On March 12, we hosted a webinar titled Hospital Campus Development: Current Deals, Trends and Insights Learned Along the Way. To watch a video replay of the webinar and to get copies of our slides, click here.

Here are our top five takeaways from the webinar:

  1. Paging Dr. Strategy: Your Real Estate Is Calling – Hospital executives have made real estate strategy a priority over the past twelve months. We’ve seen an uptick in hospitals taking down land, and in several instances, a lot of land, to “plant a flag” in growth markets. Other driving forces include changes in certificate of need (CON) laws, which have created new opportunities for hospital providers to expand. Speaking of CON reform, we’ve seen this play out in a couple of ways. Most of the time, a total repeal of CON laws hasn’t been successful. On the other hand, more limited changes to relax CON standards for rural communities, behavioral health services and ambulatory surgery centers (ASCs) have been successful. Several states are considering a phased approach to CON reform over a number of years.
  2. Show Me the Money! – Changes in reimbursement policy continue to impact how new hospital campuses are being developed. Just this year, new policy changes have made it more difficult to operate hospital outpatient departments. These changes, and others, will force hospital systems to continue to focus on getting higher acuity patients to inpatient facilities on their campus or consider establishing more neighborhood hospitals that include a combination of urgent care and inpatient hospital services.
  3. When to Swipe Right on Joint Ventures (JVs) – Joint venture transactions continue to be a priority for hospital systems. Based on a survey of hospital executives, hospital systems are prioritizing JVs for new ASCs, behavioral hospitals, inpatient rehabilitation facilities, combined urgent care and free-standing emergency departments and oncology centers. Picking the right partner is important, in addition to mission alignment.
  4. Hospital Beds, Happy Hour, Housing and Hotels – Hospital campuses are becoming mixed-use projects with the hospital being the anchor tenant. Hospital executives want to create a “destination” for patients, their families and employees. A number of hospital campuses are considering workforce housing, extended-stay hotels for patients and their families, senior housing, restaurants and retail. This creates an environment that is comfortable and convenient for patients and employees.
  5. Taxes, TIFs and Talking to City Hall – Getting economic incentives for a new non-profit or governmental hospital project can be challenging. Local officials often want new hospitals, but recognize that the hospital may be exempt from property taxes. Some communities are asking hospital operators to enter into PILOT (payment in lieu of taxes) agreements as a condition to getting their projects approved. Creating a strategy for working with local officials on new projects is key.

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Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot—outside of an attorney-client relationship—answer specific questions that would be legal advice.

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