Healthcare Real Estate Insights, Part 4
Provider financial performance has surged to the forefront of importance in recent years as fee-for-service continues to evolve into value-based reimbursement, albeit faster in certain markets than others. Providers, faced with an increasingly competitive landscape, are laser-focused on the numbers, as they attempt to strengthen, or restructure, their balance sheets and profit margins, while not losing sight of their mission to maintain high-quality care for their patient populations.
As providers look at changing market dynamics — influenced by emerging technologies, consumer demand, and competition — any decision to replace or renovate aging or outdated facilities/infrastructure, or enter new markets through acquisition or consolidation, is being met with an eye toward proper scale, as well as scrutiny over required capital outlays and alternatives to traditional financing.
For providers, continued revenue erosion, with rising operating expenses, reduces the margin of error for investments that do not produce ROI.”
Managing Director, Navigant Healthcare Real Estate Group