Cincinnati's Independent Physician Collaborative Adds 10 More Practices- Now 439 Doctors

On the heels of January's public announcement of a newly formed collaborative among 8 larger Cincinnati physician groups, new updates indicate an additional 5 large Cincinnati practices and 2 larger Dayton practices have joined the effort. 

• Specialties include orthopedics, gastroenterology, urology, oncology and others. 
• According to Business First, this puts the total within the collaborative at 439 doctors and 3,480 full-time staff. 
• The Independent Physician Collaborative website is located HERE and links to the Business First Article is located HERE.

Insurance presses against hospital mergers (NY Times / Forbes)

Hospital merger announcements seem to be almost a daily occurrence. The reasons are somewhat obvious. Scale  offers efficiency. Better position for coordinating care among population(s). Strength in a competitive marketplace. The latter seems to have received some opposition lately, specifically in a New York Times article "Healthcare's Overlooked Cost Factor" and the article in Forbes in my blog posting below.
http://www.nytimes.com/2013/06/12/business/examinations-of-health-costs-overlook-mergers.html?pagewanted=all

Insurance begins opposition to hospital mergers - Forbes

Hospitals, Under Fire For High Prices, Say Mergers Overblown - Forbes

Nationwide Children's Adds 11 Acres

Nationwide Children's purchases 11 acres for $19.2 Million- the former Afrocentric Facility. The locations and sites are changing but the theme is continuing- hospitals are expanding in a big way!

Nationwide Children’s Hospital has stretched its real estate holdings along East Livingston Avenue from its main campus at Parsons Avenue all the way to South Grant Avenue.... The hospital on Thursday completed its $19.2 million purchase of 11 acres on Thursday when it bought the Africentric Alternative School’s football field and surrounding land. Link to article 

Source: Brian Ball, Business First

20 To Know in Healthcare answer a variety of questions

Business First recently published this distinguished list. Chad Pinnell (one of my partners) and I are very pleased to have been nominated. We were invited to participate in a round table with other nominees, and  Business First will be releasing an excerpt of the round table soon. Thanks to Business First and Clark Schaefer Hackett for creating this program provide a monthly spotlight for healthcare and other industries.

There are many interesting individuals on this list, and interesting is to dive into their responses to the questions:

     1.  Why did you get into this profession?

     2.  Is it as fulfilling as you thought it would be?

  

     3.  What’s the most exciting thing happening today in your industry?

     4.  What’s the biggest worry?

     5.  Name one thing you would change about the health-care industry in the U.S.

     6.  What do you consider your greatest achievement to be in your role with your company?

     7.  What do you feel you have yet to accomplish?

     8.  What’s one piece of advice you can give for to someone who wants to build a career similar to yours?

     9.  To what other industries should health care look for inspiration to be more efficient and  effective?

Nominees included the following, their names are linked to their responses for the above referenced questions:

Amy Rohling McGee, Health Policy Institute of Ohio

Dr. Nick Baird, Alliance to make US Healthiest

Kelly Kelleher, Nationwide Children’s Hospital

Clay Marsh, Ohio State University Wexner Medical Center

Anthony Dennis, BioOhio

Matthew Weekley, Plante & Moran PLLC

Jeff Biehl, Access Health Columbus

Peter Pavarini, Squire Sanders LLP

Chad Pinnell, Equity Inc.

Aaron Wandtke, Executive Staffing Solutions

Kenneth Weixel, Deloitte & Touche LLP

Greg Moody, Governor’s Office of Health Transformation

Cathy Levine, UHCAN Ohio

Karen Morrison, OhioHealth Foundation

Dr. Teresa Long, City of Columbus

Bob Gesing, Trinity Health Group

Kevin Conrad, Rogers Benefit Group

Jeff Klingler, Central Ohio Hospital Council

Larry Harris, Willow Brook Christian Communities

Paul Heiserman, Equity Inc.

