© 2001 Arthur Andersen All rights reserved.

t Real Estate Consulting Group w/ WebPE

How GIS and portal can help manage Health Care Assets

P. Barton DeLacy and Fred S. IllichNovember 12, 2001

HC01_P02C

© 2001 Arthur Andersen All rights reserved.

How GIS and Web Portal Can Manage Real Estate

• Health services must manage assets like a business

• Excess Property should be monetized

• Resources directed to revitalize and expand core facilities

• GIS an important tool to to support strategic planning

• Interactive web-based portals can effectively publish GIS maps

• Portal hosting technology brings GIS functionality to the desktop

HC01_P02C

© 2001 Arthur Andersen All rights reserved.

The Business Problem:

• How best to realize potential value in real estate holdings?

• Consider:– Geography:

• Spread out locations

• Remote decision makers

– Real estate data:

• complex

• dynamic

• Disparate information sources

– Value dynamics:• Asset value optimized when property managed as portfolio

• Information needs to be in one place

© 2001 Arthur Andersen All rights reserved.

Andersen’s RE portal: What is it?

• Web enabled tool to evaluate corporate assets

• Treats real estate as a portfolio

• What does it do?– Quick visual access to properties in portfolio – Three view display shows:

• Thumbnail photo of subject

• Parcel map

• Brief description

– Real time access to disparate databases– Protocols assure security

HC01_P02C

© 2001 Arthur Andersen All rights reserved.

Introduction

• Public Health uses GIS technology– To track disease– To study market penetration– To map and plan healthcare delivery

• Health services must better manage real estate assets

• Fair value often exceeds book value

• Off - strategy property should be monetized freeing up funds– to expand core facilities– to better serve patient needs

HC01_P02C

© 2001 Arthur Andersen All rights reserved.

GIS as Asset Management Tool

• See what is owned - all in one place

• Displace dispersed assets

• GIS links databases to particular assets– Property descriptions– Third party reports (appraisals, environmental studies)– Digital photos– Additional maps

HC01_P02C

© 2001 Arthur Andersen All rights reserved.

GIS Healthcare themes

• Pattern of surrounding land use

• Changing demographics

• Market competition

• Improve strategic decisions– Model “what if” scenarios– Display analysis through varying map views

HC01_P02C

© 2001 Arthur Andersen All rights reserved.

Conveying GIS information is problematic

• Best suited to an internal intranet

• Difficult to send images or analysis if client lacks– Software

• GIS Expertise

• Proprietary rights and license requirements

– Hardware

• Server

• A personal computer with capacity to run program

HC01_P02C

© 2001 Arthur Andersen All rights reserved.

Low cost web portal can act as a simple interface

• Replicates functionality of GIS within parameters

• No dedicated resources needed

• Interactive to manage complex real estate and facility portfolios

• Well suited to healthcare clients

HC01_P02C

© 2001 Arthur Andersen All rights reserved.

Why Healthcare Organizations face Real Estate Challenges

• RE needs management to enhance overall performance

• RE historically viewed as a commodity- now a strategic asset

• Core services spread beyond campuses to– Medical office buildings– Congregate care homes– Warehouses and other properties

• Property as contributions in lieu of cash

• Ensure room for expansion

HC01_P02C

© 2001 Arthur Andersen All rights reserved.

Mergers, Acquisitions and Reorganizations force greater scrutiny of Real Estate assets

• Some experts argue hospitals have no business owning real

estate

• Federal legislation will shift the medical office ownership from

hospital-physician collaborations to third parties

• Seismic upgrades necessary on many facilities

• Outpatient services growing

HC01_P02C

© 2001 Arthur Andersen All rights reserved.

Real Estate risks

• As an asset class, real estate is typically illiquid

• May be contaminated

• Improvements can deteriorate

• Fixed in place - can become obsolete when demand shifts

• Special purpose designs can become obsolete with changes in

technology

HC01_P02C

© 2001 Arthur Andersen All rights reserved.

Case Study

• Regional hospital determined to implement an institutional

strategic plan

• Master plan to govern core facilities

• Real estate challenges include:– Widely dispersed real estate holdings– Inadequate parcel descriptions– Scattered/missing records– Poor internal communication– Unclear/nonexistent policies regarding development/disposition

HC01_P02C

© 2001 Arthur Andersen All rights reserved.

Case Study - Methodology

• Identify holdings and enter into spreadsheet or database

• Street addresses matched with property parcel ID numbers– Field inspections

• Parcels then mapped with ArcView and county parcel data

• Resulting maps displayed with specific themes– Dispersion of assets - using a regional map to show location points– Parcel ownership around central campus - emphasizing key unowned

inholdings– Vacant and underutilized land around campus - suggesting development

opportunities

HC01_P02C

© 2001 Arthur Andersen All rights reserved.

Case Study - Methodology (cont.)

• Individual parcel descriptions included – county assessment information – a digital photo – digital parcel map

• Properties sorted by use and location can then be placed in the

same binder as tangible deliverable

HC01_P02C

© 2001 Arthur Andersen All rights reserved.HC01_P02C

© 2001 Arthur Andersen All rights reserved.HC01_P02C

© 2001 Arthur Andersen All rights reserved.HC01_P02C