Patient Preferences and Their Impact on Healthcare Facilities
Amber Schiada is the Head of Americas Work Dynamic Research at JLL, one of the largest real estate services firms in the world. In this episode she shares the results of their 2022 Patient Consumer Survey and other topics, including the most important consideration in choosing a health care facility, generational differences in healthcare choices, attitudes toward tele-health, differences by geographical region and if you reside in an urban, suburban or rural location, life science hot spots in the US and globally, and trends in the short and mid-term.
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Episode Transcript
This transcript was generated using an automated transcription service and is minimally edited. Please forgive the mistakes contained within it.
Patrick Kothe 00:31
Welcome! In medical device most of the time we're focused on the who, what, when, why and how of healthcare. But the wearer of healthcare is important to us as well. Changes to the were like the rapid movement of procedures to ambulatory surgery centers are ASCs has had a profound impact on the strategies of many of us medical device companies. The web is also important because it helps us understand the issues that our customers are dealing with, which can take us a level deeper in our relationships. The web is also important to us an industry because where we choose to locate our companies can be an important consideration for things like the ability to recruit top people finding the right people, optimizing supply chain, and keeping costs reasonable. Our guest today is Amber Schiada, the Head of America's Work Dynamic Research in one of the largest real estate services firms in the world, JLL. They recently issued the results of their 2022 patient consumer survey. We're gonna talk about the report in depth, as well as other topics including the most important consideration and choosing a health care facility. generational differences and health care choices, attitudes towards telehealth differences by geographical region and if you reside in an urban suburban or rural location, life science hotspots in the US and globally, and trends in the short and midterm, here's our conversation. Amber, thank you so much for joining us today.
Amber Schiada 02:24
Yeah, thanks for having me, Pat. I'm excited to talk about all things healthcare.
Patrick Kothe 02:28
Great. So JLL is a very large company, but it's not on the radar of a lot of people within the medical device field. So can you give us a brief overview of JLL?
Amber Schiada 02:41
Yeah, I love that. JLL is a global real estate services company. We're one of the largest global real estate services company, and we're 100,000 people strong. So it's huge company. And we're really playing in all areas of real estate, we advise our clients on their real estate portfolio strategies, whether that's regional, local or global, we offer leasing services. So we will lease out space for landlords of buildings, owners of buildings, we advise investors on investment strategies where they should be looking at acquisition opportunities. And a lot of that is all within the realm of helping whoever we're working with in our client base, to make better decisions about the real estate, their, you know, their real estate strategies. So anybody who plays in real estate could be a client of ours, essentially. And if you think about the built environment, it's all around us. It's not just offices and houses, but it's everything. And so we play in all areas of the real estate landscape across the globe.
Patrick Kothe 03:41
So let's talk about the different segments that you that you serve. And you know, we're gonna talk a lot about the healthcare segment too, but just just give me a rough flavor of your larger segments.
Amber Schiada 03:53
Yeah, we focus on a couple of key industries as it relates to our occupier clients. So we're very focused on healthcare companies, we've got a whole division that is just focused on the strategies that health systems are trying to implement and advising them on those strategies as it relates to their real estate and facilities. We also work with medical office, investors who are looking to acquire medical office buildings to add to their investment portfolio will provide debt financing for those investors as well. So it's a very niche sector that has some unique factor qualities to it, obviously. So we have a specialized team that focuses just on healthcare. We also have a similarly structured team that focuses just on life sciences. So it's also a very niche sector that's got a lot of unique attributes. So similar to the healthcare industry, we advise a lot of pharmaceutical companies on their real estate strategies for growth. And similarly, we manage and operate lab lab buildings and GMP buildings for either investors or for the clients that are in that space. Other sectors that we're really focused on right Now our data centers, huge growth area. Obviously, we're all living in this digital world. So you can imagine how much demand is out there for data centers these days. And it's growing. We also focus on public institutions, the government agencies that need to operate and manage their real estate portfolios. Similarly, with education clients. So we've got a couple of key verticals that that we're really focused on. And we continue to expand that. So every industry has its own unique challenges or opportunities. And so the service that we provide for these different industry groups is really unique to their own special situations, we want to make sure that we're speaking the same language and helping mitigate whatever challenges they have in the best way possible.
Patrick Kothe 05:41
So Amber, did the company start as a US company become global? Or is it an international company? How did how did it evolve?
Amber Schiada 05:47
Our Genesis is somewhere in the 1700s. In London, we are global now, our headquarters is in Chicago. But we have lots of coverage across EMBA, and across the APAC markets, as well as North America and South America. So you know, if you have a challenge or a need in any country, we can probably help solve it
Patrick Kothe 06:08
100,000 people within the company six, it's just a significant company, you're in a different group. So talk to me a little bit about your group and what you guys do.
Amber Schiada 06:18
One of the platform functions within the JLL organization is our research group. One of the things that is really important when it comes to understanding real estate, trends, markets dynamics, is really understanding what it is that drives supply and demand fundamentals. So a lot of the competitors in our world have a similar structure where they've got specialized researchers that sit in local markets, they know everything there is to know about the LA office market, or the Phoenix industrial market, or whatever their special focus is. And we have that sort of local on the ground coverage from the research group. From that level, from ground up, and then top down, we have a global research organization that is focused on somatic changes, you know, sort of thought leadership, big picture ideas, I sit within that group. So one of the main areas of focus for me as it relates to the research function is understanding what occupiers are challenged by understanding industry trends. So my focus is really focused on leading our industry research efforts and having content that our teams can use to better speak to their clients and prospects and, and really to educate internally and externally what's going on in those markets. So there's a lot of different ways that we achieve this research a lot of different ways that we tackle sort of, you know, answering those big questions, and it can be as tactical, as you know, pulling, what's the average rent for the office market in San Francisco, or it can be as complex as what sort of hybrid strategies our office tenants employing today that will change the landscape of the office market for the next 10 years. So those are very different questions, but our research team covers all of that.
