5 Key Areas of a Hospital's Strategic Real Estate Plan

As hospitals and health systems grapple with remodeling their clinical and financial futures, capital asset planning and real estate strategies are working their way to the forefront of the healthcare industry, according to a Jones Lang LaSalle news release.


Jones Lang LaSalle recommends that hospitals and health systems focus their capital asset plans around five areas:

1. Portfolio optimization. Portfolio optimization is an assessment that matches location and capacity with the organization's overall business strategy. This could help systems understand if their portfolio is in the right spot and is producing promised returns.

2. Occupancy cost management. An improved operating margin can be a result of properly managed facilities that deliver sustainable cost savings. Two of the biggest components of occupancy cost management are energy cost control and carbon footprint management. For example, San Francisco-based Dignity Health, formerly Catholic Healthcare West, drove down energy consumption by 26 percent, which led to $5 million annually in savings, according to the release.

3. Ownership strategy. Competition for scarce capital, a need for flexibility and a closing window on "strategic opportunities" are some of the factors hospitals need to consider as they evaluate their portfolios and question if they should lease or even discard some assets. Identifying and selling land and buildings that are no longer needed is one such strategy.

4. Execution approach. Hospitals and health systems that are "action-oriented," instead of reactive, could lead to an effective execution of the strategic plan. "Buildings must be purchased, built, renovated and maintained, and resources — from energy to supplies to services – must be acquired," said Scot Latimer, managing director of Jones Lang LaSalle's capital asset strategy practice for healthcare, in the release. "Repetitive transactions are opportunities to leverage the scale and buying power of the entire organization and work in partnership with the best and brightest service providers to achieve great outcomes for patients and staff."

5. Organizational effectiveness. Asset management, operations and execution can be best applied if healthcare providers look at other successful examples and have the right partners.

Related Articles on Hospital Real Estate:

Healthcare Real Estate Demand Expected to Remain Strong in 2012

A New Green Standard? How Hospitals Can Utilize Geothermal Energy to Save the Environment and Money

Healthcare Private Equity: Opportunities, Outlook for 2012

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