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Healthcare Buildings Need To Modernize Despite Uncertainty

Healthcare real estate is changing at a more rapid pace than perhaps any other area of commercial real estate.


At Bisnow's national healthcare conference in Philly this week, construction and design panel moderator Nisan Gertz of Macro Consultants pointed out that healthcare real estate makes up about 8% to 10% of all the money spent on commercial real estate in the US, a figure that underscores the importance of the industry to the national economy.

In the last few years, healthcare has experienced a paradigm shift in how it interacts with patients. Cooper Robertson partner Don Clinton (above) put it pithily.

“Patients are not patients," Don said. "They’re customers."

Viewing patients as customers to be recruited and retained rather than patients to treat means that providers are more concerned with the design elements of their buildings than ever before.

“It feels like there’s a pressure in an industry with a lot of uncertainty to build well,” Don says. “It’s a good pressure, and it comes along with changes in the market.”

It may be a good pressure, but some providers don’t quite have the language or expertise to describe what they want.

“Clients seem to almost demand a simultaneous combining and collapsing of scale,” says EwingCole’s John Soraci (below, right). “It’s incumbent on us to understand who the client is, and what their perspective and currency are.”

George Hurley of DPR Construction (below, center) agrees that many of the design choices that providers consider so critical are largely “up to us.”

“But we’re all sort of returning to this phase where design is becoming even more important,” George said.


So with the stakes so high and guidance in short supply, designers are looking more to retail for inspiration, just like developers. Retail is adjusting to the changing customer base, and so must healthcare.

“[Medical visits are] not business transactions,” John said. “They’re experiences that aim to build a long-term loyalty.”

One of the bigger weapons retailers have in understanding their clients is the emerging revolution in data, and healthcare builders and designers need to follow suit. Clinical data gives insight into patients, which in turn can provide directions for medical buildings.

“[Data is] not driven so much on the business end, but on the pure healthcare end,” Don said. “What’s needed turns into 'where do you build?'”

Where to build matters, but older facilities that get left behind the wave of the future need to be accounted for. Some are cheaper to tear down than renovate, but regardless of what form redevelopment takes, older hospitals need to be thought of differently in their reincarnated forms—a trend that includes an increased focus on mixed-use complexes.

“Hospitals are seeing themselves as urban residents, to some extent,” Don says. “They need to fit into their neighborhoods and contribute to their neighborhoods, and that’s part of what makes them successful institutions.”