Patrick Kothe 08:03
So you'll do secondary market research or primary market research or going out to out to consumers or whoever the customer is, and getting direct answers to direct questions. We do
Amber Schiada 08:14
produce market stats similar to an equity analyst would produce stats on the stock market and what's going on with public markets. So the stats that we produce in house can help our investors or occupier clients understand what they're dealing with in terms of price or demand or competition. But then the secondary, we do a lot of surveys as well. So we've done a lot of surveys to help better understand opportunities for our clients as it relates to, you know, workforce sentiment. So we are about to launch a workforce barometer survey that gets into the mind of 4000 office workers across the globe and what they need and what they're looking for from their employer that helps all of our corporate occupiers understand how they should strategize for their workplace. We also do for different industry segments, like the healthcare segment, we, we do an annual patient consumer survey. So to help our health system clients better understand what the needs of their patients are, their preferences in terms of facilities or location, things like that. And that is secondary research that we do surveying the market to better understand those needs, and then help advise our clients.
Patrick Kothe 09:21
Well, that was just published, you've got a 2022 patient consumer survey. And there's some really interesting things in there. And so I think that this will be an interesting discussion because number one, we're going to talk about, you know, the health care facilities and then you know, I want to go back to the life sciences sector and what's you know, what, what is important from a real estate standpoint and life science but let's start off with the healthcare side of things and dig into this patient consumer survey that you that you publish. So let's let's start off with why it's done and then What's the methodology for doing it,
Amber Schiada 10:02
we really want to better understand what drives patient choice, consumer choice. And I think that's what a lot of our healthcare clients are looking for as well. So we conduct this survey. Every year, we partner with a third party survey conducted like a professional survey provider, you know, what we're really trying to get at the heart of is, how do patients feel about the location of their facility? This year, we included some trends on telehealth because that has been a just game changer, especially during the pandemic. So we have some questions around that, we also really want to know how patients feel about the quality of their facility. You know, what could be better as we think about facilities management and managing real estate space for our for our clients, we want to have some trends that we can point to, to help advise on strategies as you know, our clients are building out space or planning new locations to expand into and whatnot so. So that's that's the sort of the over arching, why we do it, we just really want to better understand what patients are thinking, which then can help better inform our health system clients.
Patrick Kothe 11:11
And the reason why it's important for the audience that are there listening today is that those decisions that are going to be made, make the business so to speak, go to one location, it could go from a hospital to ambulatory surgery center, urgent cares, or you know, how have these patients are treated directly affects the medical device companies, and where they're going to be focusing their efforts and where they need to have their field Salesforce deployed, and how they want to market to those, those different constituencies. So let's talk about we'll get to the main themes, and then drill down into some of the really interesting data. So out of this out of this study, I think you've talked to 4000 people on this, all throughout the US, that's a lot of research that's being done there.
Amber Schiada 12:01
4000 people over a period of two weeks, so you know, really trying to get some real time feedback from patients as they're going into these visits or coming out of a clinic. And it's interesting, because, you know, in the report, we do slice down and some of the key findings by region or by suburban versus urban or by generation. So you'll see that it's not one size fits all, either. There's a lot of interesting insights that came out about different generational preferences on some of these questions or different geographic preferences based on on some of that. So finding the the wisdom and the data is always the challenge once you do one of these big surveys.
Patrick Kothe 12:39
And by the way, this, this report is going to be available to all of you, you'll see in the show notes, that there'll be a link to this report that you can download for free. So let's let's dig into kind of the the major themes. What What were the main themes that came out of this report?
Amber Schiada 13:00
Three big findings. First, location is very important. Patients very much favor convenience when deciding on a provider or deciding on where to go to get care. So it isn't just about the quality of the facility. But really, how convenient is it to get to the facility and how close is it to my home. So no surprises there. But I think the nuances that we can dig into in a little bit, you know, as it depends on geographic geography or demographics that that's where some of the differences start to show up. Number two telehealth, as we talked about earlier, is certainly a game changer. There has been a huge growth in demand for this. But it isn't necessarily the end of the in person clinic. In fact, it couldn't be it's just the way the healthcare operates. You have to be face to face with your provider at some point, but what we found is that it's opening up greater access for patient care, because something that you may not have gone into an in person visit for before, it's much easier to do an E visit or telehealth visit to kind of get that initial consult. And that could lead to additional demand for services if something requires an in person visit. So telehealth is obviously a game changer, but certainly not going to decimate healthcare real estate. And then the final the final finding that came through is that the quality of the facilities are important and can influence patient choice. So there's some strategy there for healthcare providers to create a sense of place, you know, a sense of arrival to know that you're in a system or in a facility that is clean and safe has got the right support that you need. So all of that does matter. But at the end of the day, it's really about location and convenience. So those are the three findings that came through.
Patrick Kothe 14:46
It's been hammered into all of us over the years Location, location, location, and nothing new there. But a lot of interesting things relative to the location that I that I found in here. And it said quickly, you know, the way that people have sought health care is they don't necessarily shop or they haven't in the past necessarily shopped for health care, it's this hospital is in 15 minutes in my house, that's my hospital, they don't go across town to go to a hospital or a haven't hasn't been the case, it's more proximity to where you're located. Let's talk a little bit about some of the things that you found that were kind of interesting within that, that location area. Because you know, within here, you say, 83% of the patients of traveling less than 30 minutes to access care. That seems to be kind of realistic, it seems to be what's happened in the past. But what are some of the other things that were kind of interesting, when you start thinking about location, you're right,
Amber Schiada 15:54
30 minutes to 30 minutes or less to get care hasn't changed much over time, it's almost validating, but it could inform strategy, as well, for healthcare systems that are looking to expand, you know, if you're trying to center in on a patient population, you want to make sure that you're still looking at a convenient location to, you know, I think where we see some of that difference in in how far people are willing to go really just is tied to the specialization of the care if you need to get a special service to see you know, or see a specialist if that if the best specialist is an hour away? Well, you're certainly you're going to make that trip. Right. So I think that was the interesting distinction there, we are seeing that there are some differences in terms of how important the location conveniences is, as you dig into some of the demographics. For Gen Z, it is more important than most other groups that they have that location and convenience factor. I think that makes sense given this this is the generation has grown up with everything immediately available and online. So what was interesting, though, is that baby boomers also felt it was similarly important. But I think that has to do more with mobility and the frequency with which a lot of these baby boomers need to get care. So that convenience factor to be close obviously makes sense. Millennials, surprisingly, are also finding that this is super important. So it's it's obviously everybody thinks that it's important to be close. But the differences between the boomers and the millennials, I think is probably the most striking comparison there. But I think if you think about the demographics, it makes sense.
