Why Retail's Next Big Opportunity Is Healthcare


Healthcare providers are looking to retail locations and shopping centers to meet demand from consumers for better health care services, convenience, and localized support.
Consumer spending, high operational costs, demographic changes, and an increase in the use of digital health devices are driving providers to transition from centralized offerings such as large hospitals and medical centers to more localized clinics and wellness centers.
The number of medical clinics located in retail spaces has risen exponentially in the past decade, according to JLL.
At the end of 2017, nearly 2,800 medical clinics were located in retail spaces in the U.S., rising dramatically from only 351 in 2007, according to JLL’s Healthcare Group.
The study found that the number of retail health care clinics rose 47% in the past three years, and JLL estimates that retail locations could double by 2022.
“In an environment of continued transformation and uncertainty, health systems are learning from the retail industry about how to view patients as consumers and ensure their remote healthcare clinics are optimally located and provide the right mix of services,” said Richard Taylor, Executive Managing Director and Leader of JLL’s Healthcare Group in a report released earlier this year.
The topic was featured at ICSC International Council of Shopping Centers RECon convention last week, as panelists from Kaiser Permanente, Highmark Healthcare, and developer Steiner & Associates discuss the newly emerging partnership between healthcare and retail.
For healthcare providers that want to provide more convenience to their customers, working with retail developers is a natural advantage, explained ICSC Recon panelist Dana Garcia, Vice President of Corporate Real Estate at Highmark Healthcare.
“Developers have done exhaustive research to know exactly where to put these shopping centers to draw the most people,” Garcia said. “If we’re trying to make our services convenient to our members, why would we try to reinvent that?”
The increased traffic from healthcare centers can lead to a stable tenant mix and serve as a natural extension of a broader wellness-based ecosystem designed for attracting and placing tenants such as fitness operators, health food grocery stores, and yoga studios in retail spaces, according to Yaromir Steiner, Founder and CEO of Steiner & Associates.
Large providers like Kaiser Permanente, which owns nearly 86% of its locations, are also changing their perspectives about the provision of medical care in retail locations.
“While we want to own our assets, for us, it [site selection] must be driven by demand. It’s about knowing where our members reside, which markets we want to grow in, and the kinds of services we want to offer them,” said Terry Wood, Senior Vice President of Real Estate at Kaiser Permanente.
“In the past, we haven’t considered retail much, but it is clear that in order to meet the needs of members, retail needs to come into play,” said Wood, who added that Kaiser’s site considerations beyond consumer demand include parking availability and the ability to maintain the company’s corporate brand.
Subscribe to CRE Magazine
Construction technology, specifically modular building, is also playing an increasing role in making retail spaces attractive to healthcare providers.
“Demographics change every six to seven years,” said Garcia. For this reason, Highmark is looking to build modularly. Certain specialties like pediatrics, cancer care centers, and wellness clinics are well suited for retail spaces and modular building.
“What we are trying to do with those is to make them as modular as possible. Modular involves less investment and enables us to remain dynamic,” she said.
Reduced construction time and costs, safety, minimal interruption, and the availability of rentable space are playing an increasing role in the growth of modular healthcare facilities.
Devices such as wearables will only increase demand for localized services as consumers gain faster access to health data, panelists said.
In the future, patients will undoubtedly reap the most benefits from the convergence of healthcare and retail. Community-based, lower-cost healthcare facilities will engage the population in preventive and wellness-focused care as more patients see physicians before developing acute illnesses that could require expensive treatment.

This Post Has One Comment

  1. Speaking from the perspective of Urgent Care, great article. The UC industry has experienced a growth trend that has matched the popularity of the medical treatment method. However, with changes in the overall health care industry (reimbursables, in particular), the UC industry is set to shift. Look for a smaller footprint in the retail location that is supplemented by tele-medicine and remote centers.

Leave a Reply

Close Menu
×
×

Cart