Posts Tagged ‘bankruptcy’

The President on Healthcare: What FDR Said

Friday, August 7th, 2009

Healthcare reform was on the table more than 75 years ago when President Franklin Delano Roosevelt opened a national dialog on the need for comprehensive health insurance.

It was November 14, 1934, when Roosevelt noted the problem of “economic loss due to sickness”, which he described as “a very serious problem for many families with and without income.”  Roosevelt was far-sighted as catastrophic illness remains the leading cause of personal bankruptcies.  According to FDR, “Whether we come to this form of insurance sooner or later on, I am confident that we can devise a system which 0000000003806-004-04362630will enhance and not hinder the remarkable progress which has been and is being made in the practice of the professions of medicine and surgery in the United States.”

Roosevelt then set his Committee on Economic Security (CES) to work on the issue prior to passing the Social Security Act of 1935.  The CES admitted to “differences of opinion” regarding the “advisability of establishing compulsory health insurance”, which it believed to be “essential.”  The American Medical Association put up strong resistance, characterizing the concept as reeking of communism or socialism.  As a result, Roosevelt did not include healthcare insurance in his Social Security legislation.

During his second administration, Roosevelt convened the Interdepartmental Committee on Health to research national health insurance.  At a National Health Conference in July of 1938, the committee decided that they “must take into account that millions of citizens lack the individual means to pay for adequate medical care.”

Based on the conference’s findings, FDR considered sending a healthcare reform bill to Congress.  Once again, he was forced to back off because of resistance from the medical community; instead, he asked for legislation to encourage state governments to take the lead in initiating healthcare reform.

It’s interesting to note that – 70 years later – the American Medical Association now supports the concept.

Medical Office Buildings a Sound Investment, Despite Recession

Thursday, July 23rd, 2009

In an environment where flat is the new up in the world of commercial real estate, medical office buildings are performing better than other properties.  In May, Industry Insights published two papers written by the Houston-based investment firm, Cain Brothers, which stated that this is a good time for health systems to sell real estate assets to raise needed cash.kaiser-_office_interior1-copy

Make no mistake, medical office building values are showing some slippage.  “We’re seeing values go down, but nowhere near what is going on with traditional office buildings,” said Tom Dalcolma, a partner in Street Sotheby’s Medical Realty Advisors.

A Real Capital Analytics study performed in May found that three percent of commercial office buildings were in bankruptcy, foreclosure or some form of distress.  Only one percent of medical office buildings were in similar straits.  Medical office building sales volume fell 20 percent over the past 12 months, compared with 51 percent for other office buildings.  The report concludes:  “Medical office properties have proven to be a safe haven, and this niche has little trouble.”

Interest in medical office buildings is growing because investors recognize that healthcare spending is not being impacted as harshly as the rest of the economy.  As minor medical procedures move from hospitals to offices, the demand for new facilities is increasing.  There were 600 million outpatient visits last year.  And that will only increase as the population swells by 45 million during the next 10 years.