Patrick Kothe 17:27
While there's going to be some interesting data that we're going to discuss when it gets into those groups, when it comes to the type of facility or the or the newness of the facility there thought that that'd be pretty fascinating. Well, you mentioned the specialization piece. And that was kind of interesting, too, because within the report, it says only 23% of surgery center respondents indicated that they traveled for less than 15 minutes to access care. So as you get more specialized, people will be traveling farther. And that's what the expectation is.
Amber Schiada 17:59
Yeah. What's interesting, though, is there's been an increase in outpatient volume, outpatient volumes continue to grow because of that, you know, the changing reimbursement models and the fact that you can get more specialized care and and outpatient facilities, especially in you know, ambulatory surgery centers and things like that. That is something that I think we're going to continue to just see growth, you know, more of these facilities popping up, you know, that need for care doesn't diminish over time. In fact, it will only grow. So what we're seeing is health systems. Now we're trying to strategize for the future and figure out where do we zero in on our portfolio growth based on the patient's we're trying to access in the kind of care that we're seeing increasing in frequency. And even though it's very few people who are able to get specialized care close to home right now that over time could change as the landscape of healthcare provider changes.
Patrick Kothe 18:49
And as more more ASCs come in, I mean, this is a business opportunity, people want to stay close. Right now there are only 23% of them are able to be within 15 minutes. Well, that sounds like an opportunity to me. Yeah,
Amber Schiada 19:01
exactly.
Patrick Kothe 19:03
Here's an interesting question. If your care was the same, would you choose to go to a health care provider that's closer to you, or newly built 83% would prefer to be close to care, even though the facility is old? There you go. You're gonna go go to old place, if it's convenient to, you'd rather have the old place in the new place.
Amber Schiada 19:26
That's right. It's nice to go to a new place, but maybe the best doctors in the old place because he's been doing this for 40 years, you know, so there's some of those qualitative factors to that you can't really measure in a survey like this, but that's where we try to figure out the why. And, yeah, I thought that was interesting, too. I think I'd probably choose that answer too. I'd rather go closer.
Patrick Kothe 19:46
It really is interesting, because people are making decisions on what they do with their with their facilities. Should we be updating it? Should we build a new one, you know, how important is that? And when you get data like this, you say, you know how much investment Do I need to make it into facilities? Or is the location, the main driver? And it sounds like at this point, the main drivers obviously like to have both. But given one or the other location, Trump's better facilities.
Amber Schiada 20:13
Absolutely. Which is probably good news today, if you're trying to figure out your portfolio or your strategy as a system as a healthcare system, because it is very expensive to build out space today, you know, the supply challenges that we're seeing are just delaying any sort of timelines here. So if you're thinking, you know, do I invest capital into my old facilities? Or do I try to target a new location, I mean, that's the balance you have to weigh right now, especially in a business where margins can be pretty slim, and costs are super sensitive.
Patrick Kothe 20:46
So let's go into into the second theme and second theme to telehealth and virtual care, and start to dig into a couple of things there. Within this research, you showed some changes between 2020 at early stage of the pandemic and 2022. Can you characterize what what those changes were?
Amber Schiada 21:05
Yeah, the pandemic forced a lot of things to go virtual, because we had to, and that included medical care. So one of the questions we asked in the survey this year, was and also in 2020, was during your medical services, was any component of that care done virtually doesn't necessarily mean it was an appointment that was initiated via telehealth, but it could have been an ongoing treatment program. Perhaps, you know, psychological health, a lot of that went virtual. So what's interesting is in 2020, about half of patients responded and said there was a component of care that was virtual, but that slid back a little bit in 2022, to about 38%. So it's it's interesting that the components of care that had to go virtual in 2020, some of those were able to come back into the clinics because of the pandemic and hospitalization rates subsiding somewhat, which is good news for a number of reasons. The other question we asked about telehealth was, did you initiate a telehealth visit? And 50% of patients said, yes, they did. So I think for some of the convenience factors that telehealth can provide, especially if it's, you know, maybe a simple question, maybe you've got a mole that you're not sure about, you can initiate a telehealth visit. And that seems to create a little bit more efficiency. And so it's interesting that people are feeling more comfortable adopting that and also more health systems are providing that as the standard part of care.
Patrick Kothe 22:28
That ability or that willingness to embrace telehealth is also different based on Gen Z, millennials, Gen X baby boomers talk to that a little bit.
Amber Schiada 22:40
So I thought was really counterintuitive. One of the results, looking at the location of where the respondents live, whether it's rural, urban or suburban, urban respondents led the way in telehealth visits, which surprises me, because typically you can walk to an appointment or get there pretty quickly. But maybe there's just, you know, it's sort of there's that convenience factor. Why even do that just there's just initiated telehealth appointment online. And maybe there's something to be said about urbanites having better access to internet or I think having broadband access is certainly a driver in some of that, especially when you look at the rural communities, I would have thought that we'd see more telehealth visits from from the rural set. But I think part of that is just infrastructure challenges. So that was a surprise counterintuitive for me. But then, you know, if you look at by generation, millennials love telehealth they were one of the largest drivers of this demand segment, overall, other generations, which again, is a surprise, given what we know about Gen Z, and how much they love to be online. So I think there's something to be said about that personalization. And, you know, we've heard over the years about, you know, a lot about millennials, people love to talk about millennials, and, you know, we don't talk on the phone, we'd like to text, you know, everything has to be digital. So maybe there's something to be said about that preference and communication style and personalization that millennials have versus some of these other generations.
Patrick Kothe 24:04
And the boomers like me are lagging.
