3 ways health systems can leverage real estate to achieve savings, growth

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Hospitals and health systems can realize untapped savings by better managing their real estate footprint and strategy, according to a July 19 report from real estate company JLL. 

The report analyzed ways that providers can achieve better cost management, care coordination and patient access through real estate strategies that promote systemness. 

"Real estate can be a means to achieve greater benefits of systemness, and real estate asset performance can be improved by a more systematic operational approach," JLL said. "It's a mutually beneficial relationship that improves value for both owners and occupiers in the long run."

Here are three strategies to leverage real estate to grow and find cost savings, according to JLL:

1. Establish a solid location strategy. Care locations influence brand perception, patient access and care experience, which makes these decisions important, JLL said. To determine the best opportunities for growth, health systems should utilize location analytics and population trends, according to JLL.

2. Create integrated facilities management programs. Establishing facilities management programs can drive savings and prevent deferred maintenance on buildings, JLL said. Having a plan that is integrated can pool risk while aligning resources, mitigating overlap and reducing solos. One of the best ways to ensure an integrated program is to collect data on the facilities themselves, including utilization rates, energy usage and maintenance schedules. 

3. Boost real estate value through systemness. Typically, health systems that are more integrated have better credit ratings than less integrated systems or individual hospitals, JLL noted. Credit strength can be used to negotiate more favorable lease terms or drive greater returns in the event of a sale or leaseback transaction. As a result, integrating real estate locations is beneficial to real estate value. "Systemness can create value for real estate assets that health systems can monetize, allowing systems to redeploy capital to expand or modernize care delivery or use to fund other priorities," JLL said.

Access the full report here

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