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Our Experts on Being Hyper Efficient and the Future of Real Estate in Healthcare

Healthcare systems have missed the boat on consumer-driven healthcare and are now rushing to catch up. That's the message from members of our panel of industry experts during our San Diego Healthcare Expansion Forum last week at the Westin San Diego.

Scripps Health's Ross Caulum (on right) says his frank opinion is the hospital systems were asleep at the switch. "We did not hear what the market wanted,” he says. “We didn't set up the access points that you as the consumer wanted. So therefore we now have Walgreens, Rite Aid, CVS, Target, you name it, in primary care.”

To that end, Ross says Scripps has established a string of HealthExpress clinics in office complexes to be there for tenant employees. It's Scripps' effort to reach out to the consumer outside the hospital. “Wouldn't you also like to be able to see a doctor before you go to work, or after you get home from work? Those are the things that we are struggling with,” he says.

Ross was part of a lineup of experts who included Allen Matkins' Fernando Villa (our moderator), UC San Diego Health System's Matt Jenusaitis, Alvarado Hospital's Brian Kleven and Ventas' Philip Kayden. Matt called the current trend of consumers wanting on-demand high-quality medical service at low cost a “perfect storm of challenges." He says it's really hard to reconcile all of them and find the optimal solution. It's not that there isn't raw demand either: The Affordable Care Act provided an influx of millions of new patients into the healthcare system.

And health systems are especially focused on providing care that is most efficient—thereby reducing costs. Real estate is a big variable in that equation, Ross says. “The buzz word is we have to be hyper efficient,” he says. “The hospitals and doctors have to figure out how to do more healthcare delivery to the community with less real estate. Because that real estate is incredibly expensive.” Brian says consumers are even pricing medical procedures to find the best deal—a trend he is encouraged by. “It should've happened all along. You do it when you go buy a computer. You shop the market. So you should do the same thing for your health,” Brian (on right) says.

Fernando also asked how site-neutral Medicare—where health systems are paid less for care provided in an outpatient center than at a hospital—would impact the growth of the industry. It won't stop growth. But it'll change how health systems conduct business, Brian says. It will encourage more telemedicine, and will strip down architectural requirements at MOBs, panelists say. “We're going to evaluate what services we put more than 250 yards away from a hospital more carefully,” he says. “I actually think this is the first smart thing the government has done in awhile.”