Amber Schiada 24:07
I mean, yeah, it is, you know, it, I think it's interesting. It's the generational difference in how we communicate and what's important. Perhaps
Patrick Kothe 24:15
one of the other things that you discuss is, you know, would you prefer a telehealth visit in the future based on your experience? So you said, you know, 50% of people that initiate initiated a telehealth visit, but let's look at the future. What did you learn about that?
Amber Schiada 24:31
For the most part, it's positive most for the most part, all of the generations indicated it was a positive experience, they would do it again. Again, the baby boomers are lagging a little bit there. So if we could pick the brain of some of these consumers that answered our survey, I'd want to know, what was it about that visit that you found to be unpleasant or would dissuade you from returning? Again, millennials were the lead here they overwhelmingly 82% So they would definitely schedule another telehealth, visit. They were ahead of the boomers by about 13 points. So boomers only would say yes to that 69% of the time. But overall,
Patrick Kothe 25:08
we're at 76%. People say they bring it on. Yeah. Telemedicine,
Amber Schiada 25:14
it's a positive experience for most, which I think is a good indicator for folks working in the healthcare space, and thinking about how can you continue to implement this? And what are the ways that it creates a better positive patient experience than others? You know, certainly different health systems have their own platforms. And we didn't get into that in the survey. But that would be a secondary question that I'd ask is sort of what is it about that service or your healthcare providers service that that made it a memorable for you to come back?
Patrick Kothe 25:44
What I also found interesting is you looked at based on site of care, telehealth based on site of care whether it's a Minute Clinic to urgent care or hospital or a doctor's office or a surgery office, and whether they preferred telehealth within each of those settings. Explain that a little bit.
Amber Schiada 26:05
There weren't too many surprises here. For me. Honestly, if you look at how respondents sort of ranked, where they prefer to have a telehealth visit in the future, it has to do more with the urgent services or the quick services. And so the top three responses or Minute Clinic or retail clinics, so something that is probably not a serious issue. But if you have a telehealth visit, maybe that could have been solved faster instead of waiting in a Minute Clinic for what is never a minute. And then the number two answer was behavioral health psychiatry. So 82% said that they would have preferred a telehealth visit, which makes sense because as we've seen, there's been a ton of adoption of behavioral health services on line. And that has accelerated beyond all compared during the pandemic. I think telehealth for behavioral health is still around 60%. In the meantime, healthcare overall has seen telehealth dropped to about 8% of visits. And it's just that dynamic between the kind of care you can get with the psychiatrist or psychologists, you don't necessarily need to be in person for all of that. So, so that makes sense. And then the urgent care. I mean, although I don't know how good a telehealth visit is going to treat you if you've got you know, broken finger, but you should probably just go to the urgent care center. Or maybe it'll convert what
Patrick Kothe 27:22
I found what I found really interesting about this as you when you look at all of these different places, though, the the preference for telehealth was 85%, in the MinuteClinic, all the way down to 66% at a surgery center, so everything was 85 to 66%. Obviously, you can't treat a broken arm with telehealth You can't treat chest pain with telehealth or you shouldn't achieve telehealth. But so so it was really interesting to hear what consumers want versus what is able to be delivered the quality health care that needed to be delivered.
Amber Schiada 28:00
Well, you say surgery center but you know what I'm thinking is wouldn't it be amazing if you could initiate a visit via telehealth I broke my ankle once and I had to go to the hospital. It took two days before they would see me and they're like, Oh, you probably sprained it turned out it was broken. And had I had a device that could just take an x ray of my ankle. Can you imagine? I mean, that's that's an idea. I don't know if it's possible. But you know, the future is is limitless. So you never know.
Patrick Kothe 28:26
That's a very wide topic, I don't think. But But in essence, what consumers want is they want to have some answers from home, as opposed to going to a going to a location. We'll just kind of leave that one leave that one there. But the generation generational preferences, as we said, you know, that was pretty interesting, and that the millennials are really driving this.
Amber Schiada 28:53
Yeah, we learned we asked one final question on that. And it was if you had the opportunity to get an appointment sooner would you have taken a telehealth appointment? And 52% of baby boomers said no. And 60% of millennials said yes. So I think that's another interesting finding. It's I think it really just speaks to that personal care that those different generations seek and just their comfort level with digital tools.
Patrick Kothe 29:20
You did mention psychiatry as being one of the one of the other other areas. I think that that is that's really an interesting finding. Because those services from a real estate standpoint, they may end up being more of a virtual thing than, you know, bricks and mortar.
Amber Schiada 29:40
Yeah. And if you think about some of those providers, they don't necessarily need to be in a medical clinic, depending on the type of care psychiatric care they're providing. There's certainly a spectrum of care in that in that area. The telehealth option really opens up the doors to greater access to that kind of care, which I think is probably more needed than ever given what we've been through in the last Two years. I do think that from a real estate perspective, it's certainly not a demand driver, if you can provide care virtually. But I do think there's, you know, greater benefit to having more of that care. I think the biggest challenge right now, there's just not enough providers to provide that kind of care.
Patrick Kothe 30:18
So let's get into the third theme. And that third theme, quality of care and facilities themselves can influence choice systems can increase patient access through modernizing key facilities. So talk to me about some of the some of the interesting things that were within that segment.
Amber Schiada 30:35
Yeah, we asked a couple of questions around this, this topic. One was the quality of the visit, you know, like, what was your experience, sort of the sentiment pulse as you leave? You know, this generational difference was really striking, because given all of the things we just heard about Gen Z and telehealth and location, convenience, they had the least positive experience among the groups, so only 58%. So they had a very positive experience with their recent care. But baby boomers had 77%. So they had a positive experience. So what's driving that divide? I think it's around expectations, sort of, you know, like, we're like, what is that? And I don't know, maybe part of it with Gen Z is we've seen a lot of these third party, concierge medical services pop up over the last decade. And I think there's sort of this difference in an expectation being formed because of that. So I thought that that was really interesting, because, you know, I think, you know, Gen Z just has higher expectations clearly.
