Partners Healthcare, a local integrated health care network, is in the preliminary planning stages of expanding the Spaulding Rehabilitation Hospital in Boston to its adjacent parking lot on Nashua Street.
Boston-based Partners Healthcare is in the preliminary planning stages of expanding its Spaulding Rehabilitation Hospital to its adjacent parking lot on Nashua Street, according to Kathy West, the organization’s vice president of real estate and facilities.
West made her comments last Wednesday at a New England Women in Real Estate luncheon.
The hospital, ranked among 2003’s top 10 in the nation by U.S. News & World Report, needs more inpatient space. However, West said that a portion of the lot has been taken over with Central Artery construction and any formal plans must wait until Partners gets that area back under its control. Partners Healthcare, an integrated health care network, also includes Brigham & Women’s Hospital and Massachusetts General Hospital. Joint ventures include the Dana-Farber Cancer Institute and the Harvard Clinical Research Institute.
West, along with Partners Healthcare Network President Ellen Zane, addressed about 300 members of NEWIRE during the lunch event. The number of attendees established a NEWIRE record for an event outside of its annual conference.
In addition to the eventual expansion of Spaulding, Partners is also partnering on several other projects, including Massachusetts General Hospital’s Yawkey Center for Outpatient Care. Past projects include One Brigham Circle in Boston, with 120,000 square feet of office space, and 65 Landsdowne St. in Cambridge.
West said that the unique space requirements and increases in patient volume are fueling the drive for real estate. However, with limited availability of capital, few options in proximity to the main campuses of the hospitals, cost of living and the marketplace, expansion efforts remain constrained.
Utilization Increases
But while the company waits for the marketplace to improve, work continues on the Yawkey Center for Outpatient Care. The complex, which will add 450,000 square feet of new space for outpatient care, will accommodate orthopedics, pediatrics and women’s health. It will open next year.
During construction, the hospital dismantled, catalogued and stored the east wing of the old Charles Street Jail, which sat in the way of Yawkey Center construction. The structure will eventually be restored on the property, in accordance with the state’s historic preservation guidelines. Meanwhile, the remaining wing and central portion of the old jail was renovated into a four-star, 300-room hotel. A majority of the rooms will be completed in an adjacent tower. West said that the developer recently completed the permitting process and construction will begin after Jan. 1.
In the meantime, Partners Healthcare will continue toward its goal of “multi-module” campuses. Partners wants to maximize space by moving parking lots and garages off campus. The open space would provide additional real estate opportunities and create a shuttle system for clients seeking easier campus access.
Zane told the NEWIRE group Wednesday that health care spending continues an upward climb – employers are facing the fourth consecutive year of double-digit premium increases, a trend that Zane said would continue.
Massachusetts hospitals, faced with low Medicaid reimbursements, receive an average reimbursement of 60 cents for every dollar of care provided, according to Zane. The effect, when combined with the shortage of nurses and the state’s high cost of living dampening recruitment and retention of its physicians, has meant that hospitals, and the health care industry as a whole, are suffering.
Zane said that the Massachusetts Hospital Association once listed more than 100 hospitals in the state, but today that number has dropped to between 60 and 70. Mergers, consolidations and closures forced capacity at the remaining institutions through the roof, she said.
The major reason for the hikes in health care costs is that most are related to utilization increases, according to Zane.
“There are more MRIs, more CAT scans, more colonoscopies. We’re consuming more,” she said. “Whether yuppies or baby boomers, we want what we want when we need it. The fact is that a lot of the care being provided is not absolutely necessary – but the punch line is, it’s not for free. As all of us age, it will only get worse.”
Zane said that there is a bright spot – genomics. Real estate developers must begin preparing now for the cutting-edge medical field, she said.
“The breakthroughs aren’t 50 years away, they’re in the next decade,” she said. “It affects real estate because we’ll need more research space.”
As researchers develop new technologies, the space that new companies and teams need will change. Clinical offices, laboratories and other medical space will be different, Zane said.
“We have to begin preparing now,” she said.
NEWIRE, founded in 1982, promotes the advancement of women in commercial real estate. It hosts several networking and education programs each month.
Kristie DiSalvo may be reached at kdisalvo@thewarrengroup.com.
