Private investment in hospitals: A comparison of three healthcare systems and possible implications for real estate strategies

Subject/Research problem<br/>Healthcare is both important and expensive, and is likely to become even more expensive in the future. To keep healthcare affordable in the future, the Dutch government is currently in the process of changing legislation in order to move from a centrally directed system into a so-called regulated market system. Although Dutch healthcare providers have always been private organisations, until recently there was tight central governmental control on quality and investment cost of health care real estate. Once the brief and design had been approved by the Netherlands Board for Health Care Institutions, the government guaranteed the financing of the capital costs. The deregulation of real estate investment that comes with the new healthcare delivery system gives healthcare organisations new opportunities, but at the same time also more responsibility and a higher risk on investments. As a consequence, healthcare organisations have to find new ways of financing. Private capital investment is one of the options. Probably this will require a review of both corporate strategies and corporate real estate strategies.<br/>Research Question<br/>What are the experiences and lessons from private investment in hospitals in different countries and what might be the implications for healthcare organisations’ real estate strategies?<br/>Approach<br/>Based on a literature review and analysis of documents the healthcare systems in the Netherlands, UK and Germany have been studied in relation to different approaches of private investment in hospitals.<br/>Result<br/>The analysis of three health care systems with a different proportion between private and public investment in hospitals has been used to explore strengths and weaknesses of different care systems and possible implications for real estate strategies of healthcare organisations.<br/>Application<br/>This paper provides a better understanding of the opportunities and risks of private investment in healthcare real estate and consequences for real estate strategies. The paper is part of a PhD research project that investigates the scope, context, theories and tools of Corporate Real Estate Management in hospitals