Patrick Kothe 31:34
Well, I found it fascinating too, because it really went by age, the older you are, the more satisfied you are. And, and and whether it's I don't think it's that the boomers got better care, as it gets at the boomers, expectations were met. And for whatever reason, the younger people didn't feel that whatever their their hands were held, or they received the you know, what they thought what they thought they deserved. So I thought that that was kind of an interesting thing. And as as you start to build facilities or move facilities, you're you know, you're you're retiring the baby boomers, and you've got these other groups that are coming in. So it's important to understand which groups are the your main customers that want at that point in time and how you're going to serve them best,
Amber Schiada 32:23
right? You know, baby boomers, they are the largest drivers of healthcare spend. But as they continue to age, and as these generations that follow continue to age, that group is much larger on a volume basis. There are many more patients in the age groups that comprise Gen X, millennials and Gen Z. And younger even I guess, Gen alpha is the new generation that follows. So even though there's not quite that volume, yet the wave is coming. So I think the better that healthcare providers and anybody in the healthcare space can understand what those generational differences are, the better that these providers can meet the needs of those, those generations and their expectations.
Patrick Kothe 33:06
Well, speaking of expectations, you also looked at the environment, the facility environment, and the expectations what of the facility itself, and also looked at it from from the age groups as well. And it came out basically the same to this the boomers. were satisfied with the facilities and the younger you were the less satisfied you were with the facilities that that Did that surprise you.
Amber Schiada 33:33
After seeing some of those other results, it started to surprise me less some of the key factors that we honed in on as it relates to the environment expectations were around safety, cleanliness, how modern or inviting is it? Can you find your way around once you're inside? You know, is there enough staff there is parking is parking easy and accessible? Those sorts of convenience factors, but also safety and quality and cleanliness factors were really what we were trying to hone in on. And as you said, the generational differences on some of these factors are pretty striking. For Baby Boomers, their number one expectation is that the facility is clean, which let's hope so it's a hospital or medical clinic. But the number one expectation for Gen Z is that it's safe. It's actually tied with cleanliness, cleanliness, it's right on par. But the safety net factor is also is important for them. So it's interesting that the baby boomers across all of these categories have much higher expectations across the board and Gen Z as you go down in each generation, you see the expectations drop a little bit more each time, whereas Gen. Gen Z has the lowest expectations. So I think again, goes back to that expectations and what they anticipate will be the experience and then the reality, the reality of it and maybe baby boomers, having lived through modern medical miracles for the last 50 years their expectations. Maybe they just don't need to grow. Everything's been amazing. I don't know
Patrick Kothe 35:00
When you go to a restaurant or before you if you're gonna go to a new restaurant, a lot of times you'll you'll check the reviews online or you're gonna go to a movie, you're gonna check the reviews online, how many people check the reviews of the hospitals or the health care facilities before they go to?
Amber Schiada 35:19
Um, it depends on the generation. Overall, 40% are checking if you look at all generations grouped together. But if you look at baby boomers only 18% are looking up any online reviews before they decide on a facility. Again, I think that goes back to comfort with digital tools. And just the way you know that they've done business with their healthcare provider. In some cases, people have been with their provider for a number of years. And so there isn't really any need to do any due diligence. Gen Z. And Millennials by and far are the ones that are looking at online reviews and sort of doing a dossier before they decide to pick a provider or facility, with millennials responding that 47% of them said that they do check online reviews and Gen Z only 45%, which is a little interesting on that difference. Now, if you look at it by geography, urbanites. 43% of urbanites are checking reviews, before they decide on a provider, probably that has to do with the fact that they have a lot more choice. urban centers are dense, there's a lot more providers in that area and a close proximity. I know having lived in San Francisco, and a couple of years ago, when I would look for my own provider, I had, you know, dozens of choices within a half a block radius, sometimes in the same building. So I think that is probably more effective, just how much choice you have if you live in an urban environment. Rural respondents only 23% Check reviews, but they probably have fewer choices, especially if they try to drive somewhere in 30 minutes or less.
Patrick Kothe 36:54
So everyone loves to go to a facility and wait in line, as you said, the minute clinics are never a minute. But what kind of feedback did you get about waiting and waiting to get an appointment?
Amber Schiada 37:06
We asked our survey respondents thinking about their last visit, how long did you have to wait to get an appointment. And for the most part, people are able to get an appointment within a week, you know, between one day and a week, which is pretty good. And I think part of that is just the digitization of the industry, it's easier to book online, you're able to do your due diligence, find your provider, sometimes people choose a provider because they have an appointment available. So I think some of that has opened up the avenues. So baby boomers, you know, they were the least lucky when it comes to this generational difference. Only 22% said they could get an appointment within one day, and 37% so they can get it within a week. Whereas Gen Z, maybe they're more digitally savvy 32% said they could get an appointment within one day and 38% within one week, so pretty rapid service. But I wonder too, if that's partly because of the adoption of sort of these concierge medical services that Gen Z and some Millennials have kind of taken hard to. But there's different avenues to book and I think that influences that that difference.
Patrick Kothe 38:09
Oh, you also wonder if it has to do with I only want to go to my doctor or you know, the the ocean that I'm fishing in is really small. Whereas the ocean that younger, younger people may say I'll go to a lot of different places, it doesn't have to be the doctor that that had been going to for 20 years,
Amber Schiada 38:28
I have no loyalty Gen Z to I think the specialist has has something to do with that too. As you as you age, there's no more specialized care might be needed. So there's only so many specialists in a certain area. So that definitely influences that.
Patrick Kothe 38:44
Well. So many so much great data in here. And it really comes down to you're doing this you know not to provide great data but to drive decisions that healthcare systems are making or physician groups or IDs that are making. So let's let's talk a little bit about your customers and how they utilize this type of information. So who you said that, you know, within the healthcare segment, let's stay within healthcare facilities. Who Who are they are the IDs or the hospital groups? Are you tell me about the profile of different customers?
