Tag Archives: healthcare reform

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Abrazo helps guide Community Through Healthcare Reform

Abrazo Health has announced a new education series aimed at helping Arizonans navigate through the complex topic of healthcare reform and insurance reform programs. Abrazo Health will hold a series of free community events in November to answer questions about health care reform, Medicaid Expansion, and the new Health Insurance Marketplace and the potential benefits to individuals and their families. The education sessions will be offered in both English and Spanish.

Crystal Hamilton, Chief Executive Officer of Maryvale Hospital, an Abrazo Health hospital, says, “Because this community will be greatly affected by these changes, we are intent on helping individuals and their families understand this complex topic and their options.” Hamilton adds, “The complexity of the Affordable Care Act, insurance reforms and all that comes with it can be a slippery slope so Abrazo wants to make sure our community members are well-informed in order to make the best decisions for themselves and their families.”

The sessions are scheduled for the following dates at Maryvale Community Center at 4420 N. 51st Ave. in Phoenix:

·         Wednesday, November 6 at 11am – 2pm
·         Thursday, November 7 at 6pm – 9pm

Residents can register online at AbrazoHealth.com/ReformEvent or by calling 1-855-292-9355.

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BCBSAZ, CPLC educate Arizonans about healthcare reform

Blue Cross Blue Shield of Arizona (BCBSAZ) and Chicanos Por la Causa, Inc. (CPLC) announced a joint effort  to help educate Arizonans about the healthcare reform law. Together the organizations aim to reach those who likely haven’t had insurance in the past and may not understand how the law will benefit them.

With a combined 117 years in the Valley, BCBSAZ and CPLC have a long history and shared commitment to the community. In the days ahead, the organizations are teaming up to:
· Make bilingual healthcare reform advisors available.
· Host healthcare reform education events.
· Conduct shared media opportunities with Hispanic outlets.
· Identify ongoing education opportunities.

“Working with CPLC, we’ll serve Arizonans in every corner of the state by providing resources and tools needed to make smart decisions in a time when healthcare is changing greatly,” said Richard L. Boals, president and CEO for Blue Cross Blue Shield of Arizona. “The open enrollment period gives Arizonans a chance to research their options and learn more about the value health insurance plays in keeping our communities healthy.”

“As one of Arizona’s largest social services organization, we are always looking for new opportunities to expand our service and support those who are historically underserved. Healthcare is a fundamental need and helping individuals understand how the Affordable Care Act impacts their lives and the best way to get coverage is our goal,” said Edmundo Hidalgo, CPLC President and CEO. Working with Blue Cross Blue Shield of Arizona, we have the opportunity not only to educate the community, but assist individuals in getting health insurance through local, personalized service.”

Healthcare reform open enrollment begins October 1 and runs through March 31, 2014. Within Arizona it is estimated that 480,000 people will be eligible for financial assistance. If a person is eligible for a subsidy, they must purchase their health insurance coverage through the Health Insurance Marketplace, also known as the exchange. Health insurance plans can also be purchased directly through a broker or BCBSAZ.

More healthcare reform information can be found in English at azblue.com or in Spanish at salud.azblue.com. BCBSAZ representatives can be reached at (877) 874-9958.

Healthcare Reform Impacting Healthcare Real Estate

How Healthcare Reform Will Impact Healthcare Real Estate

How Healthcare Reform Will Impact Healthcare Real Estate

The Patient Protection and Affordable Care Act (ACA) which becomes fully effective in 2014 is the most ambitious undertaking in the American medical field since Medicare’s highly controversial passage in 1965.

The law, which expands healthcare coverage to as many as 52 million Americans who are currently uninsured, goes into effect at a time when the nation’s 68 million Baby Boomers – many of whom have pre-existing medical conditions – celebrate their 65th birthdays at the rate of one every eight seconds. And it’s these patients that the ACA addresses – those with four or more chronic conditions who are poised to account for 96 percent of healthcare costs going forward.

The impact of reform on healthcare real estate will be significant because there is a robust requirement for new mixed-use campuses and outpatient facilities where preventive care can be delivered to millions of newly insured Americans. Sg2, a Chicago firm that works with more than 1,000 hospitals and health systems, estimates that the use of outpatient services will grow by 21.6 percent between 2009 and 2019. In comparison, during that same time period, inpatient care will grow by just 1.7 percent.

