What do shopping centers have to do with hospitals? As care evolves, maybe more than you think

Healthcare reform, an aging population and changes to reimbursement aren’t just affecting how healthcare is delivered, but where it’s delivered. And it’s why we might be seeing more healthcare facilities scoping out space in our shopping centers and office complexes.

Medical facilities are evolving alongside technology and treatment models, according to Jason Tolliver, an attorney and research director of the Indianapolis office of commercial real estate firm Cassidy Turley.

To address the needs of the baby boomer generation, hospitals are extending their geographical presence by using satellite offices to increase their footprints in certain communities, he said. At the same time, other forces are at play: The aging population is increasing hospitals’ capacity needs, changes to Medicare reimbursement are increasing the need for cost efficiency, M&A activity is increasing competition, and advancing technology is enabling more outpatient care.

All of those things are leading some health providers to move their ancillary services, like claims and supply services, and other support services off campus to affordable but nontraditional places.

“Instead of just saying, we’re expanding, let’s build it; it’s been cheaper for some providers to find some office space or retail space,” Tolliver said.

The Mayo Clinic is the most prominent example of this trend, as it announced in 2009 that it would anchor a $200 million expansion of the Mall of America. In Indianapolis, IU Health last year canceled a $73 million administrative building project and instead purchased the Gateway Plaza downtown. And several office building landlords in Connecticut even took a leap by converting their buildings into medical office buildings to attract tenants.

Retail landlords left with vacancies postrecession are willing to accept these nontraditional medical tenants, Tolliver said.

“What we’ve seen in Indy after the recession has been, along these strip centers, some dentists and optometrists, walk-in clinics and even some rehab facilities,” he said. “Things you don’t absolutely need on campus.”

These spots can be easier to travel to and navigate for patients, and good exposure for healthcare providers. Tolliver said he anticipates seeing more of this as care continues to change.

For more on this trend, visit Tolliver’s recent blog posts.

[Photo from Flickr user markyeg]

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