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Coronavirus Pandemic Boosting Demand For Telemedicine, And Hospitals Are Hurting

The coronavirus pandemic sped up trends in healthcare that had gone on for years, for instance, the growth of telemedicine and ambulatory services, forcing hospitals to adjust their operations accordingly.

Patients are becoming increasingly comfortable scheduling virtual visits with their healthcare providers, according to Alicia Wilson, the vice president for economic development at Baltimore’s Johns Hopkins University and the Johns Hopkins Health Care Systems.

Before the pandemic, about 11% of patients accessed telehealth services. In the midst of the worst health crisis in more than a century, 46% of patients rescheduled their in-person visits online. The online views can take several forms, from injury triage to more formal consultations. 

“The advent of telehealth does change the way that health systems think about space and think about what it means to render care,” Wilson said during an Aug. 13 Bisnow webinar on healthcare facilities. “We will be building virtual into the healthcare model.”

Clockwise from top left: Johns Hopkins' Alicia Wilson, Bremmer Real Estate's Matt Bremmer, Jefferson University's Clayton Mitchell and JLL's Ben Appel.

Philadelphia’s Jefferson Health hospital network faces challenges on many fronts.

For one thing, the company has added 11 hospitals over the past five years and reported a loss of $298.71M in the fiscal year ended June 30. Jefferson missed earnings targets it provided to lenders and has hired a consultant to help it develop a financial recovery plan, according to the Philadelphia Inquirer. Further complicating the picture for Jefferson is Philadelphia’s high poverty rate, according to Clayton Mitchell, Jefferson’s senior vice president for real estate and facilities. 

“Healthcare was already challenged in terms of cost and affordability,” he said.  “I believe that COVID-19 just accelerates the imperative for us to get control of those [issues].”

Jefferson announced plans in June to build a 450K SF ambulatory care clinic in Center City across the street from the company’s flagship hospital. The company also is in the midst of a $250M upgrade to its hospital in Cherry Hill, New Jersey, and a $222M expansion at its Washington Township facility.

Jefferson has temporarily paused new capital improvement projects because of the pandemic. At the same time, it is trying to drum up more business to tackle maintenance projects that it has been forced to defer, Mitchell said.

The road ahead for hospitals in Philadelphia and the rest of the country isn’t going to be easy.

Earlier this year, Hahnemann University Hospital closed its doors after serving Philadelphia for more than 170 years. With its prime Center City location and nearly 2M SF of available space, the property is expected to attract considerable interest from buyers.