Like other sectors of commercial real estate, the medical sector has struggled under the weight of COVID-19. They have taken devastating blows to their bottom lines due to social distancing guidelines and the inability to perform elective procedures. Even now, patients remain hesitant to return for standard or preventive treatments, and the financial health of the medical industry is suffering.
But health systems are familiar with nursing things back to health. Medical personnel around the country are creating new opportunities for care, providing patients with calls to action, and restructuring to keep their facilities alive. Hospitals are making changes in the wake of COVID-19.
Furloughs, Fill-In Physicians, and Medical Facility Leases
Due to the significant drop in income, many health systems furloughed physicians and other staff members. Recruitment firm Merritt-Hawkins recently surveyed 842 physicians. Of those, 21% said they experienced furloughs or pay cuts. As a result, some furloughed physicians were replaced with fill-ins.
When medical practices change hands, the leases change hands as well. If a health system or landlord owns the facility where a physician is practicing, lease negotiations can be a lengthy process. So as physicians change, the medical real estate advisors have to re-initiate the process, causing a delay in negotiations. This simple change in staffing affects the timeline for a health system to finalize their leases.
The Increase in the Use of Telehealth
As states and individual communities underwent lockdowns, medical practices had to halt elective procedures. Within a matter of a few days, medical practices shifted gears and focused their attention on telehealth solutions. According to one source, some areas in the country have seen an increase of over 40 times the former amount of virtual doctors’ visits. Seema Verma, the administrator for Centers of Medicare and Medicaid Services, recently explained that telehealth appointments have increased from 12,000 per week (in March) to one million per week. Even as elective procedures and regular visits become more normalized again, telemedicine will likely remain a significant part of the future of healthcare.
Interior Adjustments
The recent COVID-19 outbreak has revealed a few, specific weaknesses in the structure of a hospital. Some hospitals had to transform units into quarantine sections and convert their HVAC units to the correct standards for handling a highly contagious illness. Virus-related adjustments highlighted the need to invest in facility upgrades and future contingency plans. These changes will help medical personnel better plan for future widespread medical emergencies.
Unique Impacts of COVID-19
The health system has long focused on social determinants of health, such as safe housing. Henry Ford Health System specifically addressed these issues. Susan Hawkins, SVP of Population Health for Henry Ford Health System, explained that the need for safe housing and food increased in their market area. Perhaps this realization will deepen the connection between health systems and housing properties.
Henry Ford Health is also doing something to fill the gap in healthcare access. They are using a mobile health unit—a bus that hosts two patient rooms, a waiting area, and even medical refrigerators to transport biosamples. It’s one of the strategies they are implementing to help care for patients at home while freeing up hospital space in the case of another future pandemic.
While some of these new measures started as a temporary solution in the face of a pandemic, they may remain intact for the foreseeable future. COVID-19 is still in play, and hospitals are still fighting the virus’s impact on the financial health of their companies. As the future unfolds, hospitals and health systems will continue to make changes that best fit their practices and benefit their businesses long-term.
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