The retail mall, home of department and specialty stores, food courts, health clubs and assorted retailers, is slowly becoming the home of medical practices, according to a white paper released by Cushman & Wakefield, “Healthcare is Heading to the Mall”. The paper outlines shifting trends in healthcare which seem to indicate that we are about to see the opening of more traditional healthcare facilities in retail settings. These facilities promise to be far more extensive than the walk-in and “mini” clinics seen in certain drug and department stores.
The report concludes that changes in the economy, shifts in consumer spending patterns, an aging population, and the rise in e-commerce are all leading to innovative placement of healthcare delivery sites. Malls offer proximity to population centers, access to highways, plenty of parking, and an amenity-rich environment.
A key driver is the shift from hospital-based inpatient care to freestanding outpatient or ambulatory care. As the ability to perform surgical procedures on a same day basis (ambulatory surgery) has expanded, it has significantly reduced the number of patients occupying inpatient beds. Also, many technologies traditionally restricted to hospitals are now cheaper and amenable to delivery through ambulatory settings. Things have evolved to the point where today approximately 80% of all surgery in many specialties can be done with ambulatory care, and that influx is conveniently available where patients live and work, including retail locations.
According to recent studies, the newly insured patients under the Affordable Care Act will lead to a sharp increase in retail health clinics. The consulting firm Accenture projects the number of retail health clinics will grow at 25% to 30% annually in the coming years and roughly double in number from 1,400 in 2012 to 2015. New retail-based clinics will increase the capacity for patient visits by 10.8 million per year by 2015. The trend is expected to drive about $800 million in savings, since clinics cost less than other medical venues.
Hospitals and primary care physicians (PCPs) -- groups that have shunned or been slow to accept retail clinics in the past, calling them competitors rather than accomplices -- are warming to the idea of working with such clinics, according to Accenture. One benefit is that PCPs and hospital emergency rooms can refer low-acuity cases to retail clinics.
"Now, the very clinics once perceived as rivals may represent a key tool for managing patient volume while more conventional health providers focus on higher acuity and more complex treatments," the Accenture report stated.
New York Developments
In 2011, Forest City Ratner Companies opened Westchester’s Ridge Hill, a 1.3 million square foot regional lifestyle center accessible from several major highways. Ridge Hill is home to WESTMED Medical Group’s multi-specialty medical office, which is staffed by a team of over 60 physicians.
In the South Fork of Long Island, Charles Mancini Park Ridge Development is developing a 25,000 square foot health care facility, which will include Peconic Bay Medical Health System’s “Gertrude and Louis Feil Campus for Ambulatory and Preventive Care”. The initial medical facilities are expected to open this summer, and will include a walk-in Urgent Care Center and practices specializing in Family Care, Pediatrics and Ob/GYN. An additional building in the complex will include an advanced technology office space for urology services, a digestive disease center, and a general surgery practice. When the entire facility is open in three years, it expects to see about 30,000 patients a year.
New Jersey Developments
The retail healthcare trend continues to grow in New Jersey. Hackensack University Medical Center and the New York Giants have announced plans to team up with Fitness and Wellness of Hackensack, LLC to open a premier, full-service fitness and wellness center located at 137 Route 17 North in Maywood. The 112,000 square foot facility, scheduled to open at the end of 2013, will be the first in the area to merge fitness, wellness, and sports performance training. The center will also house the Debra Simon Center for Integrative Medicine, a comprehensive wellness pavilion that will offer programs for specific health concerns such as heart disease, arthritis, senior health issues, stress management, obesity and much more.
Retail giant Target has recently made a big push in the area with its Target Clinic, which offers services for minor illnesses and injuries. Target Clinics are currently located in Florida, Illinois, Maryland, Minnesota, North Carolina and Virginia.
In addition to pharmacy and optical services, Wal-Mart has introduced “The Clinic at Wal-Mart”, an independently owned and operated in-store clinic that offers walk-in service seven days a week. The clinics are currently located in twenty states including Pennsylvania and Illinois.
Perhaps the leader in retail health clinics is Walgreens, which offers acute and preventive care through “Take Care Clinics”. These clinics are staffed by board certified family nurse practitioners and physician assistants in over 350 locations across the country. In the metropolitan area, through its Duane Reade subsidiary, physician staffed walk-in medical care is currently available in 13 locations which have affiliation with Continuum Health Partners Hospitals of Roosevelt Hospital, Beth Israel and St. Luke’s Hospital.
Opportunities for Owners/Developers
With the growth of day surgery, shorter stays at hospitals and increased utilization of medical/dental services, owners of commercial real estate have a greater pool of potential tenants. In certain instances, locations which are not considered prime for traditional retailing can be leased increasing the return on investment of real estate owners and, in turn, increasing the value of the property. Already the resurgence of walk-in medical centers in drug stores and pharmacies has allowed retailers to increase their lease revenue and has attracted new customers. The influx of patients seeking medical care into traditional retail settings is always a plus for retailers, as it increases foot traffic. Expect to see more and more developers and owners seeking out healthcare providers to join the roster of tenants.