Written by: Fady Barmada and Jake Dinnen
When you think of superheroes, what comes to mind? Superman. Wonder Woman. Spiderman. But Healthcare Real Estate (HRE) Professionals? Maybe not. Until now. Armed with strategic data, powerful analytics, and reports that tell the story, this new breed of superhero may be just what the doctor ordered.
Real estate markets around the world are in flux, and the U.S. is no exception. As growth areas emerge, health systems enter the race to capture the best healthcare consumers, facilities, and providers to serve them.
So, the question is, how can real estate professionals help a health system or medical practice compete and win in high-growth markets? The answer: strategic healthcare real estate data and insights – a developer’s new superpowers.
The use of strategic healthcare real estate insights to identify the right future home for an outpatient clinic, ambulatory surgery center, cancer center, inpatient rehab facility, or a behavioral health clinic is made easier through a unique combination of data sources and analytics. Top-tier healthcare insights can be drawn from patient claims, mobility/cell phone, and health-centric consumer behavior data. On top of other typical property data and analyses, combining the unique insights provided by these new superpowers allows a more holistic and granular assessment of the true potential of a healthcare location and its service area.
Armed with these new superpowers, what critical questions can healthcare real estate developers now answer? Plenty. Here is a sampling:
Where are the best markets?
What area or areas are growing the fastest?
What service needs do those populations have?
What providers are in the market right now to serve those needs?
Is there currently a net need for additional providers?
What type of growth can be expected in the future, and how many providers will be needed?
Who are our best healthcare consumers and what services will they need/demand?
How do these consumers differ behaviorally? How can we segment them based on desired behaviors?
How do these consumers choose to engage with healthcare? How can we better predict their visit-based needs?
What marketing campaigns will appeal most to our intended consumer groups? What are the best ways to reach them?
Who are the best providers and where will they be housed?
Who are the most productive providers? What are their referral patterns?
What does the current residential real estate market look like? Is there space available now? Are there opportunities for housing development?
Can we use investment strategies in facilities as a catalyst for physician recruitment and retention?
In which facilities should we invest to attract and retain these patients and providers?
Which facilities in the area meet the criteria we are looking for?
What and how many competitor locations are nearby?
What are the traffic levels of the roads leading into the service area?
Behind all successful superheroes is a secret weapon - the ability to fly, a lasso of truth, a tingling spider sense. Think of strategic healthcare real estate data and insights as the secret weapons in the developers’ arsenal, enabling them to stay a step ahead of their clients and competitors.
Healthcare real estate professionals can use this data and insights in powerful ways. Here are three examples:
Superpower #1: Better Underwriting
Data about home starts and new employers, while sometimes difficult to get, can help developers identify area hotspots. Armed with intel like this, developers can sharpen their market demand assumptions and narrow the field to the most attractive site(s) when assessing state, MSA, and city potential.
Superpower #2: Better Site Assessment
Once a site has been identified, this new weapon provides access to a wealth of complex, integrated data sets that enable a myriad of analyses. Developers can define a custom outpatient service area, compute current patient utilization rates of nearby care locations, project supply and demand down to the service line level, and more.
Patient Care Locations | Custom Service Area - Nashville, TN. Courtesy: Pivotal Analytics.
Projected Need for Care by Service Line | Custom Service Area - Nashville, TN. Courtesy: Pivotal Analytics.
Superpower #3: Better Land Valuation
Take analyses a step further by using data and analytics to determine what rents key service lines can support. Using CMS, private payer, and other data sources, real estate professionals can go beyond high-level averages to uncover reimbursement rate differences among services and facilities. Not knowing the differences can make or break rental rate assumptions and drastically impact the value of the land in question.
No more, Build It and They Will Come. No more high-level assumptions based on scant data or a static planning process that can cause a healthcare investment to fail. Health systems that can leverage the wealth of data out there will be the ones who succeed. And they can, with their friendly neighborhood healthcare real estate superhero by their side.
Developers and investors use Pivotal’s data-driven insights to assess new markets and pinpoint strategic healthcare real estate opportunities for their clients and prospects. Schedule a free consultation to learn how our proven methodologies and BI platform can work for you.