As the Affordable Care Act Kicks In

Even if healthcare reform had not been passed, demographic trends were already supporting the outpatient sector, says Alan Pontius, managing director of the healthcare real estate group at Marcus & Millichap Real Estate Investment Services. According to Pontius, reform makes a good thing even better.

Although reform will definitely boost demand for space, investment principles for the healthcare sector are likely to remain unchanged. Supply is tagged to demand. “I don’t think spec development in medical office is the right thing to do,” Pontius said. “We’ve seen a lot of spec development fail in the past 24 months. And the impact of this healthcare reform isn’t going to show up overnight anyway.” There is still uncertainty over how healthcare reform will impact the overall economy, which drives demand for all types of outpatient facilities.

The Physician Shortage and Its Impact

Demand for space will be impacted by the supply of healthcare providers, according to Robert Bach, chief economist at Grubb & Ellis. “Do we have enough doctors, nurses and other professionals to accommodate the rising demand? Over time, we will see greater demand for healthcare facilities, but the rate of increase will be constrained by how quickly medical schools can ramp up the supply of healthcare professionals.”

Cecil B. Wilson, M.D., president of the American Medical Association (AMA), says that “This is not a surprise, of course, but I hope that the oft-repeated statistic will force our nation and our government to face the harsh reality of America’s current physician shortage, our growing underserved populations, and the dismal issue of access for those newly insured after 2014 under provisions of the Patient Protection and Affordable Care Act.” According to Wilson, the AMA anticipates that the nation will be short by at least 125,000 physicians by 2025. Complicating the situation is the fact that the Department of Health and Human Services estimates that as many as one-third of physicians practicing today will retire over the next 10 years.

How Much Outpatient Space Is Needed?

Jeffrey H. Cooper, an investment banker who specializes in healthcare facilities with Savills, believes the potential exists to develop as much as 60 million SF of new medical office buildings nationally over the next few years. Using the standard multiplier that calculates that each new outpatient requires 1.9 SF of medical office space, Cooper says that a low-ball figure of 30 million newly insured individuals will require the construction of approximately 57 million SF.

In Massachusetts from 2006 through 2009 — as a direct consequence of the introduction of the Commonwealth Care Health Insurance Program — an additional 1.8 million SF of medical office space was developed and absorbed, a 14 percent increase. CoStar reports that national medical office building space construction peaked at 19.5 million SF in the 4th quarter of 2006, and plummeted to 6.7 million in the 1st quarter of 2009. The Massachusetts numbers bucked the national trend and are a direct result of RomneyCare.

The Growth of Outpatient Care

Outpatient care – which accounts for 40 percent of a hospital’s total revenues – will surge as newly insured people seek healthcare services. Currently, the U.S. delivers 65 percent of healthcare services in outpatient facilities, a significant increase over the 43 percent reported in 1980.

A study by McKinsey & Company’s Global Institute found that outpatient spending is growing at a rate of 7.5 percent annually, adding $166 billion between 2003 and 2006. Outpatient spending is expected to total $163 billion in 2011 alone and is likely to grow by 30 percent over the next decade. With more than 600 million outpatient visits every year, inpatient admissions will continue to decline. As the number of annual outpatient visits increases dramatically, hospitals will shift their resources to more dynamic and integrated ways of delivering healthcare to their patients.

According to the McKinsey report, “In theory, this shift (to outpatient care) should help to save money, since fixed costs in outpatient settings tend to be lower than the cost of overnight hospital stays. In reality, however, the shift to outpatient care has added to – not taken away from – total system costs because of the higher utilization of outpatient care in the United States.”

Focus on Wellness

Healthcare villages – a campus-type environment that we’ve helped to pioneer, featuring primary-care, imaging, diagnostics, outpatient surgery and free-standing emergency departments– are becoming destinations of choice for people in the community. For practices looking to reduce their overhead and debt service, healthcare villages offer enormous growth opportunities. These include access to electronic health-record services, as well as service-line managers who help practices enhance growth of their revenue streams.