Amber Schiada 39:21
Yeah, we work with a lot of different providers that across the spectrum of health care, we work with a lot of major health care systems, either regional or national in scope. And they obviously have very complex needs. We also work with Physician Clinics, we have a lot of physician groups that we work with, and we'll represent them on their lease transactions, or if they want to buy a building. We'll help them with that. So we're doing location selection, site selection for different physician groups, depending on their specialization or what patient population they're trying to find. So that can run the spectrum depending on you know, there's millions, hundreds of those hundreds of 1000s and then we also work with senior care. So we do have With a group that focuses on senior housing assisted living, that end of the spectrum with health care, we also have clients that are sometimes independent physicians, you know, that that just need to find an office space. So it can really run the gamut from really small to really large and everything in between. So depending on the complexity of that client, or the complexity of their needs, that influences the kind of service that we can provide. Some are very focused on, you know, site selection and market penetration as they want to grow or double in size. And they got to figure out which markets they need to be in. So we'll help them with that with our location analytics platform. But some systems as you know, very margin sensitive, how can we reduce costs? How can we mitigate risk? How can we improve our patient experience, what are ways that real estate and facilities management can help influence that so we do a lot of work for our larger clients that sort of sits in that realm.
Patrick Kothe 40:52
So you take a market research report like this, and let's let's just say, you know, we use uses earlier, people want to be close, they want their facilities, close, ASCs are farther away, it's a specialty, if you can say if you can show, hey, here's the population, here's a boomer population that's going to need hips and knees, and there is an opportunity to put an ASC in a really concentrated area, within 15 minutes of X amount of people there, that that becomes a really good target as long as it makes business sense. So using the research out of here to help drive decisions for different groups.
Amber Schiada 41:31
Yeah, and it can actually help with prioritization, because you can't do it all you can't have, there's no perfect location. But it really depends on the strategy. So if a large system is trying to target the Gen Z population and grow that patient population, for whatever reason, the insights in a report like this can help prioritize where they should focus. So you know, to your point earlier, we've learned that location is most important above all else, convenience and location matter. If a big health system is trying to decide whether to invest capital in improving all of their facilities, or invest that same capital to expand in a new market where they can grow their patient population. Given that that, you know, difference, they may decide to expand and worry about the facilities later. Because at the end of the day, you want to be able to capture more patients and provide more care access to patients is critical for systems. So I think it helps with prioritizing you sort of kind of understanding the pulse of the consumer today, and prioritizing and informing strategy as it relates to whatever it is that these systems or small physician groups are trying to achieve.
Patrick Kothe 42:40
So What trends are you seeing within the healthcare segment in terms of of real estate with your think ASCs is one, you know, what are some of the trends, you know, major trends that you're seeing?
Amber Schiada 42:52
Yeah, the healthcare industry is it's very interesting industry today, because we've just gone through this pandemic, and we're still going through it. Honestly, through the lens of real estate, the healthcare industry is seen as one of the most resilient, steady, steadily growing sort of users of real estate. It is a tenant base that tends to be really sticky. So there's, you know, once you're in a space and you've got access to those patients, you tend not to move because that's your location is your there your critical. The research that we do for our healthcare industry is really focused on what's happening with the industry itself. So what are the challenges that healthcare providers are facing today? What are some challenges they're going to be facing as we go through this choppy macro economic environment? And what does that mean for the real estate use? The biggest challenge for healthcare providers is really margin costs, costs are increasingly going up. That doesn't seem like there's an end in sight. And I think how to sort of mitigate those costs is probably the number one problem that health big health systems are trying to solve today. There's certainly an impact on real estate, as it relates to that, you know, a lot of the facilities management services that we provide can help mitigate some of those costs, or at least consolidate some of those costs. I think what we've seen over the last 20 years is this continued activity of scaling a lot of systems or acquiring smaller systems or merging with other systems. It's recreating this systemization of healthcare across the United States, because the more that you can leverage resources or pull together resources, the better you can access more patients, I think that we've seen a lot of that in the last 10 to 20 years. And so, you know, over the next 20 years, who knows how many more systems will be left, it'll be you know, 10 big systems. And that's it. I don't know if that's just a prediction. But what what that means for real estate, and for a lot of these systems, as they're thinking about margin and cost is, you know, as you continue to merge or acquire different health groups, are you truly saving on costs? Are you able to consolidate some of those costs, are you or do you just have 10 different management teams and aren't super, you know, maybe not aligned? And what kind of risks is that? Great. So that's a lot of that's a lot of detail, but kind of gives you a picture of what we're thinking about when we're thinking about how to identify those challenges for healthcare companies for our clients. Because we believe that there are certain levers that real estate can provide to help mitigate some of those costs. So we're always trying to get to that nugget. That's that's the hard part is how to prove that out.
Patrick Kothe 45:20
Let's talk about ownership for a second. So the term that you're using earlier was occupiers those are the people that, that healthcare providers who don't own the facility but occupy the facility. And so are there some trends there right now? Are people more apt to buy? Are they more apt to lease or what what's what's going on? Trend wise there?
Amber Schiada 45:47
Yeah, it depends on the on the user on the occupier. So a lot of health systems own their own hospitals and own a lot of their facilities. There is a term that we use on campus versus off campus on campus, real estate would be affiliated with a big health system off campus, real estate is typically independent users, but they're they like to be close to the system, because if they're a physical therapists provider, or a pharmacy, I should say, they you know, there's there's certain advantages being proximate to on campus. So when we think about real estate, in the medical office space, a lot of these large systems because they tend to own their space, what we're really focused on with those clients is helping them manage that space. Now, we also work with owners of medical office spaces, there are a number of Lot handful of public REITs, Real Estate Investment Trusts that trade on the stock market, and they own medical real estate, they have strategies, they have strategies that are focused on owning and operating medical, real estate. Because, you know, obviously, as I mentioned before, there's a lot of stickiness with this tenant base, it's, you know, there's a lot of demand factors that will create growth for the long term in the sector. A lot of investors see it as an essential need. Just like, you know, housing is an essential need healthcare is an essential needs. So as an asset class, the medical office, investment community really sort of views it in that sense.
Patrick Kothe 47:14
My assumption is that hospitals are owned by the hospital group. They're not leased. Yes, my assumption is that medical office buildings are either owned by a group of clinicians or outside investors. Correct is that, that that's pretty much it. ambulatory surgery centers could be owned by a hospital or could be owned by physician groups.
