Adopting a real estate strategy in healthcare
Written by Philip Hall, Director and Chairman – Healthcare, Jones Lang LaSalle
At a recent meeting of healthcare property professionals in Paris, I was struck by the common issues faced by European nations. The legislation and funding mechanisms may be different but the pressures facing all countries are similar. For one thing, we are all getting older. Even countries like Ireland, with relatively high numbers of young people, will have to provide for increasing numbers of elderly. This issue is not just confined to the developed western nations; it also applies to countries like China. Property investors understand this and they like the fact that demand is relatively stable and predictable.
It is also clear that countries are struggling to meet the rising cost of health and social care needs. Budgetary constraints mean driving down tariffs and costs and with occupational costs accounting for up to 25 percent of all outgoings, savings here have to be a major plank of any efficiency drive. The better utilisation of buildings, making buildings more energy efficient and disposing of surplus assets can all make valuable contributions. Buildings can also be adapted to create new income streams. However, for maximum effect estate strategy needs to be seen as integral to the business case rather than an afterthought. We are still far from achieving this.
Technology is also impacting on our use of healthcare assets. It is helping to reduce the average stay in hospital and boost day surgery, a trend which opens up opportunities for new investment as well as challenges for established healthcare providers.
There is a growing preference to keep people at home for as long as possible, boosting the demand for domiciliary services and reserving residential care for only the most physically and mentally demanding. Private equity is being increasingly attracted to invest in ‘asset light’ businesses such as domiciliary care which are seen to have considerable growth and consolidation prospects.
But what are the overall implications for property investors? The first is that demographics will underpin a growing market. The second is that cost constraints herald a greater role for the private sector generally. Better use of real estate will play a large part in driving forward efficiency savings and investment in new assets will also be needed to replace redundant stock and to meet rising consumer expectations. Providers with ‘legacy’ assets will face increasingly tough choices. Meanwhile, design needs to keep pace with changes to the way in which services are delivered. We still see too many expensive, over engineered buildings, which give little weight to the flexibility of use in the future. Estate strategy needs to be seen as integral to the operational strategy and not as an appendage.
Scot Latimer, from Jones Lang LaSalle (US), on a strategic healthcare real estate plan:
The Healthcare Global magazine is now available on the iPad. Click here to download it.
Dexcom: changing the lives of people with type 1 diabetes
It is estimated that 9.3% of adults around the world are living with type 1 diabetes, which amounts to a total of 463 million people. A further 1.1 million children and adolescents under the age of 20 are living with the condition.
Unlike the more prevalent type 2 diabetes, where the body still produces insulin and symptoms develop slowly, people with type 1 diabetes need regular insulin injections or pumps, and must monitor their sugar levels frequently.
In recent years a number of remote glucose monitoring systems have become available that patients can use at home. These work with a sensor, usually placed under the skin, that measures glucose levels every few minutes. This information is then transmitted wirelessly to a device like a smartphone or tablet, which can then be shared with their clinician.
British actress Nina Wadia's son Aidan, 14, has type 1 diabetes, and has been managing his condition using Dexcom, a glucose monitoring system used by patients all over the world. Here Wadia explains how Dexcom has improved their lives.
As a parent of someone with type 1 diabetes, what is your day-to-day life like?
Being able to take a breath, think and pivot constantly without getting frustrated becomes an essential mindset because sometimes it feels like each day is determined to be different from the day before. Whatever worked yesterday is going to misfire today.
Which areas of yours and Aidan’s life are most impacted by diabetes?
The one thing that you have to fight hard to reclaim is spontaneity, especially when it comes to food and exercise. It’s only when this is taken do you realise how essential each one is. You can be flexible and there are no real limits, but only in the sense that a great athlete can be flexible without limits because they’ve trained super hard to be that way. So we’ve all had to become athletes when it comes to being spontaneous.
How has Dexcom helped you and Aidan?
Dexcom has brought future science fiction to real life today. The continuous glucose monitoring system is tiny, sits discreetly on his body and gives him a ten-day breather between sensor changes, so it's goodbye finger-pricking seven times daily.
Dexcom is totally active at a grass roots level and for Diabetes Awareness has pledged to donate £2,000 if #DexcomDiabetesStories and/or #DexcomWarriorStories is shared 200 times! I’ll be sharing more on social media and would love to hear how other families are winning their fights.
Maybe most importantly Dexcom is trying to introduce a reimbursement programme for type 1 diabetes patients which will give greater access to modern, life changing hi-tech. I want to spread the word on the importance of accessing it through this campaign.
If you compared your life today with how it was before Aidan was using Dexcom, what has changed?
It's always working, which lets him take his mind off diabetes for longer stretches. It also lets me get off his back. We both receive alerts so I no longer have to pester him by asking him what his number is, and especially importantly, I don’t have to wake him at night to prick his finger if I’m worried. Dexcom gave us back our sleep!