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Page 10B— COLORADO REAL ESTATE JOURNAL — March 4-March 17, 2015
I t’s not difficult to see
why Colorado is an
ideal destination for
health systems and health care
providers. Denver trails only
Houston and Austin, Texas,
nationally in population growth
since 2010. The city is No. 1 in
the United States for millennial
growth since 2007 and 22
percent of Denver falls into that
generation.
According to JLL research,
the Mile High City is expected
to outpace U.S. job growth
by 15 percent through 2020.
With a surging, well-educated
population and economy
anchored by oil and gas,
technology, aerospace and life
sciences, there is little reason to
think Colorado will not continue
to secure the attention of the
health care industry.
However, Colorado health
providers face the same obstacles
that the industry is fighting
nationally. The Affordable
Care Act – which celebrates its
five-year anniversary on March
23 – challenged the traditional
models of care and forced
systems to rethink how they
deliver care to patients and
populations.
“Colorado is no different than
the rest of the nation,” said
Connie O’Murray, vice president
for JLL, based in Denver, who
works nationally with Adventist
Health. “Health system decision
makers are taking a look at all
areas of potential cost reduction
to adjust to the new environment
for health care. There’s focus on
space utilization, consolidation
in space, cost savings through
lease administration and energy
management.
“It’s important to look at
the whole portfolio and make
strategic decisions that allow
those decision makers to focus
on what matters – patient care.”
Moody’s – in a 2014 report
– identified for the second-
consecutive year that nonprofit
hospital system expenses
continue to increase at a higher
rate than revenue. Real estate
assets typically account for nearly
40 percent of hospital and health
system assets, and occupancy
costs are regularly one of the top
expense categories.
By using real estate in strategic,
creative and cost-effective ways,
health systems can switch the
balance of power. JLL regularly
works with these types of
systems – providers like Kaiser
Permanente, Banner Health,
Kindred Health Care and the
University of Colorado – in an
effort to find areas to produce
measurable and recurring cost
savings.
The following are a few areas
that system leaders consider
when evaluating real estate
as a proactive cost reduction
resource.
Space utilization. Evaluating
space is a key piece of effectively
understanding a real estate
portfolio. There are many factors
that affect space, including
mergers, acquisitions and
consolidations, and owned assets
require a different evaluation
than those leased.
Health care organizations
must understand the full extent
of their portfolio to fully judge
cost-savings potential and
effectiveness.
Academic medical centers
and universities, in particular,
have been some of the hardest
hit when dealing with changes
in national reform, forcing
innovation and evaluation. There
have been examples of these
systems relocating information
technology or human resources
services to off-campus admini-
strative buildings. This sort of
consolidation keeps the revenue-
producing employees in use of
the most expensive space.
Once a comprehensive real
estate inventory and space
utilization assessment is made,
an organization can implement
the right strategies to impact the
bottom line, including decisions
on essential and nonessential
needs. Making these sorts of
qualifications can determine
opportunities to sell off or
monetize assets that are not core
to the system’s objectives.
Vendor management. Vendor
management is key to efficient
facility operation, and it’s difficult
because a system may have
thousands of outside contracts
including security, grounds, food,
laundry and environmental, as
well as medical and nonmedical
equipment and systems. Health
systems that leverage their size
and scale can secure better
pricing and contract terms.
This process typically
means adopting a centralized
management approach or
employing an outside consultant
like a group purchasing
organization, which has already
harnessed the power of scale.
With an outside management
firm or group purchasing
organization, providers benefit
from existing preferred
relationships, advantageous
pricing and contract terms. An
additional benefit is gaining
the perspectives, insights and
systems these firms use to
manage and monitor metrics
and key performance indicators.
Energy and resource
management. Curbing electricity
and water use typically result
in instant savings for health
systems. While that’s an easy
consideration, it is just as
important to develop the
appropriate programs to curb
use to facilitate recurring
savings. Investment in
technology, equipment and
supplies ultimately will result
in tremendous dividends
in the form of eliminating
redundancies and enhancing
efficiencies.
Energy management programs
that focus on the supply side of
operations also can be helpful if
systems leverage their size and
scale to secure the best possible
pricing, enable incentives
available and use their position
to take advantage of creative
financing opportunities.
Organizational structure.
While examining organizational
structure may lead to staff
changes or reductions, it’s
very important to look at
this as another opportunity
for savings. This initiative
could offer staff training
opportunities, expansion of
employee responsibilities
and new career paths. Many
systems discover opportunities
for the use of technology and
improved practices to solidify
staff and create impactful quality
improvement and cost savings.
These opportunities reside
in many areas. The key for any
health system – in Colorado and
nationally – is to leave no stone
unturned.
Jason Clark
Managing director, healthcare solu-
tions practice, West Region,
JLL, Los Angeles
If your firm is active in the Health Care & MOB market and would like to appear in this directory, please contact Lori Golightly at 303-623-1148.
ACCOUNTANTS
Eide Bailly LLP
APPRAISAL
Cushman & Wakefield
ARCHITECTS
Boulder Associates
Davis Partnership Architects
H+L Architecture
Tenant Planning Services
ASSET MANAGEMENT/
ADVISORY
RMI Capital Management, LLC
ASSOCIATIONS
Colorado Association of Health Care
Engineers & Directors
Colorado Healthcare Financial
Management Association
BROKERAGE
BRC Real Estate
Cascade Commercial Group
CB Richard Ellis
Friedlander Commercial Real Estate, LLC
Health Connect Properties
InSite Properties, Inc.
NAI Highland LLC
Newmark Grubb Knight Frank
CONSTRUCTION
Adolfson & Peterson
Alliance Construction Solutions Colorado
Beck Group
Bryan Construction Inc.
BVB General Contractors
Calcon Constructors
Drahota
Facilities Contracting, Inc.
Fransen Pittman General Contractors
G.E. Johnson Construction Company
Jordy Construction
Kiewit
Mortenson
RJM Construction, LLC
Saunders Construction Company
SHAW Construction
Swinerton Builders
DEVELOPERS
Cogdell Spencer ERDMAN
Corporex Colorado, LLC
Development Solutions Group, LLC
Fleisher Smyth Brokaw
Healthcare Realty Trust, Inc.
McWhinney
NexCore Group
Trammell Crow Company
ENGINEERING
BCER Engineering
Beaudin Ganze Consulting Engineers, Inc.
Bridgers & Paxton Consulting Engineers
Group14 Engineering, Inc.
MKK Consulting Engineers
Shaffer Baucom Engineering & Consulting
FINANCE
CBRE Capital Markets
Colorado Business Bank
First Citizens Bank
INTERIOR DESIGN
Jean Sebben Associates, LLC
LAW
Gorrell Giles Gollata P.C.
Holland & Hart LLP
MECHANICAL CONTRACTORS
RK Mechanical, Inc.
PROJECT MANAGEMENT/
OWNER’S REPRESENTATION
Hammes Company
Project One Integrated Services
PROPERTY
MANAGEMENT
Fleisher Smyth Brokaw
Health Connect Properties
InSite Properties, Inc.
SIGNAGE
Schlosser Signs, Inc.
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