Amber Schiada 47:42
Yes. However, we're seeing a lot of investors buying ASCs, there's a lot of interest in that sector, because of the shift towards outpatient care and how specialized care is continuing to move into some of these ASCs outside the hospital. I think that's got investors interested. So we've seen a lot of interest in those types of facilities among the real estate investment community, also for behavioral health clinics, and for IRS, integrated rehab facilities, specialized care, not hospitals, necessarily, but certainly areas where patient demand is growing. So investors look at it from that view.
Patrick Kothe 48:25
So we've got investors that are coming in more than in the past, because there's, it's, as you said, it's a sticky business of physician. Once they're in a in an area, if they move across town, they may move across town, but their patients aren't moving. So somebody else is going to be in that facility and it's gonna take over their their patients. So it becomes not a lot of turnover within those buildings and and, therefore, good stable investment.
Amber Schiada 48:54
That's why investors love it. That's the That's exactly the reason. And we've seen consistent rent growth, not so good for occupiers because nobody wants to rent to go up but great for investors, because it's a steady sort of trajectory that we've seen. It doesn't have the volatility like the office market does. We've all seen all the headlines about people working from home and no one's going to the office. I think a lot of office landlords are a little bit worried right now. But healthcare investors are not. So we're always going to need medical care.
Patrick Kothe 49:22
really been a fascinating part of the discussion. I want to touch briefly on the other part that you mentioned and it's life science. Industry, there's you've got life science companies that have real estate needs, and they have specialized real estate needs. It could be manufacturing could be cleanroom space. And there's also governments or cities or initiatives that they've got, you know, we want to build a life science community within our city or you know what they say that and you're one of the things that we need to draw companies in is we need more of this type of office space. We need more cleanroom space we You have these types of resources. So you're you're also dealing with those companies as well, correct?
Amber Schiada 50:05
Yes, we have a life sciences practice that all we do is focus on pharmaceutical companies, life sciences companies, and we have specialists that are experts in the real estate side of it. So what actually is required from a facility? What locations makes sense for this type type of industry, there has been a tremendous growth in this sector, since the onset of the pandemic, you know, the way that we work with these life sciences tenants is, one, we're working with startups who are either coming out of incubators coming out of universities looking to start their first company, so they've just gotten an injection of venture capital, and now they need office space or lab space, really. So we work with companies in that way. We also work with global pharmaceutical companies that have portfolios across the world and, you know, without naming names, you know, big companies that need to figure out where are they going to manufacture their therapeutics, where are they going to have their r&d presence? How does this all work together? And what's the supply chain look like? So kind of solving for that equation, very complex, you go to the startups, and then all the way to those global pharmaceutical companies in those needs. And everything in between, there's just, it's very different. What we've been tracking really closely with the life sciences industry as of late is the potential cracks in the startup system. Because with, you know, over the last few years, there's been a lot of venture capital investment going to these life sciences, startup companies, a lot of excitement and interest and desire to advance scientific research and, you know, come up with the next breakthrough drug, right, because of the pandemic, I think, again, is sort of highlighted that opportunity for investors, and potentially investors who weren't as familiar with the space before. So we saw record levels of venture capital funding, go to the startup companies, life sciences, startup companies in the last two years. What we're starting to see now is there's a little bit of a slowdown in that activity. And so for real estate folks, that worries us because that's a sort of a leading indicator for demand slowing down and potentially demand for this real estate slowing down. That is something that we're watching closely, but we haven't seen levels dropped to pre historic VC levels. So we're still pretty elevated in terms of what that capital environment looks like. The challenge is that a lot of biotech stocks that went public last year, in fact, 90% of them, or maybe more now, are trading below cash. So a lot of these companies went public a little too soon, I think VCs are trying to get the exit a little sooner than they should have. It's really risky to go public like that if you haven't gotten past phase two or phase three trials. So it's kind of so that has been an interesting dynamic, because now with the macroeconomic challenges that we're facing, with interest rates going up cost of capital going up. I think VCs are getting a little bit more cautious. So they're doing more due diligence on the kinds of companies that they're going to invest in. They're also not able to depend on the public market as the exit strategy, not in the near term. So we may see more mergers and acquisitions. The awesome thing about the life sciences industry is that it is an industry that's focused on advancing human health and human life and all those great things that that we as humanity like, and it is a very capital intensive scientific effort to get a drug to market. It takes a lot of years and a lot of money. But because there's so much interest in advancing science, right now, there's still a lot of money on the sidelines waiting to invest in good ideas and good science. And so unlike the tech startup phenomenon that we've seen over the last 20 years, it isn't a boom and bust type of industry. I think life sciences overall has a lot of legs to stand on for the next decade or more for the foreseeable future. So any choppiness that we're seeing in that venture capital trend right now, we think is more of a blip and just an indication of the larger macroeconomic environment rather than an indication that life sciences is flash in the pan and everyone's over it. That's definitely not the case.
Patrick Kothe 54:06
So you're a global company. When you look at investment within life science, you would think about the US it's a Bay Area, Southern California, Minneapolis, St. Paul, Boston, down in Triangle Park, we've got some stuff going to Texas, are there other areas of width of the US that are hot, and let's talk about international and where you're seeing investment within Life Science changing.
