Real estate could have a role to play in alleviating the shortage of medical personnel

Battered by the lingering pandemic, rising inflation, supply chain slowdowns and recession fears coming true, the healthcare industry has faced crisis after crisis over the past few years.

But it could be commercial real estate to the rescue, at least in part, to help solve one of the industry’s oldest but enduring problems: chronic healthcare staffing issues.

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Albert Lord of Anchor Health Properties, Phil Mahler of TopMed Realty, Shawn Janus of Colliers, Allyson Hansen of the Medical District of Illinois, Ryan Cos. Curt Pascoe and Michael Becker of Ann & Robert H. Lurie Children’s Hospital in Chicago

Health experts at Bisnow’s The Chicago Healthcare & Life Sciences real estate event on August 11 at Illinois Science + Technology Park said that while the challenges for the industry are apparent, real estate is poised to be a partner in helping healthcare healthcare to reconsider how they use space for patient care in today’s market, especially in light of staffing shortages exacerbated by years of a punitive pandemic.

“A lot of what we see in [healthcare] Real estate decisions use real estate in ways that leverage staffing issues,” said Ryan Cos. which makes it possible to eliminate a person at the reception or to eliminate a nurse’s position.

Even before the pandemic, the country suffered from a lack of trained nurses and other healthcare workers. Then some 1.5 million healthcare jobs were lost in the first two months of the pandemic alone as clinics closed and US hospitals curtailed services. Most jobs have since returned, although healthcare employment remains 1.1% below pre-pandemic levels, according to Colliers’ 2022 Mid-Year Healthcare Outlook – many of them have lost permanently due to burnout.

Shawn Janus, national director of U.S. health services at Colliers, said that while he has seen persistent staffing shortages over his past 20 years in the industry, he is very concerned about the impending shortage. doctors, which the Association of American Medical Colleges says will cause the United States to need 37,800 to 124,000 more doctors over the next 12 years.

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Joe Concepcion of Singerman Real Estate, Suzet McKinney of Sterling Bay, Mark Goodman & Associates of Mark Goodman, Bernie Baker of Management Consultants, Chicago ARC & Farpoint’s Kate Merton and John Conrad of Illinois Biotechnology Innovation Organization

As healthcare facilities seek to trim and cut costs in the face of rising inflation, panelists said, they are also making cuts to administrative expenses to account for pandemic staffing losses and Millennials’ growing demands for flexible work options.

This is where real estate can step in, helping healthcare consolidate or reconfigure space to minimize staffing shortages.

“A lot of these hospitals have this administrative space in the hospital, which is already certified for the joint commission and other regulatory bodies, so it makes sense to turn it into clinical space,” said Allyson Hanson, CEO and Director. executive of the Illinois Medical District. .

This shift isn’t always easy, however, according to Janus, who said health system leaders are cautious about using space they have no way to fill given staffing shortages. current. He said hospital executives’ internal goals to reduce administrative space by at least 50% are the biggest shift the healthcare industry is seeing.

To counter this, Hanson said, helping healthcare providers find new business models that reinvent patient care methods and services in the face of downsizing and downsizing is paramount.

Telemedicine is a way for industry providers to continue to optimize for consumer needs. This means that the technology CRE brings must be relevant.

Michael Becker, senior director of property services at Anne & Robert H. Lurie Children’s Hospital, told the panel that the percentage of people contacting clinicians is practically on the rise, even now that panic over the pandemic is mounting. concludes, adding that there is particular room for growth when it comes to behavioral health services.

“Basically we are stable before the pandemic [levels] and we are now stable at 7% [of total visits] so our usage has doubled in a few years,” he said. “I see it continuing to grow, but not dramatically, at least not over the next five to 10 years.

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Susan Stearn of Rush University Medical Center, Carl Wolf of LanzaTech, Kurt Lindorfer of PARADIGM Structural Engineers, Scott Brandwein of JLL, Randal Gruberman of Level-1 Global Solutions, Jason Utah of Skender and Eric Atkinson of Siemens

Becker said that although telemedicine grew from 3% to 40% at the height of the pandemic, it was extremely challenging for the hospital’s technology team. While technology integration is important, he said, physical facilities will continue to drive the industry.

In fact, demand for medical office buildings continues to drive new construction activity and acquisitions throughout Chicagoland. And while cap rates rose on average, they continued to compress for on-campus medical office buildings that set record highs for asking rents and sales volume in 2021, despite stressors. pandemic.

Similar resilience is expected to persist for the near future.

“Medical practice versus office or retail or some of the other food groups is still considered a better investment and will hold up better in this turn,” Janus said.

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