In my estimation, one of the most important components of the new paradigm will be wellness centers. Just five years ago, wellness was an emerging $200 billion a year industry; today, it totals $500 billion and is growing rapidly. These facilities usually include a state-of-the-art medically-based wellness center including clinical departments that promote health prevention, lifestyle modification, disease management programs and rehabilitation. Wellness centers typically house a fitness center with an indoor aquatics center; spa services; indoor walking track; group exercise rooms; cardio and strength-training equipment; and well-appointed men’s, women’s and family locker rooms.

The concept of integrating aligned services across the continuum is also creating new models for co-locating medical providers with R&D and even education. Take the Arizona Health & Technology Park, an alliance between The Alter Group and the Mesa Campus of A.T. Still University of Health Sciences, featuring a spectrum of complex facilities from a nationally recognized university to medical office buildings to a specialty hospital to biomedical research facilities. The East Valley park, situated in the state’s largest and fastest growing metro area, allows a new alignment of services that fosters the education of future healthcare providers, the expansion of chronic care, and new medical innovations with the presence major pharmaceutical and medical equipment companies.

[stextbox id="grey"]For more information about healthcare real estate or Alter+Care, visit www.altercare.net.[/stextbox]

Healthcare construction

Healthcare Facilities: Just What The Doctor Ordered

Construction of healthcare facilities in Arizona boldly forged ahead in 2010, despite an economy that refuses to rebound and uncertainty over the impact of federal healthcare reform.

Officials figure that Arizona’s population will continue to grow and age, and because of the new federal law more people will have access to health insurance, which indicates a greater need for healthcare facilities.

Major players in the healthcare field from the Metro Phoenix area to outlying rural communities are investing in the future in a big way. Arizona healthcare facility projects with a total estimated cost of nearly $1B are finished, nearing completion or in the planning stage.

Banner Health has four projects totaling almost $300M: Banner Ironwood in Queen Creek, Banner Good Samaritan in Phoenix (expansion), and the Banner MD Anderson Cancer Center and Banner Gateway Medical Office II in Gilbert.

“You might say we’re in the business of being futurists,” says Peter Fine, president and CEO of Banner Health. “The risk of investments is not for the faint of heart.”

Technology a Driving Force in Healthcare Facilities

There is concern regarding healthcare reform that focuses mainly on how reimbursements will occur. Federal officials are pushing for more accountability in patient care outcomes, tying reimbursements to those efforts. As a result, information technology is becoming a key factor.

Mark Peterson of SmithGroup, a design and engineering firm, is working with clients to create healthcare facilities that play a direct role in patient care. It’s called evidence-based design.

“We’re providing clients with building solutions that support their patient-care mission and can be proven that there is a direct correlation between building design and improved patient outcomes,” Peterson says.

While the need for healthcare facilities most certainly is growing, some say the bad economy is resulting in a slight decrease in the utilization of hospitals. Experts say people are going to their doctor more and using hospitals less than they did a few years ago, especially those who have lost their jobs and may not have insurance coverage for an expensive hospital stay.

Another trend, experts say, is an industry focus on the word “healthy,” rather than the word “sick.”

“With a focus on healthy, what does this landscape look like?” queries MaryAnn Guera, CEO of BioAccel, a nonprofit organization that drives economic development through commercialization of late-stage basic and applied research in the life sciences. “Health or sickness? The look of the buildings we need will change around that.”

Metro, Rural Areas See Activity

Jason Meszaros, vice president of Irgens Development Partners, says healthcare projects in the Phoenix area represent the only type of development “that has any legs.”

Compared to previous years, construction has fallen off somewhat, some medical condos are back on the market, and there is still a desire for medical office space on or near medical campuses, he says.

For Irgens, which is building a 51,000 SF medical office facility in Gilbert, and for most others in the field, activity in 2011 should be fairly moderate, Meszaros says. Healthcare reform, the economy and population growth are all factors.

“The healthcare reform act throws a little bit of uncertainty into it,” he says. “People are a little apprehensive to make a long-term commitment.”

