Why Health Care Systems Should Invest in Medical Malls

Medical malls, a new type of care delivery location is gaining traction. They can be a pure medical center or a mix of health care services and leased retail space. There are about 30 in the United States. They have the potential to enable hospital-based systems to deliver care more effectively, efficiently, and flexibly and to help address health care inequities and constantly evolving public health needs while promoting local economic development.

Retail shopping malls, which were already in trouble before the pandemic, have become even less viable during it. But there’s another type of mall — one that had gained some traction before the pandemic — that now has even greater potential: the medical mall.

A medical mall, which can be installed in a converted shopping mall, may be a pure medical center or a mix of health care services and leased retail space. The most common definition of a medical mall is one that includes at least five health care tenants or units; by that definition, there are roughly 30 in the United States — more than three-quarters of them mixed health care and retail venues.

Medical malls have the potential to enable hospital-based systems to deliver care more effectively, efficiently, and flexibly and to help address health care inequities and constantly evolving public health needs while promoting local economic development.

More Efficient, Flexible Care Capacity

The shift away from care in hospital buildings (many of which were built decades ago and are costly and difficult to maintain) will accelerate in the wake of the pandemic. Several trends are fostering the movement: the explosive growth in virtual care (telehealth); the rise of ambulatory day-surgery centers, where many traditionally hospital-based surgeries can now be performed; a substantial proliferation of urgent care facilities; new technologies that allow diagnostic procedures (e.g., lab tests and scans) to be performed outside of hospitals; and the growing adoption of Hospital at Home programs, which serve patients with conditions such as chronic obstructive pulmonary disease, pneumonia, and congestive heart failure.

Hospitals are, of course, still needed for acute care that requires specialized skills, equipment, and patient monitoring. But hospitals that prosper five to 10 years from now will be far more strategic, specialized, and nimble than many are today — and some will complement their more expensive, hospital-based services with lower-cost, mall-based services that deliver outpatient care.

For example, a medical mall might offer anchor services such as a large primary care hub practice, a big chain pharmacy, and day surgery and medical imaging centers; certain subspecialty outpatient services such as allergy/immunology, gastroenterology, cardiology, behavioral health, dental care, and optometry; and ancillary services such as laboratory testing, physical rehabilitation, a medical supply store, an easily accessible urgent care clinic, and a community health education center.

Consider Vanderbilt Health, at One Hundred Oaks Mall in Nashville, Tennessee, where outpatient health services make up half of the mall’s 880,000 square feet. The primary and specialty care options allow for an “all under one roof” care experience, and the greater Vanderbilt health system has multiple offsite clinics that work with the medical mall, which offers telehealth options and free shuttles to and from the Monroe Carell Jr. Children’s Hospital and Vanderbilt Medical Center East.

Medical malls can lower hospitals’ fixed costs by reducing dependency on inflexible infrastructure and can allow hospitals and other providers to reduce variable costs through a variety of “shared services” available to all medical mall tenants. Such services might include a centralized IT center to handle technology needs (with a retail component to serve outpatients who use medical devices), a telehealth center equipped with advanced technology paid for on a per-use or membership basis, and a wholesale medical supply and pharmacy minimizing the need for decentralized stockpiling.

As hospital-based systems rethink and redesign their care and business models, medical malls can be part of that evolution. Potential opportunities include but are not limited to:

  • Emphasizing care that is continuous rather than episodic and more coordinated and integrated when mall tenants use the same electronic health record system
  • Positioning the medical mall as a hub of care delivery — with telehealth, in-home care, and the hospital itself as “spokes”
  • Deriving revenue from clinical and nonclinical services beyond the walls of the hospital — and from tenants’ rents, if the mall facility is owned by a hospital or health system
  • Expediting a shift to efficiency-based payment incentives given the service-delivery efficiencies that medical malls can offer
  • Mitigating payers’ increasing resistance to reimbursing the costs of hospital overhead when hospital-level care is unnecessary

A Way to Combat Inequities

Medical malls, with their ample parking and distributed locations, can help provide accessible and affordable preventive and primary care services for underserved populations, whose plight the pandemic has highlighted. According to the 2019 Healthcare Consumer Trends Report by NRC Health, 51% of patients say that convenient access to care is the most important factor in deciding where they receive health care services.

A case in point is the Jackson Medical Mall Thad Cochran Center, in Jackson, Mississippi, whose partners include the University of Mississippi Medical Center. The original Jackson Mall, a massive center in the 1970s, saw business decline in the 1980s. By 1996, much of the mall’s space was converted to offer health care services for underserved Jackson residents. The Jackson Medical Mall Foundation’s stated mission to eliminate health care disparities in the surrounding community has attracted substantial capital through grants, including $1.25 million from the Robert Wood Johnson Foundation to reduce tobacco use among black males in the Mississippi Delta River region and $5 million from the U.S. Department of Agriculture to implement its healthy food program, Double Up Food Bucks, to underserved Mississippians. The Jackson Medical Mall Foundation also sponsors Farm to Fork, a collaboration with local farmers’ markets to improve targeted communities’ access to healthy food.

Medical malls can also be economic engines and sources of jobs, especially in underserved communities. The Mississippi Development Authority designated the Jackson Medical Mall district as an “opportunity zone,” which allows private investors to receive tax benefits from capital gains on long-term investments in the area. Mall tenants employ more than 1,500 full-time-equivalent positions, equating to $25 million in annual payroll, and the Jackson Medical Mall Foundation has invested in building a grocery store that sells fresh foods, a playground, and 30 single-family homes to increase the economic sustainability of the surrounding community.

Pre-pandemic trends, coupled with public health realities that the pandemic has made more apparent, suggest that hospitals will increasingly need to reimagine their future. The innovation of the medical mall is an example of how health care can address some of its most pressing and evolving challenges. A medical mall in increasingly available retail space can serve a local community in a new, more equitable way while re-energizing the business model of a local or regional hospital-based health system. As more medical malls are created, communities and health systems will learn more about what works, what doesn’t, and what as-yet-unforeseen configurations should be tried and tested.


Christin Hakim

Next Post

Why Zillow Couldn’t Make Algorithmic House Pricing Work

Tue Nov 16 , 2021
Zillow’s Zestimate of home values has become a go-to reference for US homeowners. But when Zillow tried to use its algorithm to buy and sell homes, it badly misread the market. The company’s iBuyer (or “instant buyer”) arm, where tech-first firms use algorithms to quickly value, buy, and sell homes, […]

You May Like