About Our Company
We always strive for the best.
Health Care Is Our Passion
Market forces are driving significant changes to the way hospitals operate in their communities. Clinical innovations are shifting sites for care from inpatient to outpatient and home settings. Insurers, Medicare and Medicaid are shrinking their reimbursement. Consumers are demanding modern facilities, digital connectivity, lower costs and improved convenience. Competition is intensifying between traditional hospital competitors and new limited-service facilities funded by private investors. This is the environment in which hospitals now compete. Micro-hospitals offer community hospitals and health systems a strategy to respond to these market forces. There are more than 60 micro hospitals currently in operation. Most were developed by or in partnership with local health systems or private investors within the last five years. Micro hospitals serve low-acuity patient populations requiring minimal inpatient, outpatient, diagnostic and emergency services. They are located, designed and built as a strategic element of a health system’s deployment plans or as an attractive use of capital. Micro-hospitals, if designed appropriately, avail four strategic advantages to hospital sponsors: market expansion, lower capital risks, lower operating costs and consumer appeal. They are designed and built to optimize patient experiences, maximize staff productivity and serve as a flexible footprint for additional services as demand warrants. The sector is expected to grow as health systems deploy capital to micro hospital projects. Therefore, micro-hospitals serve as a critical element of a hospital’s strategic plan for growth and scale.
The Sponsor Howard Capital Management L.P. is an office dedicated to the creation of wealth through partnership, innovation in finance, investment in opportunities and entrepreneurial ventures. We believe the healthcare system will undergo a greater transformation during the next 15 years than has been experienced over the last 50 years. We believe these changes create a generational opportunity for experienced healthcare entrepreneurs and investors. Healthcare historically lacked transparency, was less attuned to costs, and focused more on volume than outcomes. Replacing that model will be companies that truly create value within the healthcare system. The core to our healthcare strategy is to invest in companies that create value within the healthcare system. We define value as health outcomes achieved per dollar spent. Every company we invest in must either improve health outcomes, lower cost, or both. The objective of the Company is to maximize total return on capital by acquiring health care facilities at an attractive valuation, making required capital improvements, developing available excess land and building world class Specialty Hospitals.
We have assembled a team of professionals with a strong track record and over 80 years of combined experience in real estate investing, construction, development, management, sales and leasing in health care real-estate development. The establishment of a new Health Care Facility the planning and administrative tasks that need to be accomplished to open the facility, on time and on budget are complex and detailed. The objective of the Company’s pre-opening process is to apply our experience as the facilitator of the activities to coordinate the roles of the real estate developer, the investors and the facility staff to accomplish the matrix of steps required to go from vision to opening. This pre-opening process is adjunct to the facility construction process and harmonizes the intangible development of the facility with the tangible results of the construction process. The pre-opening process and the real estate development process do have cross-overs, related activities and responsibilities that need to be defined and resolved to be assured that all of the tasks are completed and yield a functioning facility on the planned opening day.
Micro-hospitals represent another evolutionary step in consumer-direct healthcare delivery in the United States. With an estimated 60 micro-hospitals in the U.S., this is a relatively new type of asset that is distinct from both the small Critical Access Hospital (CAH) and Free-Standing Emergency Departments (FSED). The analysis of the micro-hospital trend suggests that micro-hospitals will likely see significant growth, particularly in states that do not require a Certificate of Need. This type of asset may also represent a new delivery model for providing care in markets that cannot support a full-fledged short-term acute care hospital but require more substantial healthcare services than can be delivered in a Free-Standing Emergency Department including overnight patient stay.
Micro-hospital construction costs typically fall in the $10 to 25 million range – well below the costs associated with building even a 25-bed short-term acute care hospital. The smaller footprint as well as fewer specialized design needs (such as MRI for the imaging center and fully equipped dietary kitchens) allows for a faster construction timeline. Thus, for lower costs and less time, providers can add new access to quality care in their communities. In contrast with Critical Access Hospitals, which by law must be located more than 35 miles from another hospital and generally serve a rural population, micro hospitals populate urban and suburban markets.
