of 2008-2009. A 2008 study of more than 400 U.S. hospitals of all sizes found that half were unprofitable, compared with 33% of hospitals that suffered operating losses just two years earlier. The result: Healthcare systems have had to greatly tighten their belts.

But costs aren’t the only source of pressure. Increasing the quality of the care – at hospitals and the other medical facilities that healthcare systems own today (physician offices, outpatient clinics, etc.) – has become a major concern. With the prospect of national healthcare reform making Medicare and Medicaid reimbursements no longer based on fees but rather on medical outcomes, it becomes easy to see why hospital systems are scrambling to become more efficient and effective.

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