Asking professionals who approach the health care industry from various angles about today’s market points to an array of answers that well illustrate how intertwined those responses can prove to be.
Consider, for instance, the perspective of Larry Gigerich, the executive managing director of Ginovus, an Indianapolis-based site selection firm. He discussed trends across the sector’s spectrum, the first of which concerned location. Or to be more precise, locations.
The first is the major financial outlays for “everything from hospital sites and on- and off-campus locations to private medical facilities,” he said, with an ample amount of venture capital also being invested “in new drug and medical device products across the oncology sector, whether it’s in facilities, technology, drugs,” etc.
So the doors are wide open with “many companies entering various parts of the market,” said Gigerich, “and an incredible amount of overall investment.”
Big Bang
Gigerich traced the health of certain industry sectors to the early days of the COVID-19 pandemic, when there “was investment by many national and international companies in new treatments,” he said. “There’s been an even bigger [financial] explosion in that part of the market since.”
So positive was (and is) the money wave that large corporations that were looking to enter that part of the market didn’t always have time to make a ground-up investment. So, what to do?
They bought other companies. For example, “Eli Lilly bought POINT Biopharma Global for $1.4 billion to expand its cancer-fighting treatments,” Gigerich said, “and actually spent less money than it would have had it taken a ground-up approach―and reached its destination faster. Lilly would have spent up to five times that amount of money to do it from scratch.”
And the drug giant, “which had already partnered to develop dozens of drugs and has a few dozen more in development, would have taken years” to boost the new operation to profitability, he said.
Gigerich also commented on two developments within the medical diagnostic equipment sector. “There is new equipment that has been developed to help doctors figure out how to treat cancer,” he said. “For instance, Roche Diagnostics is among the companies that gather tissue samples from cancer patients and then uses technology to design treatment protocols. There are hundreds of millions of dollars being invested in similar activities in that space today.”
Such are the advances that have been made in just the past five years that the public might find surprising. For instance, “We’re at the point in the progress of cancer treatment,” said Gigerich, “that patients who are diagnosed with Stage 3 or even Stage 4 cancer have a 50 percent survival rate.”
A key reason for that encouraging information “is the speed of innovation, which has been bolstered in a big way by Artificial Intelligence,” he said. “AI can garner an incredible amount of data, aggregate and analyze the information, then give insights to design much faster treatments.”
Gigerich underscored that observation with a recent example from the past 18 months from the weight loss sector. “There are three new weight loss products on the market,” he said, “that probably would have been tied up in trials a few years ago for extended periods of time.”
Zoom Rx
Gigerich also feels that the use of telemedicine will grow. “It used to be for patients in rural areas,” he said. “However, today we’re seeing doctors use it as a convenience and speed of delivery, especially since they’re under pressure to treat more patients.”
The result of all of this innovation is the intention behind it: People are living longer. While that’s the point that, that happy result comes with a list of necessities.
On the medical device side, for instance, that means more people need hip replacements “and sometimes more than once on the same hip. That’s also driving investment. More people are walking, running, hiking, etc., partially to stay healthy,” Gigerich said, “which also means more wear and tear on the body.”
Still what remains at the forefront of most observer’s minds are, not surprisingly, costs. “Everyone is working hard to control costs and AI should also help in that department, too,” he said, as it can greatly reduce investment.
Dual Efforts
Another trend in the health care concerns creating synergies between connected industry sectors. For that reason, many academic medical centers and hospitals “are combined with research labs,” said Pat Larrabee, vice president of advisory services for Frederick, Md.-based VaLogic BIO, “and are looking to diversify beyond standard patient care. At the same time, they’re adding the ability to manufacture new therapies to their campuses.”
Remember what Gigerich said about expedience? “They want to bring new therapies to patients as quickly as possible,” said Larrabee, “and to do so, they’re moving the manufacturers of new therapies to a given hospital’s main campus.”
Larrabee said that part of the market is hot in the national hubs for cancer and emerging care centers such as Boston, Southern California and Texas, at such preeminent facilities as MD Anderson Cancer Center, in Houston; the Mayo Clinic, in Rochester, Minn.; Children’s Hospital of Philadelphia; and the Cleveland Clinic, among others.
She said the trend “parallels the emergence of advanced manufacturing technologies and cell therapies where the product is personalized. That means that the doctor needs to keep that access as convenient as possible for all concerned.”
Larrabee also cited the importance in this mix of AI and the Internet of Things, “which are being used for health care reporting and other aspects of the health care delivery system,” she said. On that note, she considered the abilities of Alexa.
“What if a doctor’s actual office [technology] can be used to access a patient’s medical information?” she queried. “There is much to consider here, including the issue of gaining that information while not violating any Health Insurance Portability and Accountability Act information privacy policies.”
“If the room is listening, someone has to ensure that the [tech] shuts off at the right time to prevent the information from falling into the wrong hands,” said Larrabee. “That’s not happening today, but it’s being discussed.”
