Massachusetts Tries to Rein In Its Health Cost

In the continuing saga of healthcare reform, it appears that one of the early adopters of a new mandated healthcare coverage model is rethinking and may reengineer their approach based on the unsustainable results that have stemmed from the program's launch in 2006. Read the full New York times article here:

http://www.nytimes.com/2011/10/18/us/massachusetts-tries-to-rein-in-its-health-care-cost.html?_r=1&ref=todayspaper

NY Times: Medical practices work to serve patients and the bottom line

Decent overview article from the NY Times that includes a snippet from a local dental practice and a variety of medical specialties throughout the country.... Link at
http://www.nytimes.com/2011/09/08/business/smallbusiness/medical-practices-keep-eye-on-the-business-side.html?_r=1

- Posted using BlogPress from my iPad

Medical Office Today's Spotlight on Columbus

I'm pleased to have provided the following article to Medical Office Today profiling the Columbus market:

Over $2 billion in healthcare-related projects are underway in Central Ohio, with most of the activity related to hospitals’ on-campus expansions and increasing their suburban presence. Hospitals and physicians alike are working to improve margins in what has been a challenging economy and healthcare environment...
(Click for Full Article at Medical Office Today)

The best study I've seen about healthcare changes their impact on medical office demand

"The Outlook for Healthcare" was published by Urban Land Institute and Seavest Inc... I've found it to provide the best one-stop source for understanding the dynamics of the market and the most likely expected outcomes as they relate to demand for new facilities.

I think they hit almost all of the nuances and they're able to do so in less than 40 pages. I'd make a comment about what it means when simplification is "just" 40 pages but it's probably better if I don't comment. Still, it's a fairly easy read and insightful.

The entire study can be downloaded here: The Outlook for Healthcare

The Cardinal Orthopedic Institute Buys Near Polaris

The Cardinal Orthopedic Institute has just purchased a 19,694 square foot shell building located near the intersection of Polaris Parkway and Cleveland Avenue. The building (560 N Cleveland Avenue) has been vacant since it's construction in 2007. Although the asking prices for this project were once north of $150 per square foot, Cardinal was able to purchase at the discounted rate of approximately $102 per square foot.

I assume this site will serve as a point of consolidation for the two Westerville practices they acquired in the first half of 2010, Westerville Orthopedics and Northeast Orthopedics.

I anticipate that sales at this discount rate and lower will continue as many commercial real estate owners still languish under the burden of vacant buildings. For hospitals and physicians who have a need for space, there are a number of opportunities to purchase vacant buildings at 50% or less of original pricing.

Good article on Mt Carmel's Grove City emergency care center

This has made headlines recently, both in the medical community and the commercial real estate community. The article below from This Week news does a good job of providing a "deeper dive" into some of the details.

Mount Carmel plans to build emergency care center

Grove City is preparing for the arrival of a 24-7 emergency room facility to be run by Mount Carmel Health System. Mount Carmel is in contract with Mid-America Racing Association Inc. to purchase 112 acres to develop its healthcare services at the site of the former Grovebrook Golf Club off state Route 665.
Full Story linked: This Week News re Mt Carmel emergency care center

Moving Dirt- A Litmus Test for the Medical Office Market

It's no mystery that the bulk of the health care related developments around Central Ohio are revolving around the hospital systems and their campus and suburban expansions. With over $2 billion in projects underway, there's no other way to categorize that segment than "booming"

It's more difficult to describe is the status of independent physician practices related to new space and new medical buildings. Despite some of the recent challenges and uncertainty in health care, some notable physician led projects are moving forward and others have been recently completed.

Hand and Microsurgery Associates has broken ground on their new building in immediate proximity of Polaris Mall. The 45,000 square foot building will incorporate a surgery center, space for Hand + Micro, and up to 15,000 square feet of additional space is available. The land at this premium location is expensive, and this is reflected in the rental rates- they're asking $18.45 per SF NNN.

OrthoNeuro has completed their 60,000 SF facility in New Albany, which also has a major ASC component in addition to housing space for OrthoNeuro. About 19,000 additional SF is available to lease at an asking rate of $17.95 NNN.

The rates for these buildings are an uptick from pricing for new medical office space a few years ago when rates for most new build spaces were hovering around the $16 NNN mark, although it's worth noting both of these are premium locations.

There is activity in these new buildings, and their ability to lease up will be an interesting indicator of the medical office market going forward, particularly as it relates to new buildings with speculative space available.

Work underway near Polaris Mall MOB