Hospitals And Healthcare Are Changing, Creating New Challenges And Opportunities
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From changes in delivering care to consolidation, forces in play now will have a profound effect on how healthcare is approached and designed for in the future.
In California, there is the added challenge of seismic safety requirements that are expected to be fully in effect by 2030 and have already driven a rash of new hospital development as well as the anticipated closure of hospitals that just can't make the grade.
With so much going on, it is a good time to look forward at what is to come in healthcare, which will be the topic of a panel at Bisnow's all-day National Healthcare NorCal event April 25.
Dr. George Tingwald, Stanford University Medical Center's medical planning director and one of the event speakers, is already keeping an eye on what will drive healthcare in the state, including the seismic requirements.
"I happen to believe that the state's doing the right thing," Tingwald said. "It makes no sense to have hospitals that are not going to be in operation after an earthquake."
But, because the requirements did not also come with funding, it means that some hospitals will go out of business because they can't meet the requirements and that will drive further mergers and acquisitions within the space, he said.
Consolidation will continue in the industry. Most likely, the ones to go under will be independent, midsize nonspecialty hospitals, he said.
He believes networks like Kaiser based on systems of community-based hospitals will survive, and he anticipates there will be more formal networks formed around academic medical centers that build a referral network with community-based hospitals.
The seismic requirements have driven new healthcare construction in the past 15 years, and an enormous amount of work remains for inpatient facilities, Tingwald said. That will require both retrofitting and new buildings, and that means architects and engineers will be in high demand.
A present lack of trained, skilled construction and design professionals means higher prices, said Paul Coleman, deputy director of the California Office of Statewide Health Planning and Development, who will also speak at the event.
"Because of the booming economy, hospitals are finding that the bids they are receiving are much higher than the cost budgeted, for example a hospital reported that they received only one bid on a new building project, indicating a lack of competition and resulting in higher costs than budgeted," Coleman wrote in an email.
Healthcare staffing is another big challenge ahead. Aging is hitting both the general population, which is driving up healthcare demand, and medical workers, which means more retiring when there are fewer workers coming into the medical field.
And, as with anything in California, part of the equation comes back to housing. That applies both to affordable housing for hospital staff near medical centers as well as housing security, which has been shown to lead to better health outcomes for patients.
There is also an increasing need for short-term housing and hoteling for patients as hospitals move to a more outpatient environment, Tingwald said. That is a problem in Palo Alto where a nearby hotel room can cost $600 a night, he said. The solution for that will likely be partnerships.
"Healthcare systems are not good at running hotels. They're terrible at it," he said. "There will be partnerships in how these things are done. But a lot of that's going to get into issues of who owns the land and how land is zoned for these kinds of changes."
There has been a shift from inpatient to outpatient care — at Stanford, the university hospital started generating more money from the outpatient setting than inpatient in 2017 — and it is not going back, Tingwald said.
There is an evolving need for hospitals to be built so they can reflect changes in patient expectations, whether it be younger generations using healthcare, the more acute needs of patients who need inpatient hospital care as less-intensive care shifts to the outpatient environment and to take advantage of the latest advances in new medical technology and new methods of healthcare delivery, Coleman said.
Hospitals can address some of those changes by designing for versatility, adaptability and flexibility, he said. Of course, some of those shifts will require changes to codes, regulations and Centers for Medicare & Medicaid Services rules. There is already uncertainty in the direction of healthcare insurance and CMS reimbursements, which is resulting in delays, downsizing and the elimination of some hospital construction projects and adds to the challenge, Coleman said.
A big shift that could make a difference quite rapidly for the healthcare system would be for reimbursement to keep up with technology, Tingwald said.
Right now, up to 40% of Kaiser's patient visits are done by telemedicine, which works for the healthcare system because it saves money with telemedicine appointments as both insurer and provider. Tingwald said fee-for-service providers have to actually see a patient to get paid, and that has slowed adoption.
"Once we get the payment system worked out so they can do better patient care without all these visits to the doctor, once we figure out the payment mechanisms, the whole system's going to turn over very, very quickly," he said.
Coleman also noted how codes, regulations and CMS rules are not keeping up with the rapid pace of change in healthcare delivery methods, materials and equipment. There needs to be a process that prioritizes and expedites reviews of alternate methods of compliance, alternate uses of space and new concepts of design, treatment techniques, new medical equipment and program changes, he said.
Those in the industry cannot think they can continue to do what they have always been doing. They have to change or be changed, Coleman said.
Steps happening now to shape that change, from an OSHPD perspective, include the development of practical, cost-effective building standards and regulations. Coleman mentioned two new categories in the building standards code: facilities where acute care services have been removed and acute psychiatric hospitals. Those buildings, as well as skilled nursing facilities, need only comply with the model building codes and not more restrictive hospital building requirements, he said.
What doesn't Tingwald see happening? A single-payer system that pushes out private insurance.
Even countries with fully nationalized healthcare have very robust private networks as well, he said.
"It's never happened in this world, and it's not going to happen here where people demand high-quality healthcare," he said.
Find out more about what will affect healthcare in the years to come at Bisnow's National Healthcare NorCal event April 25 at The Fairmont San Francisco.