Kathryn Whitmore, CEO of health care analytics firm STS Consulting Group, in Sparks, Md., held that thought. “Leading EHR vendors are realizing embedded AI value in a variety of ways” with the goal of “aiding physicians with administrative tasks and improving clinical efficiency” en route to “enhancing patient satisfaction and financial outcomes.”
While Whitmore acknowledged “there are challenges to overcome to realize the full potential of AI,” she said that “considerable progress has been made in governing key use cases to ensure accuracy and trustworthiness in data inputs and decision-making outputs.”
She also offered an optimistic view of what lies ahead regarding using office technology to create a “listening” room the not-to-distant future.
“Predictive analytics can identify patients more likely to develop diseases and help improve diagnostic accuracy,” Whitmore said. “Ambient listening technology uses AI and natural language processing to enhance the visit experience, including rapidly coalescing changes since the last visit and automating the generation of clinical documentation.”
The Build Outward
Like Gigerich, Larrabee also opined on the expanding importance of telemedicine. “There are cases of patient being admitted to a hospital with congestive heart failure and, after they attain stable condition, they go home,” Larrabee said, “yet they remain monitored by the hospital and might be visited by an emergency medical technician.”
Then there are new radiopharmaceutical therapies that are being used to treat prostate cancer and other diseases. “They basically call for a very small tissue sample after radiation with a swab and target a cancer cell,” she said. “That way, the radiation removes the tumor without the collateral damage that has historically occurred.”
Owen Rouse expanded on Gigerich’s observation about the extension of community health systems, as industry evolution points to addressing the needs of a healthier aging elder generation.
“On the macro level, we’re seeing the expansion of a trend that started in recent years with health care providers focusing on outreach” to its suburban clientele, said Rouse, senior vice president for MacKenzie Commercial Real Estate Services, in Baltimore. “For instance, we’ve seen many locations built in supermarkets and big box centers to give patients the option of one-stop shopping for their health care needs.”
And why does that work? For various reasons, which include access to infrastructure like electrical and plumbing, as well as a sea of free parking. “I think we’ll see this trend continue its upward swing, although the race for available retail space is getting more competitive.”
One recent example is under construction at the former Landmark Mall site in Northern Virginia. Located just off Interstate 95 and purchased by Inova Health System, the 1.1 million-square-foot Inova Alexandria Hospital at Landmark will include a 569,000-square-foot hospital center with 192 beds, an 111,000-square-foot cancer center, an 83,000-square-foot specialty care center and a retrofitted 550-space parking garage. A 1,488-space below-grade parking garage is also planned for the project, with at least 19 parking spaces set aside for electric vehicle charging.
“Another reason this project is significant is that there aren’t many other new hospitals rising these days. I can only think of one in our region, in Easton, Md.,” Rouse said. The six-floor, 325,000-square-foot, 147-bed hospital will be operated by the University of Maryland Shore Regional Health; $100 million in capital funds for its construction has been set aside by the University of Maryland Medical System.
Access Key
Note that the location of these facilities is important: like the Inova project, the new UMMS hospital will be located on a major interstate, in this case U.S. Route 50, and will also rise beside a general aviation airport.
“People who are retiring to such small towns take note of such events,” Rouse said, “and access to health care is key to the calculus in their relocation choices.”
The boom in suburban health access has also heightened offerings of off-campus surgicenters, he said, “which have evolved in recent years from places to get a mole removed to much more complex operations.”
“This evolution has a parallel where there is a critical analysis of what functions need to be on a hospital’s main campus. If you have landlocked hospital, you can’t expand and have to move,” said Rouse, “so the components of on-campus medicine have been rearranged.”
And that can get complicated. “There are also situations where more than one hospital in the same region wants to add services, such as a heart center,” he said, “and that can mean years of fighting concerning which hospital gets to make the addition.”
It’s the Tech
While many other trends are ripe for contemplation, no discussion of health care seems complete with reiterating the impact of AI. And it’s powerful.
“Health care, in general, is being impacted by AI more than most industries,” said Robert Hess, vice chairman, global strategy with the Chicago office of Newmark. “AI will disrupt and improve the landscape, as there is so much information that has been siloed in overall supply chain management; it will advance care and diagnoses information sharing quicker and with a more nuanced impact.”
As for regional health care services, “Telemedicine is more often focused towards providing care to rural and disadvantaged areas, which I think will play a growing role in the health and productivity of not only those vast underserved areas but the overall health of the workforce,” said Hess. “That health care environment will improve, as long as the related industries accept that the telemedical platform will help reduce absenteeism and even turnover.”
Overall, the changes will lead more health care companies and insurers to focus on wellness, he said.
“Also important in this mix is what health care companies do with not only AI, but diagnostics, automation, advance computing and quantum computing,” said Hess. “The information will lead to significant progress across the health care ecosystem.”
“The bottom line,” he said, “is that this all concerns the intersection of health care and information technology with economic development.”
