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Do future hospitals need to be so big?

“A more than $2 billion investment in a 21st-century hospital is a significant city-building initiative that will ensure the citizens of Ottawa continue to receive the best care possible for generations to come in an environment that promotes wellness, learning and research.”

John ClarkThat’s the sales pitch for grand plans to rebuild and expand the century-old Civic Campus of the Ottawa Hospital in the nation’s capital.

Some kind of reimagining is long overdue for our overburdened healthcare infrastructure. The question is should it take the form of “super hospitals” such as this one? Ottawa isn’t the only city on the super hospital wagon; it’s been happening across the country.

I once knew a lady who graduated from the first nursing class at the Ottawa Civic Hospital in the 1920s. Back then, and into the 1950s, when a mother gave birth, her hospital stay could be as long as two weeks. Today, you can go into labour at breakfast and be home, if not for supper, then at least for a bedtime snack.

Tech is changing service delivery faster than hospitals can be built

Much has changed in healthcare in 100 years, and even in the last decade. The prevailing wisdom is convalescence and recovery should take place in the home as much as possible. People fare better in their own calm and familiar surroundings.

It just so happens this emphasis on shorter hospital stays benefits a public healthcare system under great duress. An aging boomer population, coupled with a sedentary lifestyle that’s seen surging rates of heart disease, diabetes and high blood pressure, is taxing our system past its limits.

On the other hand, technology is advancing by leaps and bounds.

Invasive procedures that once required weeks of recovery have given way to endoscopic procedures that might leave you with a few small holes and a discharge the same day. The growing field of telehealth enables healthcare professionals to monitor and manage outpatient care with various gadgets that can track vitals, medication usage and physiotherapy schedules over the Internet.

Take the ShoeBox app. This iPad app was developed for poor countries like Uganda, as a reliable and cheap means to diagnose hearing loss in children. But now it’s being used in Canada because, no surprise, it can also help our healthcare system save money. For $400, it can replace a bulky machine in the hospital that costs around $35,000.

What does this have to do with real estate?

A hospital, especially of the scale and scope of the new Ottawa Civic Campus, is a very large and specialized facility.

It has limited options for reuse or for being adapted to alternative uses should it no longer fit the needs of a changing urban demographic or leaps in technology we can only dimly predict. If you think of the two-week post-partum stay of 60 years ago versus, say, one day today, that one procedure alone now requires 2/52 or 3.8 per cent of the amount of hospital space (real estate).

The same kind of efficiency in space use is seen in many procedures.

We will be deep into a whole new decade by the time this new hospital is up and running, and where will technology be by that point? What kind of public infrastructure will best serve the needs of our population then, with more of what looks like Star Trek medicine becoming reality?

More to the point, it will be really hard to plan such a facility when you can’t anticipate demand during its useful life.

We’ve seen this time and again in the public school system – old, and not so old, schools are shut down in one neighbourhood, while new ones are built in other neighbourhoods. It’s a simple redistribution of resources to where they are needed, as demographics shift in different parts of a city.

Sometimes, these outdated facilities can be repurposed. Other times, they end up a white elephant that must be torn down. Take a look at this video of the demolition of the old Saint John Hospital in New Brunswick, which lasted to the ripe old age of 65.

Might it be far more efficient if a regional entity like the Ottawa Hospital took a more decentralized or streamlined approach? Consider the example of the Ottawa Birth and Wellness Centre in a business park setting on Walkley Road. It’s built into a fairly ordinary commercial building – should the centre relocate, the space could easily be repurposed.

Digital, virtual, personal

In the November/December issue of Canadian Healthcare Technology, Mark Casselman, CEO, of COACH: Canada’s Health Informatics Association, wrote how advances in technology and the Internet of Things is making the future of the hospital digital, virtual and personal:

“Academic medical centres and community hospitals alike will face a multitude of decision points and strategic pivots that may lead to a smaller, more focused physical operation. This will be combined with a growing digital enterprise model that includes virtual care delivery and partnerships integrating community- and home-based care within the context of a larger system.”

Hospitals, it would seem, are destined to do more with less space, so why the belief bigger is better or necessary?

From a purely real estate investment standpoint, the logic is questionable to be pouring billions of taxpayers’ dollars into large specialized new facilities that cover 10s of acres of what is often prime urban real estate.

To discuss this or any other valuation topic in the context of your property, please contact me at jclark@regionalgroup.com. I am also interested in your feedback and suggestions for future articles.


Read more from: Value: Weighed and Measured

John Clark

About the Author ()

John Clark is Vice President with The Regional Group of Companies Inc. He has more than 33 years of experience in the real estate appraisal field, is a fully accredited member of the Appraisal Institute of Canada and has been with Regional since March 1988. His experience includes the appraisal of commercial and investment real estate, including limited use and non-market properties located in most Canadian jurisdictions. John has been an active member of the Appraisal Institute of Canada, and served as its National President for 2001-2002. He also has appeared as an expert witness in court and assessment tribunal hearings, including the Assessment Review Board – Ontario, the Property Assessment Review Board – British Columbia, and the Dispute Advisory Panel (PILT) – Canada. Clients include national institutions (including crown corporations, transportation companies, municipalities, Public Works and Government Services Canada), private companies and individuals.

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