Technology will not completely replace brick-and-mortar facilities, but it certainly has decreased the amount of traffic into and capital spent on these assets.
Banks, airlines, travel agents and the music industry all poured funds into technology infrastructure to meet changing consumer demand and keep pace with the competition.
Health care services are the next frontier in the physical space versus cyberspace equation as telehealth grows to challenge the field's traditional real estate assumptions.
For the past decade, the conversation about telehealth mostly focused on integrating the technology into hospital-centric inpatient department services. Meanwhile, ambulatory telehealth technologies are rapidly developing and now have the potential to greatly disrupt how outpatient services are delivered.
Psychiatry consults, speech pathology, chronic condition management and nonurgent primary care are a few examples of visits that can easily be addressed through a telehealth visit with access to the right technology and with the right funding.
According to the Health Resources & Services Administration (HRSA), telehealth is defined as “the use of electronic information and telecommunications technologies to support long-distance clinical health care, patient and professional health-related education, public health and health administration.” This is not the exclusive domain of inpatient and emergency consults.
While health care administrators and entrepreneurs have demonstrated that virtual visits can handle a wide range of outpatient visits, the field has not seen wide-scale adoption. This is because reimbursement for all types of telehealth visits has not been applied consistently and it frequently falls on the consumer to pay for services as an out-of-pocket expense.
Once there is greater and more consistent reimbursement for outpatient telehealth visits, the incentive to use these services will rise and consumers will venture into this territory with fervor. As more patients see their care providers virtually, the need for bricks-and-mortar outpatient health care space will not go away but will decrease.
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Provider clinics have a fixed number of exam rooms that correlate with the number of patients that can be seen in a day. Hence, the growing wait times for appointments. If a portion of these visits were handled through telehealth, the office would have capacity to manage more patients without additional physical space.
However, when considering the idea of promoting more telehealth visits, it is important for facilities professionals to assess patients’ socioeconomic barriers.
If the desire is for more telehealth home visits, patients will need to have access to a computer, tablet or smartphone and a reliable internet connection. For patients with limited incomes, these types of telehealth visits may be out of reach. Thus, telehealth visits will still need to occur at their nearest primary care clinic to have access to specialists who are out of reach due to long driving distances.
It is likely that telehealth outpatient visits will never completely replace in-person visits with a primary physician. However, they can decrease the need to travel for certain types of appointments.
As attractive as it seems, there has not been wide-scale adoption of outpatient telehealth visits. According to the global risk management company Willis Towers Watson, telemedicine visits only totaled about 1 million out of the 1.2 billion outpatient medical visits last year.
For some, cost is a barrier. Routine primary care telehealth visits can cost more than an average visit to the doctor for some employee health plans. For example, some telehealth visits can cost employees up to $50 while the copay at the clinic is only $25 or less. Some patients would still rather give up time than pay more for convenience.
For other patients, changing their perception of a traditional doctor’s visit must be adjusted as well. If patients are accustomed to seeing their providers in person and none of their peers have tried virtual visits, then their habits are unlikely to change. Telehealth visits must be perceived as a convenient option that adds value as opposed to merely a solution for people with limited health care access. For the health care industry to begin reducing brick-and-mortar facilities, telehealth visits will need to become more prevalent.
Emergency departments (EDs) are another area within the health care field that could be affected by telehealth. One startup company called EmOpti Inc., Brookfield, Wis., is rolling out telehealth technology in select hospitals across the country. The purpose is to use telehealth visits to quickly treat low-acuity patients who present in the ED. The process begins with the patient encounter and with the ED triage nurse who records the patient’s vitals.
Then, the patient consults with a physician via tablet to determine which treatments or additional tests are required. The EmOpti group has ED physicians on call in remote locations and can field virtual visits from multiple EDs during the same shift — an efficient use of time for both the patient and physician. The physician does not have to move from room to room to see patients and the patient does not have to wait for the doctor to come into the treatment area.
For a standard ED visit, patients can spend a significant amount of time waiting to be seen. The average ED visit is about 2.75 hours and the wait can be even longer for low-acuity patients who present in EDs without a fast-track unit. If low-acuity visits can bypass the need to be seen in an exam room, then ED capacity and caregiver resources could be impacted by as much as 20 to 40 percent, depending on the acuity mix or a provider’s department.
ED visits have been on the rise around the country and, as a result, hospital administrators are closely monitoring how efficiently their ED facilities are utilized. Many providers seeking to develop facility master plans are faced with increased ED visits and a limited amount of departmental space.
Space can be renovated to increase throughput, such as adding a waiting area for test results or reconfiguring treatment zones. However, the maximum capacity for one ED treatment room is about 2,000 visits per year.
If a hospital’s projected annual visits start to max out its available treatment spaces, the administrator is faced with renovating existing space for an average cost per square foot of $350 to $600 or building new space for an average cost of $600 to $800 per square foot. But the situation changes if the hospital administrator can implement new telehealth technologies to increase the capacity of the ED.
If a patient is seen virtually by a physician immediately upon arrival, the average time spent in the ED should decrease. Thus, more visits can be accommodated in the existing space with the same number of ED treatment rooms. While incorporating licensed telehealth technology carries a cost, it can be offset by the savings realized in eliminating large capital facility projects, stabilizing staffing and reducing operating expenses.
Telehealth visits in the ED face fewer regulatory hurdles because many EDs already have implemented telehealth processes for their stroke protocols. For small community hospitals, it is not cost efficient to have a neurologist staffed in the ED at all times to evaluate patients potentially undergoing a stroke to determine if administering tissue plasminogen activator (TPA) is necessary.
For a solution to this staffing problem, hospitals have turned to virtual, on-call, stroke specialists who can be called immediately to visually and telemetrically assess the stroke patient. The decision as to whether to administer TPA then can be taken care of quickly.
Telehealth visits increase access, add convenience and decrease the need for physical space to treat patients.
However, reimbursement mechanisms lag behind the technology, resulting in health providers and patients who are not using telehealth to its fullest potential. As a result, the impact on health care real estate has been minimal.
Until telehealth is widely adopted as an alternative to current health care real estate practices, health care organizations will need to continue to invest in physical space upgrades rather than divert resources to the infrastructure backbone required for this pioneering technology.
Given this uncertainty, the introduction of additional telehealth technologies requires the need for flexible real estate strategies to adjust under certain conditions and scenarios.
Erin Nelson is an associate consultant and Curtis Skolnick is managing director at CBRE Healthcare's Richmond, Va., office. They can be reached at Erin.Nelson2@cbre.com and Curtis.Skolnick@cbre.com, respectively.