Healthcare facilitiesEven so, there is no shortage of building activity in the healthcare field, not just in the metropolitan areas, but in rural parts of the state, as well. Money for these ongoing projects comes from various sources, including tax-exempt bonds, operating reserves, philanthropy and the federal government.

For example, Phoenix Children’s Hospital embarked on a $588M expansion project in 2008, which will be 90% completed by the end of 2010. Officials expect to have the ambulatory clinics open by January, and hope to occupy the 11-story patient tower by June, increasing the number of beds to 626 from 345.

Bob Meyer, Phoenix Children’s Hospital CEO, says the project is funded primarily with $320M in tax-exempt bonds, plus operating reserves, fundraising and philanthropy.

There were 900,000 children in Maricopa County in 2003 when Phoenix Children’s began planning for expansion. That number has increased to 1M, and by 2030 as many as 1.7M kids will be living in the Phoenix Metro area.

“That’s why we’re building the building,” Meyer says.

At the same time, people are living longer. The population over 80 continues to grow almost exponentially, creating an increase in demand for medical services.

“That’s what has most people in the industry concerned,” Meyer says. “Hopefully there will be magic drugs, but in today’s technology it’s going to be a challenge.”

Nathan Anspach, senior vice president for medical economics at John C. Lincoln Health Network, expects capital budgets to see increasing pressure from information technology investment. Basically, that means less money for hospital construction and more money earmarked for IT improvements.

“IT investments are going to be required as part of the healthcare reform act, and that will impact capital construction,” Anspach says. “Healthcare systems are all looking at IT investments for electronic records and electronic measures like WiFi, and that’s going to cramp the construction budget.”

Recognizing the growing importance of IT, John C. Lincoln is building a $6M data center adjacent to its new administrative headquarters in the North Valley near I-17. The 4,000 SF building is expected to be completed in the first quarter of 2011. Susan Fuchs, media relations specialist, says the new facility will provide “a more secure environment for data management and electronic medical records.”

“It’s the wave of the future,” she says.

An Investment for Arizona’s Future

At St. Joseph’s Hospital and Medical Center, affiliated with Catholic Healthcare West, Bob Campbell, vice president for business development in Arizona, says, “We are looking at making investments in our whole continuum of services, everything from physicians’ offices, outpatient services, joint ventures, hospitals that we have, and health plans that we operate.”

Suzanne Pfister, vice president of external affairs, says CHW is moving toward partnerships, not solely construction projects. She mentions a joint venture with SimonMed, an outpatient medical imaging system.

“Under healthcare reform, we see more of a push toward preventative, lower-level healthcare, less expensive healthcare,” Pfister says. “What we’re looking at is — how can the right patient be in the right place? Maybe that’s not a hospital. Maybe it’s urgent care, or into family practice with an after-hours clinic.”

In partnership with United Surgical Partners, CHW is building an orthopedic surgery hospital at 40th St. just south of Loop 202. The 75,000 SF facility is expected to open next spring.

Other healthcare facilities in the planning stage include a 16,000 SF cardiac catheterization lab at Chandler Regional Medical Center, and a 145,000 SF expansion of the patient tower adding about 100 beds.

“Connecting the dots between construction and healthcare reform is really going to force hospitals to partner more with community physicians and outpatient options,” Pfister says.

Banner Good Samaritan Medical Center launched a $71M expansion of its surgical services department. When completed in 2012, there will be 20 state-of-the-art operating rooms, 76 preoperative and postoperative bays, a new waiting room with technology to keep families apprised during the surgery process, plus other amenities, according to Banner Good Samaritan CEO Larry Volkmar.

In outlying areas, construction is underway at what will be called Florence Hospital at Anthem northwest of Florence, says Gilbert Hospital CEO David Wagner. Completion of the 96,000 SF building, which will include an 18-bed correctional unit, is targeted for next summer.

Other rural projects include the 75,000 SF Marana Health Center for MHC Healthcare, slated for completion in March, and the $4.2M Superstition Mountain Mental Health Center in Apache Junction.

Meanwhile, USDA Rural Development, an arm of the federal Department of Agriculture, has committed $28.6M, including loans, for Arizona healthcare projects this fiscal year, says spokeswoman Dianna Jennings.

