Weekly Health Care Real Estate Briefing: California Allocates $19B to Health Care Programs I Best Places to Open an ASC I Housing is Health Care

California officials have come to an agreement on how to allocate $19B in tax revenue and federal funding. A large portion of the funds will go to increasing Medi-Cal reimbursement rates, help struggling hospitals, and ease health care workforce shortages.
A new article takes a deep dive into health care utilization trends. Outpatient surgery providers are reporting a surge in patient volume as they benefit from more procedures being performed on an outpatient basis. On the other hand, hospital providers are seeing volumes level off with inpatient volumes at or slightly below pre-pandemic levels.
Hospital emergency departments (EDs) across the country are being inundated with patients requiring mental health care services. One in eight adult patients, and one in five pediatric patients, presenting in an ED require mental health services, although 55% and 84%, respectively, of those populations will be discharged without ever seeing a mental health professional.
CBRE released its Q1 2023 National Health Care Real Estate Investor Update. MOB sales volume is down 70% from the same time last year. This is the lowest first quarter sales volume in 9 years. Average cap rates increased to 7.1% in the first quarter which is a 70 bps increase over the average a year ago. On the bright side, MOB construction is up 25% over the same time period last year.
According to a new white paper, occupancy within life science buildings owned by a major REIT are down 50% to 60% from pre-pandemic levels. The report analyzed cellphone data to monitor attendance across 435 buildings.
Will retail store closures present opportunities for health care providers looking to grow their retail footprint? Over 2,000 retail store closures have been announced this year alone from major retailers like Bed Bath & Beyond, Foot Locker and Walmart. One Wall Street analyst is predicting that 50,000 stores will close over the next 5 years.
Boston Medical Center and the Commonwealth of Massachusetts have teamed up to redevelop a state psychiatric hospital into a supportive housing complex. The $500M+ project is set to include 200 units of permanent supportive housing, 205 units of family supportive housing and 120 emergency housing beds.
Denver Health announced plans to convert an office building into a supportive housing facility with 14 units for homeless patients that are discharged from the hospital. Last year, the health system treated 7,000 patients that were experiencing homelessness.
A new article ranks the best and worst states to open an ASC. The best states are Utah, Florida and Texas. The least favorable states are Alaska, Connecticut, and West Virginia.
Encompass Health recently announced the opening of a new rehab hospital in Maryland. Encompass has 158 hospitals in 37 states and Puerto Rico.