The Ohio Orthopedic Center of Excellence and The Cardinal Orthopedic Institute announce merger

In keeping with a trend we've seen recently, (The Zangmeister Center and Columbus Oncology / Hematology Associates merger, article below) these two major orthopedic groups have announced a merger, creating a Columbus orthopedic "Super Group"  This new organization will house more than 50 orthopedic surgeons and specialists at more than 11 locations distributed throughout the central Ohio area and surrounding regions.... Seems like a recurring theme is the strength in numbers!

http://www.prweb.com/releases/2012/OrthopedicMerger/prweb10126490.htm


http://www.bizjournals.com/columbus/print-edition/2012/12/07/independent-orthopaedic-practices.html?page=all

American Health Network named Central Ohio's first ACO

It's been an interesting ride, and I was wondering who would be the first in the market. No doubt, there will be a lot more change to come....Business first article here:

http://www.bizjournals.com/columbus/blog/2013/01/columbus-gets-its-first-obamacare.html

OhioHealth Corp. has hired Rick Dunning from the University of Maryland Medical System in Baltimore as its senior vice president of real estate and construction, where he oversaw planning and facilities growth for the 13 hospital system.

Business First Article Here:
http://www.bizjournals.com/columbus/blog/2013/01/ohiohealth-fills-vacant-real-estate.html

Taking advantage of the still hot medical building sales market, Mount Carmel sells 2 medical office buildings

It's been no secret that the demand for medical office buildings is at an all time high, due to a few basic factors:

• Interest rates are low, and investors are seeking higher returns
• Demographics and healthcare reform point to an increasing need for facilities
• Investors see this and want to take part in the action

Many investors have had more capital to place than product to purchase. Recently, Mount Carmel sold interest in 750 Mount Carmel Mall and 444 Cleveland Avenue to Health Care REIT for $14.5 Million.

Business First Article located here:
http://www.bizjournals.com/columbus/news/2013/01/02/mount-carmel-profits-from-real-estate.html 

Q2 2012 Medical Office Trends - Real Estate Update

Columbus Medical Sales Pick Up The Pace

Medical users are buying buildings for very low prices, owners of full medical buildings selling buildings at near all time high prices.

This has been the story for medical real estate for a while, what’s new is that activity is substantially picking up on both of these fronts.

Great opportunistic purchases sell for a fraction of their replacement costs

• New building for the New CMA: The Columbus Medical Association just purchased 1390 Dublin Road for $2,300,000 or $67 per SF for 34,283 SF.  Read Business First article here.
• Extra Space for Practice: A large medical user just purchased a 12,623 building in Dublin for $690,000 or $54 per SF. The Seller was highly motivated, having reduced the asking price from $1,700,000 to $699,000.

Occupied building sales continue to yield prices near record highs

• 495 East Main Street, occupied by Nationwide Children’s Close To Home, just sold for $3,950,000 or $234 per square foot.
• 3592 Corporate Drive, a building with Nationwide Children’s just sold for $134.55 per SF, with 2/3 of the building vacant (NCH is occupying 10,000 of the 30,000 SF).

How long will these trends last?

I think that the opportunity to purchase distressed buildings at these low prices, while still available, is winding down.  There are a limited number of highly distressed properties, and while I can point to many examples, I am also seeing many selling or about to sell.  For owners looking to sell full buildings at super high pricing, I think the window will last a bit longer. This trend is driven by interest rates and overall demand for healthcare properties among investors.

What do I recommend?

If you have a need for additional space, either for clinical or administrative functions, now is the time to look at what is distressed in the market, even if your timing is a bit out. I would not recommend waiting to see what’s available in 2 or 3 years because I doubt that there will be as many inexpensive options then.

If you think you could get more use of your capital by deploying into your practice (adding providers, upgrading equipment or infrastructure, opening a new location, etc…) then it is worth analyzing the sale of your real estate and staying in the property as a tenant. This includes developing an opinion of value, examining accounting advantages and disadvantages, and considering your practice goals. If you own your building and have no succession plan for your practice, highly recommend selling your building and remaining as a tenant for 10 years. Owning a vacant building once retired is painful and can be averted with good planning.

Thanks for reading the latest on Columbus medical office space!

Davita Buys HealthCare Partners physician network- 4.4 Billion

Our ever changing environment is changing more... First with an insurance company ramping up their acquisition of practices and systems, now with Davita acquiring one of the largest physician networks in the US, with $2.4 Billion in annual revenue. Thanks to Florida attorney Jonathan Fleece for posting on LinkedIn.

