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Healthcare Reinvents the Wheel

Forget the hub-and-spoke: a constellation might be the best way to describe the model that healthcare networks follow today. (Perhaps Mars One will open an urgent care center on the Red Planet.) It's one of many insights from yesterday's Bisnow Philadelphia Healthcare Real Estate Summit at the Ritz Carlton.

Trammell Crow SVP Cheri Clarke Doyle told the crowd of 250 that care networks are increasingly decentralized and outpatient facilities are being developed to be self-sufficient rather than feeding from a central hospital. (The birds are leaving the nest, does that mean hospitals will retire to Florida?)

Changing demographics and the Affordable Care Act have shaped healthcare real estate into a different beast, panelists agree. Cheri, above, sees the retiring Baby Boomers fueling a shift to more senior care in outpatient centers—mainly in skilled nursing facilities—and cites bundled payments as an effective way for both providers and patients to manage costs.

Main Line Health SVP JoAnn Magnatta says that the systems and networks are also staking out nontraditional territories to reach patients. Main Line has entered into the retail game, opening a 32k SF urgent care center, developed by PREIT, at the Exton Square Mall. She says it's a great option for busy parents who need to fit a doctor's appointment into their shopping errands. (Or need medical care after spending the day with their kids.) Green is also a driving force; its Lankenau Medical Center expansion, nearing completion, is built to LEED standards with hearty approval from the board—and those standards will shape it operations going forward.

Sustainability is on Health Care REIT management services VP Kevin Kirn's agenda too; his firm's developed a proxy program to maintain Energy Star standards in its over 14M SF of buildings nationwide. (Taking cues from investors, Kevin says Wall Street has established a positive correlation between socially responsible practice and economic performance.) When investing in new product, there are several avenues of financing, including construction loans with purchase options, as well as physician equity models. However, when it comes to costs, the hospital’s needs always take precedent over developer fees.

As an architect, Array Architects principal Jonathan Bykowski sees a turn to more collaborative models of delivery in medical facilities' design and construction. Integrated project delivery—or a variation he calls IPD Lite—is gaining traction, although with some reservations. He says IPD brings transparency to a project and accelerates its move to market, yet for many it’s a fundamentally different way to work; clients are still concerned about assuming their share of risk. (We thought doctors loved to get their hands dirty?) And while green building isn't necessarily on the back burner, a lot of clients place the value of their developments over the bragging rights afforded by certification.

Stantec VP Dave Lamontagne, who moderated, has overseen the growth of the company's project management practice across the US. Among his projects are the $480M master plan for Main Line's Lankenau development, which includes the just-opened 285k SF Heart Pavilion with 96 beds for acute cardiovascular patients. Dave's team also oversaw the planning of the $80M Cooper Cancer Institute in Camden, which is pursuing LEED Silver.

During networking, we snapped Dave's colleagues, sponsor Stantec's William Milliken and Todd Kaufmann, with Brixmor Property's Michael Estroff, who were chatting about healthcare's growing retail footprint and care centers popping up in venues big and small.

We also caught up with sponsor Hillmann Consulting's Kristin Worrell and Henry Hillmann, who told us about the relevance of environmental assessment in healthcare. Particularly critical is emergency preparedness, they say; hospitals must be aware of the need for a proactive disaster response to keep operations running. (By "disaster," we're obviously not counting the Heartbleed bug, because who-oh-who could have prepared for that?) Stay tuned for more coverage from our event next week.