According to research from Colliers International, telehealth grew by 1,202% between 2012 and 2017. But in 2020, the COVID-19 pandemic became the catalyst for extreme telemedicine growth. Practically overnight, healthcare professionals had to adapt to new technologies and onboard their patients via virtual platforms. According to GlobeSt.com, only about 11% of patients used telemedicine prior to the pandemic, but after the pandemic arrived, that number climbed to 46%. In some cases, telehealth appointments increased by more than 40 times the original amount.
Becker’s Hospital Review cites another report that says that in 2020, telehealth will increase by about 65%. And the Advisory Board suggests that in 2020 alone, there will be a total of about 1 billion telemedicine appointments with U.S. doctors. The data and current events both suggest that telemedicine has not only become a part of the current climate of healthcare but also a significant resource for the future.
Telehealth and Commercial Real Estate
With the sudden and extreme rise in telemedicine platforms, the broad assumption would be that traditional medical real estate will soon be a thing of the past. There are certainly several side effects of telehealth that will impact commercial, medical real estate—both now and in the future. But the effects of telemedicine may lead to filling medical real estate spaces rather than leaving them vacant.
The Disadvantages of Telehealth
In a recent article, GlobeSt.com explained that insurance reimbursement is one of the biggest issues pertaining to telemedicine. In fact, the article said that 77% of doctors agreed that insurance reimbursements could be a barrier for telehealth. But the lack of medical coverage isn’t the only potential disadvantage of telemedicine.
Many illnesses or injuries aren’t treatable through a digital appointment. Doctors often need to be able to take x-rays, samples, or bloodwork in order to diagnose and/or treat an issue. Additionally, some patients (specifically elderly or rural patients) will not be able to access online care due to technical challenges. While telehealth may steadily grow in popularity and usage, the need for physical medical space will continue.
Telehealth and the Patient Base
As we addressed in our 2020 Mid-Year Healthcare Real Estate Insights article, telehealth could lead to an increase in patients. Telehealth is a necessary resource for reaching patients who live far from medical centers. And, as mentioned above, many of those patients may eventually need to travel to a physical building to see their doctor for illnesses not treatable through a virtual platform.
The Medical Real Estate Footprint
While it’s too early to know all of the ways telehealth will change medical real estate, there is speculation that the physical medical space will need to shift and adapt. If telemedicine continues on its strong trajectory in the future, some medical groups may find that they can eventually downsize their physical footprint. For example, medical groups may be able to reduce the size of their waiting areas or decrease the number of patient rooms. But others may just need to restructure their current spaces.
Physicians who are visiting with patients both virtually and in person will need spaces for both types of appointments. In some cases, an individual office can create a private, quiet setting for a doctor to handle a telehealth appointment. Flex spaces, with basic desk and computer equipment, could also suffice for virtual appointments; physicians could share the space as needed.
Skilled Commercial, Medical Real Estate Advisors
As telehealth continues to impact CRE, medical professionals will need knowledgeable CRE advisors to help navigate leases and transactions. Collectively, HBRE’s team of commercial advisors has decades of experience with a variety of CRE deals. Their focus on the medical industry has given them a well-rounded perspective on the details that are specific to this sector. No matter how the increase in telehealth appointments is affecting a health system’s properties, HBRE can help provide the right CRE solutions.
If you are interested in learning more about investing in commercial real estate, or if you have questions about buying, selling, or leasing a commercial property, please contact an HBRE advisor. Our team of experienced CRE professionals have the skills and insight to assist with all property transactions. To reach out to us directly, email [email protected] or call 615-564-4133.
