The healthcare sector is experiencing its most significant policy-driven transformation since the passage of the Affordable Care Act. A confluence of federal funding shifts, coverage losses and operational pressures is creating what industry experts describe as a "perfect storm" that will fundamentally reshape healthcare real estate demand patterns across the United States. While headlines focus on disruption, forward-thinking organizations are recognizing this moment as a chance to build resilient, strategically positioned portfolios.
Federal funding reallocations—including a $33.3 billion decrease to the U.S. Department of Health and Human Services and a $3.3 billion increase to the medical care given through the U.S. Department of Veterans Affairs—signal clear directional changes that informed leaders can anticipate and position for. To build resilience, leaders should focus on identifying how these shifts create new demand patterns and adapt real estate portfolios accordingly. This isn't a gradual shift that organizations can ease into—the first wave of impact is set to hit in 2026.
Finding Opportunities in Market Disparities
Medicaid expansion states represent a strategic advantage, offering greater stability through crucial safety nets that can buffer against federal policy changes. While some markets face heightened impacts, these may emerge as relative safe havens for investment and expansion.
Two additional areas of opportunity? Urban markets and specialty care facilities. Urban markets present compelling opportunities as financially stressed healthcare systems optimize portfolios. Specialty care facilities demonstrate less exposure to policy changes, as they typically serve a more commercially insured patient base and face fewer direct government reimbursement pressures. These facilities offer more stable cash flow and genuine growth potential.
While insurance coverage remains the primary gatekeeper to healthcare access, our research reveals striking geographic disparities that make convenience and proximity even more critical for patient outcomes.
Modern healthcare real estate evaluation requires analysis beyond location and physical characteristics. Healthcare leaders should examine tenant financial stability and payer mix diversification. Geographic exposure to policy-resilient markets becomes a critical factor in portfolio construction and risk management.
For healthcare providers, the current environment demands accelerated strategic partnerships and network optimization. Organizations can no longer afford to operate in isolation—collaborative approaches to service delivery and cost management become essential survival strategies.
Competitive Positioning Opportunities
With a 69% increase in plan-provider negotiation disputes between 2022 and 2023, understanding patient flow patterns becomes crucial for positioning properties successfully. As healthcare networks fragment and reform, advanced analytics help identify optimal locations.
As providers compete more intensely for commercially insured patients, strategic location decisions become critical. Properties in markets with higher commercial payer penetration will command premium valuations.
For providers, strategic location decisions can mean the difference between financial sustainability and organizational survival. Healthcare organizations are evaluating real estate footprints with fresh eyes. Rather than viewing consolidation as distress, forward-thinking investors see opportunities to acquire quality assets and help healthcare partners optimize operations.
While 94% of healthcare executives expect equipment upgrade delays, organizations investing strategically in facility improvements will differentiate themselves. This creates opportunities for real estate partners to facilitate improvements through strategic partnerships and value-added services.
Successful navigation requires immediate portfolio assessment combined with strategic repositioning toward expansion states and specialty care opportunities. Organizations emerging strongest will embrace strategic flexibility and make data-driven real estate decisions.
Key strategies include focusing on geographically resilient markets, prioritizing operationally efficient properties and building partnerships with financially stable healthcare systems. Enhanced tenant financial monitoring becomes essential, as does understanding payer mix diversification.
The Path Forward
The healthcare sector's transformation represents a fundamental opportunity to build more resilient, strategically positioned portfolios. By focusing on geographic resilience, operational efficiency and strategic partnerships, healthcare real estate stakeholders can transform policy challenges into competitive advantages.
This environment rewards preparation and strategic thinking. Those who act decisively to align real estate strategies with emerging opportunities will be best positioned to capitalize on market transformation.
The current policy shifts aren't just challenges to navigate—they're catalysts for building stronger, more sustainable healthcare real estate portfolios that serve both investors and communities more effectively.
Cheryl Carron, COO, Work Dynamics Americas/president, Healthcare Division, JLL. Matt Coursen is U.S. healthcare lead, Leasing Advisory, JLL.
A Premier Corporate Partner of ACHE, JLL Healthcare works with clients to develop real estate solutions that keep patient care at the heart of evidence-based business decisions. For more information, visit ache.org/JLL.