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How The New York Healthcare Market Will Change In 2016


From a new approach to healthcare facilities to new ways of financing them, 2016 has a lot in store for the industry, according to experts who’ll be speaking at Bisnow’s State of New York Healthcare event next Thursday.

One of the major changes brought on by the Affordable Care Act is also driving healthcare providers to expand their footprints, especially in New York, according to Nisan Gertz, a senior partner at Macro Consultants.

In general, government and insurance providers are trying to reduce situations where healthcare providers are paid per procedure, instead paying per outcome. As a result, the total number of patients healthcare providers treat suddenly becomes a lot more important than the number of procedures patients undergo. More patients now equals more money

“Over the last year or so we’ve seen a very strong territorial drive in the New York area, with hospitals expanding into areas they didn’t traditionally cover,” Nisan says. “You have a lot more competition in the marketplace, because of that change in how they’re being paid.”

“So you see things like Memorial Sloan Kettering opening a new cancer center just a few miles away from Northshore LIJ,” he says, “practically in their competitor’s backyard.”

Or take Winthrop University’s new Cyberknife center on the UWS, an area traditionally served by MSKNew York Presbyterian, Lennox Hill and Mt. Sinai. 

Nisan thinks the scramble for patients will continue to heat up as 2016 gets underway.  


Gone are the days of the 250k to 750k SF community hospital, according to Guy Leibler, the president of Simone Healthcare Development and a panelist next week. 

Instead, the future belongs to 3k SF urgent care facilities, 10k to 30k SF specialty centers and 30k to 100k SF medical office buildings. Going forward, that means more construction overall but a smaller footprint for each project.

That’s because Obamacare and technological developments have led to the widespread adoption by providers of a healthcare model Leibler likes to call “retail healthcare.

In a nutshell, that means healthcare providers are moving away from the traditional model of community hospitals and toward a future where healthcare facilities are smaller and more widely dispersed

The recent explosion of urgent care clinics is just the tip of the iceberg for this ongoing trend, with cancer centers, ambulatory surgery centers and diagnostic facilities, among many others, increasingly being built on a stand-alone basis. 

Meanwhile hospitals, Guy says, will increasingly shift toward filling specialized niches, like “specialty care, high level care and types of surgery that just can’t be done in an ambulatory center.”

“After five years of cutting our way to as much cost-efficiency as possible,” he says, “now providers are really looking at changing the model itself.”    


Obamacare and technological change have created a lot of opportunities for healthcare providers, but they’ve also created a lot of uncertainty.

Since a hospital can take years to build and no one wants to be caught flat-footed by shifts in the market, Nisan says providers are increasingly looking to modular construction and design-assist contracting to reduce construction time and costs, and improve quality control.

Modular construction—where buildings are built off-site and then shipped to their final location—can knock 40% to 50% off total construction time in some cases, Nisan says. 

Meanwhile design-assist contracting loops subcontractors into the design process from the get-go, making the whole process more attuned to current market conditions and lowering costs overall.

Providers are also increasingly looking to third-party financing and development in a bid to stay agile and keep up with demand, according to Glenn Grube (pictured here in his office), a program director at Faithful+Gould and a moderator at this year’s event.

“The New York metro area systems have been slow to make use of alternate methods of capital financing and project delivery,” Glenn says. 

He says that could very well change in 2016. You can learn more next week at our State of New York Healthcare event.