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F or most organizations, even contemplating the idea of building a new stateof-the-art hospital from scratch is daunting. One of the keys to capitalizing on such an opportunity is to have a clear vision and an understanding of the process required to go from concept to occupancy. Impeccable project management skills are also critical. The transformation of today’s hospital means rethinking everything, from the design of the facility to the language used to communicate the culture of the organization. Most hospitals are simply not organized or prepared to deal with such a reinvention. Many people focus on the development of the physical facility, as it is the tangible outcome of the process. In reality, the creation of the new facility’s corporate culture, operating processes, and organizational structure is the complex component in such an undertaking.

To manage their real estate portfolios effectively and obtain funding for strategic development, IDSs should consider adopting off-balance-sheet financing strategies, such as sale-and-leaseback transactions, synthetic leases, and joint-venture arrangements. Under these approaches, real estate assets are moved off of the organization's balance sheet via a partial or complete transfer of ownership to a third-party entity. The organization typically retains a satisfactory degree of control over the assets as lessee in sale-and-leaseback and synthetic-lease arrangements, or limited or minority partner in a joint venture, while freeing up cash to use for other strategic purposes.

As IDSs expand their healthcare delivery networks, they acquire an increasingly diverse array of real estate assets. Managing these assets effectively requires a comprehensive real estate strategy. To develop such a strategy, the IDS should form a strategic real estate planning team. The team's role should be to conduct market research; assess the strategic value of the IDS's real estate portfolio; recommend strategies for disposing of unnecessary, underperforming, or mis-aligned assets; evaluate new real estate acquisitions or development projects that may be required to achieve the organization's mission and/or protect market share; and recommend a financing approach that fits the real estate strategy.