Finding success in the healthcare real estate market is can be challenging. Making accurate, credible forecasts can make or break a company’s success. To complicate things further, an aging population and value-based care are changing when and where care is delivered. To compete and grow in this market, companies need deeper insight into both the supply and demand sides of their healthcare segment.
Fortunately, the healthcare industry generates a lot of useful data that real estate developers and investors can mine for insights. Medical claims, financial performance indicators, firmographic and quality metrics, affiliations, and a ton more serve as powerful tools companies can use to monitor trends and get a competitive edge.
In the rapidly evolving real estate market, healthcare commercial intelligence is more valuable than ever. This guide will show you which clinical trends and key metrics you should care about to make more intelligent real estate investments, more accurate forecasts, and win more business.
How is the healthcare real estate market changing?
Before we dig into the specific metrics that will help you optimize your growth strategy, let’s first cover the factors currently impacting the healthcare real estate industry.
- The staffing shortage continues to be an issue. Some of the underlying reasons contributing to the ongoing healthcare staffing shortage are how services are provided. The U.S. is currently facing a growing population of older adults. This, in turn, is creating a greater demand for physicians, nurses, and specialists trained to care for older patients—one that the current market is struggling to fulfill. For real estate investment firms, this change in patient demographics may indicate that more facilities equipped to treat older adults will need to be built, renovated, or expanded.
- Demand for services is shifting. The U.S. is currently in the middle of a five-year, $1 trillion revenue shift away from traditional healthcare payors and providers. Procedure volumes at lower cost of care sites—urgent care centers, ambulatory surgery centers—continue to increase. And with more big retailers jumping into the healthcare market, patients have more options available to them to receive the care they need.
- Economic conditions can paint a confusing picture. The health of the economy can strongly influence the value of real estate investment. Changes in interest rates, inflation, and employment all affect market demand, property prices, and monthly mortgages.
With a solid understanding of the new direction the industry is heading in, your real estate firm will be better prepared to navigate the market and quickly adapt to new trends.
How to succeed in healthcare real estate with contextualized data
To succeed in the fiercely competitive healthcare market, real estate companies need to know where to direct their investments, who the key decision-makers at a facility are, and how to find the most valuable partnership opportunities.
Getting the answers to these questions requires more than just good intuition. With the right healthcare commercial intelligence, your company can put the connections that shape the market in plain view, and create and execute a winning business strategy.
The healthcare industry, however, can sometimes be a tangled mess of disparate data points. Focusing on the seven key healthcare metrics outlined below can help you get a better understanding of the market from multiple perspectives and discover new accounts to prioritize and opportunities to explore.
Dive into demographic data
Understanding the demographics of an area—such as age distribution, income levels, and population growth—is crucial. It helps predict healthcare population needs, like demand for senior living facilities or pediatric healthcare services.
Analyze clinical trends and disease patterns
Tracking prevalent health conditions and monitoring health trends in a region helps identify areas where specialized facilities might be needed. For example, areas experiencing a rise in chronic conditions, such as asthma or diabetes, may require more clinics or rehabilitation centers.
Information on the size and scale of a facility—such as square footage, bed count, number of operating rooms, and so on—can assist with your real estate firm’s strategic decision-making as you identify ideal partners and make investments.
Examine quality metrics
Satisfaction scores, HCAHPS, and patient feedback regarding healthcare services and facilities can indicate areas for improvement or opportunities for investment in better-equipped organizations.
Research financial performance
Financially stable healthcare entities are more likely to engage in long-term agreements. As you evaluate potential facilities, consider metrics like net patient revenue (NPR), operating expenses, land improvement expenses, cash on hand, and more. These factors can help you identify viable partnerships and clients capable of sustaining growth and mitigate risk.
This type of data provides information about the relationships between healthcare organizations and providers. Knowledge of affiliations could clue you in to potential service line enhancements or help you find organizations that are part of larger health systems or networks, potentially indicating stability and expansion opportunities.
Access contact information
Of course, you’ll need to know who the decision-makers are at the facilities you’re targeting, and how you can best reach out to them. A phone number, email, or LinkedIn profile can all open the door to a future conversation. Keep in mind, however, the recency of the information you have access to. You don’t want to call an SVP just to realize they left the facility six months ago!
What it all means
Considering that advancements in healthcare are growing rapidly, and so is the population, the need for cutting-edge facilities has never been more relevant. Shifting demographics, evolving preferences for receiving care, economic changes, and the ongoing staffing shortage all contribute to an undeniable surge in demand.
So, whether it’s a new wing at a hospital, an outpatient clinic, or a specialized medical center, the landscape is changing to meet these needs. That means real estate agencies need all the healthcare commercial intelligence they can get to adapt to shifts in the market and succeed.
For more information on making optimal strategies and more accurate healthcare real estate forecasts, check out these resources:
- Watch our webinar for more examples of how to use healthcare reference, affiliation, and claims data to get a leg up on the competition.
- Read our blog on the five ways hospitals use RFPs.
- Get the latest insights on the healthcare staffing shortage, and how it’s impacting providers everywhere, in our Intelligence Report.
And if you’re a real estate investment firm looking to get hands-on with our healthcare commercial intelligence and see how it can help your business grow faster this year, then start a free trial today.