The Outlook for Investment in Health Care Properties: Medical Office Buildings and Outpatient Facilities 2 (Jonathan Winer) - ULI fall meeting - 102811
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The Outlook for Investment in Health Care Properties: Medical Office Buildings and Outpatient Facilities 2 (Jonathan Winer) - ULI fall meeting - 102811
- 1. 2011 ULI Fall Meeting The Outlook for Investment in Healthcare Properties: Medical Office Buildings and Outpatient Facilities October 28, 2011
- 2. The following information is taken from The Outlook For Healthcare by Economist Gary Shilling Sponsored by Seavest Inc. and ULI The full report can be obtained at SeavestHCP.com 1
- 3. U.S. Elderly Population as a Share of Total Population 12% 10% 8% 6% 4% 2% 1970 1980 1990 2000 2010 2020 2030 2040 2050 65 to 74 Years Old Over 75 Years Old Source: U.S. Census Bureau 2
- 4. Annual Rate of Physician Office Visits by Age Group, 1998 versus 2008 6.9 Over 65 6.1 3.7 45-64 3.6 2.3 Under 45 2.4 0 1 2 3 4 5 6 7 8 2008 1998 Source: U.S. Centers for Disease Control and Prevention. 3
- 5. Social Security, Medicare, and Medicaid as a Percentage of GDP 25% 20% 15% 10% 5% 0% 1970 1990 2010 2030 2050 2070 Social Security Medicare Medicaid Source: Congressional Budget Office and Social Security Administration 4
- 6. Hip and Knee Replacements in Nonfederal Short- Stay Hospitals: Adults 45 Years and Older MRI / CT / PET Scans 50 35 30 40 25 30 20 20 15 10 10 5 0 0 1996 1998 2000 2002 2004 2006 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Total Hip Partial Hip Total Knee Under 65 years in Physician's Office and Outpatient Departments Over 65 years in Physician's Office and Outpatient Departments Under 65 years in Emergency Departments Over 65 years in Emergency Depepartments Source: U.S. Centers for Disease Control and Prevention 5
- 7. Insured Nonelderly Population with and without Health Care Bill 260 255 250 245 240 235 230 225 220 215 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Without Healthcare Bill With Healthcare Bill Source: Congressional Budget Office 6
- 8. Average Length of Stay 7.5 7.2 7.2 7.1 7.0 6.7 6.5 6.2 6.0 6.0 5.8 5.7 5.6 5.6 5.5 5.5 5.0 1988 1991 1994 1997 2000 2003 2006 Average Length of Stay Inpatient and Outpatient Surgeries at U.S. Community Hospitals 20 19 18 17 16 15 14 13 12 11 10 9 1988 1993 1998 2003 2008 Outpatient Surgeries Inpatient Surgeries Source: Avalere Health / American Hospital Association. 7
- 9. Share of Medical Practices Owned by Physicians and Hospitals 80% 75% 70% 65% 60% 55% 50% 45% 40% 35% 30% 25% 20% 2002 2003 2004 2005 2006 2007 2008 2009 Physician Owned Hospital Owned Source: Medical Group Management Association. 8
- 10. About Seavest Inc. Seavest Inc. is a real estate investment management firm dedicated to investing in medical office buildings and related healthcare properties. Established in 1981, Seavest partners with qualified medical office developers and operators, acquires properties directly and provides asset management services for millions of square feet of medical office buildings throughout the United States. Seavest operates through long-term, discretionary investment funds. This investment vehicle is structured to attract health systems and the developers serving these organizations while providing superior returns to investors. The fund structure, along with our established industry relationships, allows Seavest to access a full range of opportunities to invest in medical office buildings and other outpatient projects. With an extensive history of medical office investing, Seavest offers market expertise grounded by the principles of stability, loyalty, openness and mutual success. To contact Seavest: Jonathan L. Winer Executive Vice President Seavest Inc. 914.683.8474 jwiner@seavestinc.com To obtain a copy of The Outlook for Healthcare by Gary Shilling please visit SeavestHCP.com 9
- 11. 10
Editor's Notes
- SeavestHCP.com
- Over 65 represented 24% of all office visits in 1998 versus 27% in 2008 and the number of visits increased from 6.1 to 6.9Why; better technology, broader ‘lifestyle” solutions, better access?In 2004, the average spend for someone over 65 was $14,797 (the governments pays for about half) vs. $4,511 for the 19 to 65 age group
- Even before HC reform cost were projected to explode from 10% to 25% by late in the centuryThe real culprit -- Medicare
- Advances in the technology of medicine also play a significant role in increasing costs.Look at the growth in procedures and diagnostics over a 10 year period. For instance a 50% increase in knee replacements from 96 to 06 and 200% increase in advanced imaging.As technology has improved many of these procedures are done on an outpatient basis or that is where the rehab occurs.
- Because most of the elderly are covered by Medicare, the 32 million increase in insured is younger and often poorer with much of the burden projected to fall on Medicaid.Starting in 2014 and fully implemented by 2019.
- Here is the story line; hospital beds are shrinking and inpatient stays are shortening.Meanwhile, the outpatient procedures are growing rapidly.Hospitals are pushing series out in to the community to be closer to the patient base and more generally in to outpatient facilities to unpack their campus.MOB space can be built for half the cost of a hospital.
- Here is another important trend to take note of – from 25% to over 55% in just 7 short years.This represents a sea change in the traditional physician/hospital relationship.The result for outpatient real estate; PRO - better credit, CON the business starts to look more like a traditional net lease business
- Again, please get a copy of the complete paper at SeavestHCP.com