Healthcare Growth Spurt

Valley Health Gilroy Stantec The Registry real estate

Demographics, technology and new thinking are changing health care real estate


By Dorothy Lloyd

[dropcap]I[/dropcap]n the excitement of the Bay Area real estate market, healthcare development seems to take a back seat to the constant news coming from the technology and multifamily sectors. Even the mention of the word healthcare will likely take the discussion toward Obamacare and its impact on our lives. Yet, a steady and formidable development activity spurred by a massive demographic shift, continuing advances in medical research and biomedical technology and a new approach to health delivery continues to drive this sector, and its impact will be far-reaching across our region.

Hospital Development in the Bay Area The Registry real estateSixteen acute care hospitals in the Bay Area currently have a major construction project underway, approved or in the final review process. This amounts to almost 5 million square feet of advanced healthcare space and, as San Francisco Mayor Edwin Lee told the California Hospitals Political Action Committee in February, these hospitals, medical education and the biomedical industry add $16.7 billion to San Francisco’s economy annually and provide employment for more than 100,000 people.

Some of the facilities and infrastructure upgrades are driven by the need to physically secure buildings to withstand the next seismic shift. However, most of it comes as a direct result of technological advancements in the industry, which is providing a new perspective on delivery of medical services across the board. These new facilities have incorporated features demonstrated to reduce risk, speed recovery and improve health outcomes. They offer private rooms that reduce infection transmission, ambient noise and the need for intra-room transfer during a hospital stay. Nursing staff and other members of the clinical team have work stations located closer to the patient rooms, improving access to patients in emergencies. Clinical team rooms bring private conversations among members of the multi-disciplinary care team from public corridors into private conference rooms. They are state of the art environments revolutionizing the safety and efficiency of care-giving, and most importantly, increasing the effectiveness of healthcare delivery.

The interesting thing about these technical advancements is that they are coming at almost the same time as we are going through a significant demographic shift in our society. The new inpatient facilities will prepare the Bay Area for the anticipated need for acute care as the Baby Boomer generation tumbles into their 70s and 80s and brings greater impacts in healthcare delivery, healthcare research and innovative technology development. Healthcare providers have now focused their attention on expanding outpatient care delivery. Prior to being admitted for inpatient treatment, patients have as many as 20 to 25 interfaces with doctors and other clinical providers. An aging population and a monumental effort by insurers and providers to manage population health and healthcare spending wisely will emphasize comprehensive, effective healthcare delivery in physician offices, specialized ambulatory care environments and advanced treatment settings. Outpatient facilities will be especially important for patients with complex illnesses and chronic conditions complicated by age and obesity but will offer care environments for others suffering from chronic diseases that once guaranteed the need for long-term residential nursing care.

This is having a major impact on the entire process of delivering medical care, which also impacts the timing of that delivery. As the major healthcare providers focus on distributing outpatient services, encouraging patients to seek more frequent monitoring and intervention to maintain their health, they are beginning to change the way people look at healthcare and what to expect from their medial providers. Kaiser has initiated planning of a multi-specialty outpatient center at Mississippi Avenue and 16th Street, while UCSF continues to increase the distribution of primary and specialty service practices in San Francisco, the Bay Area and beyond. UCSF’s recent affiliation with the Children’s Hospital and Research Center Oakland will undoubtedly result in the realignment of affiliated referring physicians in the East Bay into new practice groups that will be further redistributed throughout that service area. Even large retailers, the typical big box stores, are incorporating retail clinics alongside their established high-volume pharmacy services. These groups are important referral points for both independent specialty physician practices and acute-care hospitals. Technology is enabling a different service model, and the consumers’ understanding of healthcare is changing toward wellness management and proactive monitoring instead of reactive service needs.

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Photography courtesy of Stantec; Above: Valley Health Gilroy exterior

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