Healthcare Industry and Healthcare Real Estate Market Opportunity
We believe the U.S. healthcare industry is continuing its rapid pace of growth due to increasing healthcare expenditures, favorable demographic trends, evolving patient preferences and recently enacted government initiatives. Furthermore, we believe these factors are contributing to the increasing need for healthcare providers to enhance the delivery of healthcare by, among other things, integrating real estate solutions that focus on higher quality, more efficient and conveniently located patient care.
U.S. Healthcare Spending Expected to Increase 5.8% per Year over Next Decade According to the United States Department of Health and Human Services, or HHS, healthcare spending was approximately 17.5% of U.S. gross domestic product, or GDP, in 2014. The anticipated continuing increase in demand for healthcare services, together with an increasingly complex and costly regulatory environment, changes in medical technology and reductions in government reimbursements are expected to pressure capital-constrained healthcare providers to find cost effective solutions for their real estate needs. We believe the demand by healthcare providers for healthcare facilities will increase as health spending in the United States continues to increase. As illustrated in the graph below, national healthcare expenditures continue to rise and are projected to grow from an estimated $3.0 trillion in 2014 to $5.4 trillion by 2024 representing an average annual rate of growth of 5.8%, reaching a projected 19.6% of GDP in 2024.