Click here to view the article

Q1 2012 Medical Real Estate Trends

The Zangmeister Center and Columbus Oncology and Hematology Associates Announce Merger Centers Join Forces to Maintain High Standard of Community Cancer Care

Big news and congratulations to both groups!

Press release below and additional article available from Carrie Ghose on Business First’s blog at: http://www.bizjournals.com/columbus/blog/2012/05/cancer-specialists-zangmeister.html?ana=e_du_pub&s=article_du&ed=2012-05-01

The Zangmeister Center and Columbus Oncology and Hematology Associates Announce Merger

Centers Join Forces to Maintain High Standard of Community Cancer Care

April 30, 2012 - (Columbus, Ohio) – In a concerted move to maintain the high standard of community oncology in central Ohio, two leading cancer care providers, Columbus Oncology and Hematology Associates and The Mark H. Zangmeister Cancer Center, have reached an agreement to merge their organizations.

The merger will create a unified entity of 21 physician members. Both centers will maintain their current locations, physicians and staff.

As healthcare costs continue to rise nationwide, the two Columbus organizations say joining forces will better position them to compete in a challenging health care environment. The merger will enable them to deliver more coordinated care while maintaining reasonable costs for patients, insurers and employers alike.

The union will allow the organizations to maintain independent offices and continue to work closely with central Ohio hospitals and other groups to offer high quality care and treatment.

“By unifying community cancer care in Columbus, we will benefit our patients by providing a greater breadth and depth of services and expertise,” said Dr. Patrick Elwood, president of the Zangmeister Center. “Both of our organizations are committed to providing the highest standard of service to our patients and this merger will assure that care continues.”

Dr. Peter Kourlas, president of Columbus Oncology and Hematology Associates agrees. “Our organizations were founded with the same mission: to offer a level of attention and patient care that is unique to the community oncology setting. By combining our strengths, it’s a win for our patients, our own practices and cancer care in central Ohio.”  

Guidance for acquiring medical real estate from hospitals

Demand is higher than ever, but what are the key considerations for those who are interested in purchasing these buildings?

I ran across the article below and thought it provided a solid overview of most of the issues involved, hope you find it helpful!

http://www.munsch.com/files/acquiring_medical_real_estate.pdf

Support Everyone Gives

New space sells for record low price ($33 per SF), located near Dublin Methodist hospital

A 16,000 square foot condominium suite located across from the hospital just sold for $33 per square foot.

The property was built by a private developer with asking prices $150+ per square foot, but the lack of sales forced a situation where the lender had to take the property back.

After the lender marketed for about a year, they set a deadline to close by the end of year.

With the end of the year nearing and no contracts in place, they decided to ask for best offers and accept the highest.

This price point tells us what a speculative investor is willing to pay for a space.

Unlike investment sales (where tenants are in place) or user sales (where the buyer is going to use some / all of the building) this speculative purchase scenario is not something we’ve had much data on.

This low price is indicative of the investor’s risk. He will need to find tenants (which could take an unknown period of time) and will need to contribute to the build out costs (not a totally known cost).

The carrying costs such as taxes and insurance will reduce his return, so he is highly incentivized to lease or sell the space quickly.

Despite these risks, this is likely a tremendous opportunity for the investor.

He can set his asking rents and prices substantially lower than the rest of the nearby market and still make a decent profit.

For the investor, as well as whomever buys or leases from him down the road, this should be a win-win.

Take a tour of The Zangmeister Center

Q3 2011 Medical Office Trends

Presenting Medical Office Trends via video

Veteran Salute, and my old ship is hosting Michigan State - UNC Basketball!

I wanted to take a minute to salute and thank our veterans. My heart especially goes out to those who have served over the last ten years.

Although I am a veteran, the sacrifice I made don’t compare what most of them had to do.

I can’t help but to feel a twinge of pride knowing that I’ll be able to see my ship tonight as the USS Carl Vinson hosts the Michigan State – UNC basketball game.

I lived on board for 4 years… I know the crew will love the event.

It’s a well-deserved break, and kudos to those who came up with the idea and executed it.

If you happen to have a minute tonight, it could be worth a look… it’s certainly something you don’t see every day.

Link:
http://www.freep.com/article/20111111/SPORTS07/111110425