Medical Office Construction Falls Short Under ACA

The future of the Affordable Care Act (ACA) is up in the air, and medical office stakeholders are waiting with bated breath to see how a potential repeal would impact the industry.

No matter how you slice it, the ACA has had a dramatic effect on the number of insured Americans—and, by extension, on the amount of medical office space per insured American, according to recently published data from health care real estate industry organization Revista.

The ACA was enacted in 2010, ushering in a wave of millions of newly insured Americans. Between 2013 and 2015, the number of insured Americans grew by 6.7%, while the country’s medical office building stock grew by 1.9%, Revista Principal Mike Hargrave writes in a blog post about the data. In other words, the amount of medical office space per insured resident fell by 4.5%.

Back in 2013, there was about 1.3 billion square feet of medical office space in the United States, as well as approximately 271.6 million insured Americans. This translates to 4.82 square feet of medical office space in the U.S. per insured resident.

In 2014, the amount of medical office space nationwide increased 1.1% to 1318.9 million square feet, while the number of insured Americans jumped 2.2% to 283.2 million. This led to a gap of 45.4 million square feet of medical office space if 2013 penetration per insured had been held constant, Hargrave writes.

The gap increased to 63 million square feet in 2015, Hargrave notes.

No matter what happens with the ACA, Ventas, Inc. (NYSE: VTR) Chairman and CEO Debra Cafaro feels confident that insured Americans will continue to be insured in years to come.

“That is something that may be done through different structures, but we still feel very positive about building a formidable business in the health space,” Cafaro said in November 2016.

Written by Mary Kate Nelson

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