Page 14
— Health Care Properties Quarterly — June 2016
Management
A
new health system execu-
tive is informed that three
of the system’s medical
office buildings are sched-
uled to be inspected by
the State Board of Health and the
Healthcare Facilities Accreditation
Program. Should he be concerned?
Not if the facilities are operated by
expert third-party property manag-
ers, who specialize in health care
and have a thor-
ough understand-
ing of the accredi-
tation bodies’
regulations and
standards.
But a skilled
third-party health
care property
manager will go
beyond that. He
will ensure that
the maintenance
and other staff at
each facility are
trained to properly
maintain the building so that it’s
compliant with all standards. He
also should be trained to deal with
inspections so he understands what
the inspectors will be looking for,
to answer the inspectors’ questions
and readily provide all requested
records and documentation. Finally,
good property managers know the
accreditation bodies often have
their own interpretation of the
standards. The key, therefore, is to
select a third-party property man-
ager who has dealt with hundreds
of inspections and knows what to
anticipate. This is probably the most
critical area for hospitals and health
systems, so it’s essential that they
choose wisely.
While superior property manage-
ment of medical facilities always
has been important, it’s become
even more vital during the past few
years because of the increase in
financial, compliance and health
care laws and regulations such as
the Sarbanes-Oxley Act of 2002, the
Patient Protection and Affordable
Care Act of 2010 and the Healthcare
Education and Reconciliation Act of
2010. Noncompliance of some laws,
such as the Physician Self-Referral
Law, can have serious financial
repercussion for providers. In addi-
tion, there’s been an increase in
environmental laws and regulations
that cover a wide variety of issues,
such as water and air quality,
energy efficiency and environmen-
tally friendly building materials. It’s
essential that property managers
stay up to date on all of these issues
for the sake of both the owners and
the tenants.
One of the greatest benefits of
using a third-party property man-
agement firm is that clients can
share in the broader experience
of that firm and its personnel. A
company that manages hundreds
of thousands or even millions of
square feet of health care facili-
ties can identify best practices and
leverage them for individual clients.
Third-party property managers
also can serve as good stewards
of the health system’s assets and
finances. They can enhance the
value of properties through regu-
lar and preventative maintenance,
which will minimize the owners’
capital investment. Health systems
often have a stable of excellent, low-
er-cost vendors for janitorial servic-
es, paper products and other goods,
and services, so a property manager
should consider collaborating with
the provider and use some of those
vendors, thus leveraging the sys-
tem’s purchasing power.
Property managers also can
reduce operating expenses, which
will save costs for the owners and
keep tenant lease rates stable,
which translates into more satis-
fied customers. One important
example of reducing expenses is
real estate taxes. If the owner of a
medical building is assessed a high-
er tax rate, the property manager
and his health care tax consultant
can appeal the rate or, if neces-
sary, obtain legal counsel. A prop-
erty manager should, therefore, do
everything necessary to make sure
the owner of the medical building
doesn’t pay more real estate taxes
than other comparable MOBs in the
area.
Superior property managers also
should ensure that patient, staff
and visitor safety is paramount and
proactively implement plans in con-
cert with the health system’s plans
that will mitigate the system’s risks
in the building. For example, the
property manager should develop
emergency response plans for tor-
nadoes, floods, earthquakes and
other disasters. Plans for serious
influenza and disease outbreaks,
such as for the Ebola virus, also are
essential. In addition, by regularly
performing preventative mainte-
nance and safety inspections, the
management team will reduce the
number of hazards and equipment
malfunctions that often lead to
costly insurance claims.
Another vital area for health care
property managers is to ensure that
the tenants and building owners
enjoy the highest levels of customer
satisfaction. The medical building
is branded with the hospital’s or
health system’s name, so the prop-
erty manager needs to obtain the
system’s buy-in as to how he will
manage the facility. Then the prop-
erty manager needs to regularly col-
laborate and communicate with the
health system to ensure that the
management team provides consis-
tent agreed-upon services. To keep
tenants satisfied, the property man-
ager also should communicate regu-
larly with them, address their space
and other needs, and work with the
building owner to keep lease rates
stable and competitive. It’s much
less expensive to keep a satisfied
tenant in place than to search for a
new tenant and build a space to suit
its specific needs.
Health care providers that are
looking for a third-party property
manager should consider a num-
ber of important characteristics. As
mentioned before, the prospective
manager should understand and
keep up with all applicable finan-
cial, compliance, health care, and
environmental laws and regula-
tions. They should understand the
importance of maintaining strong
relationships with the health sys-
tem and the physician tenants.
They should have experience man-
aging the upkeep and finances of
health care properties, as well as
experience working with provid-
ers to develop emergency disaster
plans. Finally, they should have
broad experience and a comprehen-
sive understanding of the health
care industry and the inspection
process. All of this will ensure that
the health system and its medical
facilities will be successful now and
well into the future.
s
Ryan Rothacker
Vice president
of health care
operations, Duke
Realty, Dallas
The St. Vincent Women’s Center in Carmel, Indiana, is managed by Duke Realty.
The TriHealth/Group Health facility in West Chester, Ohio, also is managed by Duke Realty.
