D.C. Hospitals Push Forward With Expansion Projects Despite Shift To Telehealth

The coronavirus pandemic has put a strain on hospitals and led them to increase their telehealth services, but several health systems in the D.C. area are still moving forward with major new projects to expand their real estate footprints. 

Executives at Kaiser Permanente, Children's National Hospital and Whitman-Walker Health discussed their expansion plans and their response to the pandemic Thursday on Bisnow's Greater D.C. Healthcare Update webinar.

Whitman-Walker, after redeveloping its 14th Street headquarters last year, signed a lease in November 2019 with Redbrick LMD to build a new 116K SF health center on the St. Elizabeths East campus in Congress Heights. 

The project is expected to break ground in March and open in Q2 2023, Whitman-Walker CEO Don Blanchon said. Half of the facility will feature Whitman-Walker's main healthcare programming, such as primary care, ambulatory care, dental and a pharmacy. The facility will also feature space for a research, education and training element, and it plans to sublease space to community partners. 

"This is going to be in effect our hub for the next 30 years," Blanchon said. "It is a dream that I've been chasing for about a dozen years now. It's challenging for an organization like Whitman-Walker, which serves 20,000 community members in the Metro Washington area, to try to find the right space and the right location that's both accessible and affirming to the different types of clients we serve."

While it is continuing with the real estate expansion it planned before the pandemic, Blanchon said he thinks the coronavirus will create a long-term shift toward serving more patients through telehealth rather than in brick-and-mortar facilities. 

"We are so adverse to change in the healthcare sector, and this isn't a time to be faint of heart," Blanchon said. "We are going to fundamentally look different. There's no possible way to go backwards after this. I daresay we need to get used to 50% to 70% of our visits are going to be through technology or at home. That's where we're headed."

Children's National is nearing completion on its 12-acre research and innovation campus in Northwest D.C. The project involves redeveloping multiple buildings on the former Walter Reed Army Medical Center campus, which sits 4 miles north of Children's National's Michigan Avenue hospital. 

The health system acquired the site in 2016 and broke ground on the project in November 2018. Portions of the new campus are expected to deliver before the end of the year. 

Johnson & Johnson is leasing part of one building for its JLabs Incubator, which will have space for 50 healthcare-focused startups. The incubator is expected to open by year's end, Children's National Project Director Irene Thompson said. 

Children's is planning to move three of its research divisions into the campus by July: the Center for Genetic Medicine Research, the Molecular Diagnostics Lab and the Rare Disease Institute. The Rare Disease Institute and its primary care service also have clinical components expected to begin in July. 

"The hospital was finding that our inpatient census was consistently high and we needed to find new ways to expand our inpatient beds, but the hospital is located on Michigan Avenue on property that we have no opportunity to expand," Thompson said. "But we do have a significant research component in the hospital, and when the Walter Reed Army Medical Center became available, we pursued some buildings that could directly align with the needs of the hospital."

Thompson also said that she expects the pandemic to lead to a long-term shift toward telehealth, and she thinks that is a benefit for the industry. 

"Telehealth is faster, easier and less expensive," she said. "This country has struggled with finding that an acceptable way to see a doctor. Now they've been forced through it from the sides of the providers and the patients, they will really get over this hump and be accepting of that way of care delivery. I think that's a real plus for everyone involved."

Kaiser Permanente, a national healthcare provider with a large footprint in the D.C. area, has five new facilities underway in the region, Kaiser Permanente Regional President Ruth Williams-Brinkley said.

In Prince George's County, Kaiser Permanente has a new 46K SF medical center underway in Bowie that will open next year, and it is replacing its Hyattsville facility with a 48K SF project expected to open in 2022. It also has a 222K SF Baltimore County project that she said will open in 2022. 

In Northern Virginia, it has a medical hub planned in Woodbridge she expects to open in 2022. It is also planning a replacement facility for its Springfield hub.

Kaiser Permanente has also experienced a significant shift toward telehealth during the pandemic, and Williams-Brinkley said that is changing how she thinks about its real estate needs. She said it had transitioned 90% of its services to telehealth early in the pandemic, and now it is around 50%. 

"I think that telehealth and the impact it's going to have long-term, it's not going to go away," she said. "Not everything is going to be done with telehealth, but we're going to have to size our buildings and plans to incorporate that."