Other projects aided with federal funds are: the Pinal Hispanic Council Clinic in Coolidge, Copper Queen Rural Health Clinic in Palominas-Hereford, and the La Paz Regional Hospital in Parker.

Peterson says the economy is having an impact on the way people approach their own healthcare, and that’s having an impact on new hospital construction.

“Private sector clients are moving ahead with strategic plans for future master planning
and how best to position their organizations in urban areas,” Peterson says. “That’s true in Phoenix and Tucson and a little bit in Northern Arizona. It’s all about capturing the market and having the best possible response to healthcare reform and emerging changes to the economy.”

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www.smithgroup.com
www.irgensllc.com
www.rurdev.usda.gov/az/ 

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AZRE Magazine November/December 2010

Healthcare Reform - AZRE Magazine November/December 2009

How National Healthcare Reform Could Define A Chronic Condition For Valley Construction

Healthcare Reform – Healthy Choice?

Healthcare reform has been a national hot button lately, and with it comes a focus on all related industries, such as healthcare design and construction. With the development of proposed plans, comes the scrutiny of every penny allocated, prompting a public perception that the cost of healthcare facilities drives up the cost of healthcare. Because of this opinion, many healthcare operators are feeling pressure to decrease spending on their facilities to prevent a collective outcry.

Despite the myriad subjective view points on this issue, several facts substantiate that healthcare construction should not cease.

Injecting Capital Into Growth

History has proved that government-provided medicine hinders the development of new healthcare facilities and does nothing to foster innovation or improvement. There have been many newsworthy examples of limited investment in facilities maintenance programs and improvements, resulting in run-down, non-viable centers, which minimize effectiveness of healthcare delivery.

Capital expenditures (facilities and equipment) typically comprise 10% to 15% of a healthcare organization’s budget, while staff costs can total 60% or more. Spending on projects should not be limited, but instead examined to elicit greater efficiencies through planning and design.

Booming Healthcare

The Phoenix and Tucson metropolitan areas have invested in healthcare facilities, but rural areas still lack capacity. The Hill-Burton Act of 1946, implemented “to modernize hospitals that had become obsolete due to lack of capital investment,” caused a surge of rural hospitals to be built in the 1950s and ’60s. Many of these hospitals still exist in almost the same condition today as when they were first built — unable to support current clinical demands and technological needs.

According to a U.S. News and World Report article published earlier in 2009, Phoenix ranks No. 11 on the top 20 list of cities where baby boomers are likely to retire, based on the expected senior population growth. The oldest boomers will begin to retire in 2011, and the Valley is not ready to receive them.

Arizona is short 1.5 beds per 1,000 residents, based on the national average. Because the demand on our statewide facilities will increase, not investing in additional healthcare facilities now will yield a greater shortage in the future. Seventy-six million baby boomers are anticipated to have multiple chronic conditions due to longer life spans (90+ years is the fastest-growing demographic) and will require more in-patient and primary care.

Baby boomers don’t plan to live in traditional nursing homes, as they prefer a community-centered lifestyle. The “old school” model of long-term care won’t suffice, requiring innovative facilities to accommodate the increasing numbers in a supportive manner.

To compound the demographic dilemma, earlier this year the under-20 population, or Gen Y, surpassed the number of baby boomers. This cohort now comprises roughly 28% of the U.S. population and is fast becoming equally as influential as the boomers, but with new expectations. Because this generation is just now beginning to enter its child-bearing years, more women and children’s services will be in demand at the same time boomers’ healthcare needs peak.

Reviving Investment Through Operations

As the healthcare reform debate rages, investment in design and construction of healthcare facilities must continue. Implementing effective planning and design strategies can actually help to reduce operational costs, such as staffing, because of improved efficiencies. Investing in facility updates also emphasizes a focus on better patient care through the creation of quality, healthy environments that take advantage of current technologies and meet best-practice expectations at a minimum.

To help spawn the future success of healthcare in Arizona, it is necessary for design and construction to continue at the high caliber of success it has achieved — and lead the way to providing innovative healthcare programs and facilities for the nation’s aging and future generations.

AZRE Magazine November/December 2009