The healthcare industry faces significant challenges, from talent shortages to the growing impact of inflation on operational costs. During the recent Colliers National Healthcare Conference (NHC), a panel of providers delved into these pressing issues and explored strategies for healthcare organizations to adapt. The discussion highlighted the importance of long-term real estate planning, workforce solutions, and the evolving role of private equity in healthcare. Here’s a recap of the key takeaways from this insightful panel.

Innovative Financing and Real Estate Strategies

Although inflation has cooled somewhat, its effect on healthcare is still pronounced. Increased material and labor costs make it difficult to manage project budgets, and real estate plays a pivotal role in operational cost management, with long-term strategies now more crucial than ever.

Tight margins and high operating costs remain some of the most pressing issues facing healthcare providers. Financing challenges, exacerbated by inflation and high interest rates, have intensified the need for innovative real estate strategies. Healthcare systems are looking to regain control over their real estate assets in order to make more informed, strategic decisions. The demand for healthcare facilities continues to grow, but meeting this demand requires smarter, more efficient resource management.

Panelists emphasized that long term real estate strategies are now more important than ever, and more hospital executives are seeing real estate as a viable option for both reducing operational cash outflow and  maximizing cash inflow.

Staffing Solutions and Reimbursement Challenges

Intense burnout among healthcare workers is one of the leading causes of the current labor shortage  in the industry, as well as an ongoing concern among providers.

With workforce scarcities affecting many healthcare systems, creative solutions are being explored. In places like California, where the cost of housing is high, providing worker housing has shown to improve recruitment and retention. As leadership continues to hear from nursing staff that they cannot afford housing in the cities where they work, hospitals have begun providing affordable housing options.  This trend is expected to grow due to the competition for labor. Another successful initiative shared by the panel was hospitals providing childcare services. One panelist shared that their organization saw a 25% year-over-year increase in support staff, after implementing a child care program.

Improving Patient Care Through Real Estate Design

The panel emphasized that real estate decisions can have a direct impact on patient care. Thoughtful clinic design should prioritize both patient experience and physician comfort. A keen focus on efficiency, considering revenue producing space vs. non-revenue generating space, is also key.

The Role of Private Equity and the Brokerage Community

While private equity can provide much-needed capital, concerns about its impact on physician autonomy and real estate decision-making remain. The panel agreed that healthcare providers need to be proactive in maintaining control over their real estate assets to ensure sustainable growth.

The discussion also highlighted the importance of alignment between the healthcare and brokerage communities. With high turnover rates in healthcare leadership, brokers play a pivotal role in ensuring continuity in long-term real estate strategies. Effective communication and an understanding of both healthcare and real estate sectors are key to bridging this gap.

Looking Ahead

The healthcare industry is at a crossroads.  Rising costs, staffing challenges, and financial pressures are making it difficult for providers in the current environment. However, by embracing innovative real estate strategies and fostering collaboration between healthcare systems and the brokerage community, there is a path forward for more sustainable operations and improved patient care.