Amber Schiada 54:35
You hit almost all of the top markets, I would add Seattle to that list. So that has seen a lot of activity in the last cycle, and still is seeing a lot of activity. You mentioned Houston, Minneapolis, St. Paul, I think those are great examples of emerging markets that have an excellent health community that serves as a vector to expand the life sciences efforts. What we're seeing in the US and in the industry more broadly is the vergence between the science and the tech, the tech in science convergence is accelerating the timeline in terms of how fast you can get to that next discovery. And so markets like Seattle markets, like the Bay Area where you have that tech talent already embedded, combined with the growing talent on the life sciences side, on the scientific side, that's where we're seeing some of the growth as it relates to biotech firms, genomics, firms, things, you know, companies that are actually using biotechnology to develop new therapies. So those markets, all of those markets that you mentioned, are certainly the hot areas. What's interesting if life sciences as it really is a an industry, that is a clustering type of industry, it isn't something that is easily scalable, it's really tough to create a new life sciences community overnight, you really have to have those those deep roots in terms of the talent, the university system, the research efforts, it, you know, think about Research Triangle Park, great example. It was a conservative app, concerted effort for those community for that community to come together in the 50s. And say, we're going to invest in and create this community. Same thing in Palo Alto, in Silicon Valley. So Cambridge in Boston, you know, these aren't places that come overnight. So we've been getting a lot of questions like yours, you know, what makes the life sciences market successful, what other markets exist. And because it takes a lot of factors to create a world class ecosystem, it is a long term vision, you have to have a long term vision for that market. So outside of the US, where we're seeing a lot of activity is in China, and India. So those are two markets that are growing pretty quickly in APEC. Obviously, China huge population, a lot of scientific investment, they have, you know, some real goals to advance the startup communities, we've seen a lot of startups coming out of China, India has proven to be a pretty in high demand manufacturing center, it's, you know, it's it's got the more affordable labor, it's got the land and the ability to build these big plants. So those two markets have seen a lot of activity. Singapore and Japan have also seen some activity more on the r&d and the innovation space. In Europe, the market is dominated by the UK, Germany, and the Netherlands. So that's where you're gonna see most of the activity in France, of course. So the startup scene, the startup scene in the UK has been just taking off it has it saw double DVC investment last year than it did in the previous year, on par with what San Diego sees. And that's just not something you'd see in the UK, a lot of startup activity is really concentrated in the US. So we're seeing the seeds of innovation start to spread throughout the globe. And we're really seeing the industry take roots, much deeper roots in some of these key markets.
Patrick Kothe 57:46
It's also interesting to point out that when we say life science, life, science can mean a lot of different things. And from your standpoint, you're looking at everything encompassing life science, from biopharma to bioinformatics to medical device, everything. And when you think about our audiences, more medical device, so the other melding and Seattle may not be a medical device marketplace, it may be more of a pharma marketplace, or bio marketplace. And some of these other places may not be specific and medical device. So I always find it interesting when people start thinking about the industry as being life science. Tell me what that means. Because, yes, it's
Amber Schiada 58:33
definitely impressive. Yeah, no, you're right. It's it's it is all of those. It's it's the pharmaceuticals. It's the medical device. It's even med tech. So what are technologies that are supporting all of this? Minneapolis, St. Paul is a great example of a really strong med tech, market, med, med tech and med device are the dominant in just sub sectors within Life Sciences there. And, you know, we really think that that can be a vector for more of this growth. As you mentioned earlier, a lot of these communities universities are trying to invest in develop these innovation centers. And what does that mean? Well, if you don't have anything there to start with, it's going to be harder to get off the ground. But if you've got a great sort of health adjacent industry already, or life sciences sub industry like med device, that's a great vector for growth. So that's why we're seeing some pickup in places like Minneapolis, St. Paul, there's been more interest in that market lately from occupiers and from investors. Same with Houston, Houston seems like a no brainer, because the Texas Medical Center is like, it is the nucleus of the healthcare industry, really. And there's a ton of research going on with oncology treatments. MD Anderson is a big, you know, one of the biggest cancer centers in the world. So there's certainly some interest in you know, seeing how some of these industries converge. So, as it relates to the med device industry, I mean, I think Minneapolis, St. Paul, Chicago has seen a lot of activity. There's a lot of interest there. But it's got different real estate and needs you know, it's not necessarily loud, wet lab with steam hoods, it's could be r&d space or warehouse space that you just need to test the equipment and, and all that.
Patrick Kothe 1:00:09
Thank you for leading us on this, this discussion, really appreciate it. Some great, great information, kind of to wrap this up, if you were looking at, you know, the next, you know, short term midterm, what are some of the trends that we should be really looking at? And where do you think things are gonna be going from from a, from a real estate market?
Amber Schiada 1:00:33
I think you have to follow the people, we have seen really interesting migration trends during the last two years driven by the pandemic, some of these trends were already in process where people are moving to lower cost markets, more affordable markets, trying to find better quality of life. Once the pandemic hit, and everyone went virtual, it sort of accelerated that trend. So we were already seen a lot of growth in Sunbelt markets in the south, and all the way to Phoenix. But because there has been such a huge influx of people in some of these places, I think what we're gonna see is some of these markets might be challenged to serve that need for all of these patients. So as the healthcare community scales along with the people, there may be some some choppiness in that, but I think a lot of opportunity, because whenever there's a challenge, there's always an opportunity. So how do we meet the needs of all these new patients and all this demographic growth. And I certainly think there's a lot of opportunity in the Sunbelt, because of that.
Patrick Kothe 1:01:26
Understanding patient attitudes, is important to all of us within the healthcare industry, not only to understand how people are feeling today, but what the future is going to look like and the decisions that we that we make today to prepare for the future. A few of my takeaways, first of all, location, location, location, it just reinforces what we all know about real estate, but specific to healthcare, it also reinforces that patients have gone to places that are close to them, and they will continue to go to places that are close to them. Even at the expense of the type of facility, the location is just more important. The second thing to me was generational differences, whether you're millennial Boomer or Gen Z, that really made a difference to the different questions that were asked. A lot of it was fueled by the expectations of the group. Two people may have identical services. But they're viewed completely differently depending on who that person is the age of that person. And I think more importantly, what expectations that group of people have. And it kind of leads me to think about all of our interactions, are we treating people differently? Are we treating them the same? Are we treating that Boomer the same as we do that Gen Gen Z person probably shouldn't be because the expectations are going to be different. The last thing was this report is available to all of us, I would strongly encourage you to download it, it's free, take a look at it. There's a lot of great information in there. And it's going to help you to better understand who your customers are, and also what they're thinking about. And we can also use it to forward to people we think can benefit from it. It'll be valuable to them. It will also be valuable as you're building the relationship with your customers. Thank you for listening. Make sure you get episodes downloaded to your device automatically by liking or subscribing to the mastering medical device podcast wherever you get your podcasts. Also, please spread the word and tell a friend or two to listen to the mastering medical device podcast as interviews like today's can help you become a more effective medical device leader. Work hard. Be kind