Treatment costs at micro-hospitals are typically below that of a full-service hospital but higher than urgent care centers. Although micro-hospitals are able to treat a wide range of conditions due to having inpatient beds, the goal of a micro hospital is not to be a one-stop shop. Rather, most micro hospitals seek to treat the majority of care required by the community (up to 90% of treatments in some cases), but not the higher end of the acuity spectrum. Commonly, but not always, micro-hospital stays longer than 48 hours are sent to facilities that are capable of handling higher-acuity patients. Typically, a micro-hospital is located within 20 miles of a full-service hospital to ensure an efficient transfer process for high-acuity patients. Additionally, markets are evaluated for potential service gaps where demand for full-service facilities is insufficient. Micro-hospitals are well suited to fill the void that exists between freestanding emergency departments (EDs) and full-scale hospitals by providing easy access to care with minimal waiting time. The most obvious advantage micro-hospitals have over larger hospitals is their ability to offer quicker and more convenient access to services. Specifically, one of the major advantages of micro-hospitals over other medical care centers is the fact that they are able to connect patients with specialty and primary care physician networks.
Micro-hospitals represent another evolutionary step in consumer-direct healthcare delivery in the United States. With an estimated 60 micro-hospitals in the U.S., this is a relatively new type of asset that is distinct from both the small Critical Access Hospital (CAH) and Free-Standing Emergency Departments (FSED).
Micro-Hospitals as an Alternative to Traditional Healthcare Facilities
Micro-hospitals have emerged as a growing trend nationwide that presents an alternative to traditional health care facilities. According to a recent US News & World Report, these smaller-scale inpatient facilities are already in 19 states and “serve as a middle ground between freestanding emergency departments that may not offer all the required services and major hospitals that offer more than the community needs” . Micro-hospitals cater to the needs of their communities and provide medical services in areas lacking necessary facilities and resources. Since micro-hospitals are tailored to suit the local demographics, the provision of these services is dependent on distinct needs, and no two micro-hospitals are the same.
Micro-hospitals operate 24/7 and tend to be low-trauma facilities with varying degrees of advanced surgical capabilities. The typical facility has eight to ten observation and short-stay beds, according to a report by the Advisory Board, and a micro-hospital is usually between 15,000 to 50,000 square feet. The emergency department, pharmacy, imaging, and laboratory are core services of a micro-hospital, while primary care, low-acuity outpatient services, dietary services, and women’s services constitute some of the various ancillary services provided . Essential anesthesia service providers and board-certified, emergency room-trained physicians are needed due to the provision of some of the acute and emergency services often performed in larger hospitals, however, there is are no defined standards for staffing a micro-hospital. Examples of possible procedures performed in micro-hospitals include endoscopic procedures, plastic surgery, cardiac catheterization, and spinal surgery, to name a few.
health outcomes Matters invest Forward
Think Small With Big Impact
BUILDING FOR THE FUTURE
It is more important than ever to deliver value. In this post-healthcare reform era, providers are being forced to deliver greater value – and so are real estate developers. Due to the many challenges they confront, providers need their development teams to provide more than just traditional real estate services. They want industry insights and innovative ideas, a comprehensive understanding of local market dynamics, and a range of scenarios to choose from to help solve problems and capitalize on opportunities.
It’s also important to consider how facilities will advance healthcare and what physicians need to keep delivering high-quality patient care. The industry must deliver authentic value not just by cutting costs, but by developing clinical spaces that are more efficient and productive. Today it’s very important for hospitals and health systems to reduce costs, but there’s only so much you can do on the lease rate. We use time and motion studies and healthcare modeling to design and develop healthcare facilities that will be more flexible to meet the provider’s future needs, and which also use a more efficient space layout and reduce total occupancy costs.