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August 6, 2019

Why are doctors setting up shop in the mall? It's 'a symbiotic relationship.'

Daily Briefing

    One of America's most popular malls will soon house a 2,300-square-foot walk-in clinic.

    About the new clinic

    Mall of America, located in Bloomington, Minnesota, attracts an estimated 40 million visitors each year, and in November, Fairview Health is partnering with the University of Minnesota and University of Minnesota Physicians to open a new M Health Fairview retail health clinic in the mall.

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    Laura Reed, COO and Chief Nursing Executive at Fairview, in a release said, "This new clinic brings high quality health care much closer to people, whether they are shopping, traveling, or working at or near the Mall of America."

    The clinic, which will be open seven days a week, will have five medical exam rooms, a radiology room, lab space, and a pharmacy dispensary service, according to the release. The clinic will be equipped to treat minor illnesses and injuries, as well as provide routine exams, like physicals for school, sports, and summer camp; consultations for international travelers; and vaccinations. According to a release, a key patient group for the clinic will be travelers staying in nearby hotels who require treatment for travel-related illnesses.

    What's in it for mall owners?

    The new clinic is not the first to open in Mall of America, according to the Star Tribune, and across the country, more health care facilities are moving into retail spaces.

    Mall leases for clothing retailers have fallen more than 10% since 2017, while mall leases for medical clinics have grown nearly 60%, according to CNN.

    Part of the reason for the growth in health care tenants, CNN reports, is the size of the health care industry. Health care makes up $3.5 trillion in annual spending in the United States, and mall owners are eager to get into that market.

    Mall landlords suspect patients might stop into a clinic for quick service, such as a flu shot, and then stay at the mall to shop elsewhere. In addition, a fully staffed clinic adds a new base of customers to shop and eat at other mall storefronts, according to a May research report by real estate firm JLL. Further, health care provider tenants tend to have better credit rates and sign longer leases than other types of tenants, according to CNN.

    'A nice, symbiotic relationship'

    For provider and insurers, the mall is a convenient location to provide outpatient or preventive care, CNN reports. Clinics focused on these services are becoming more appealing as providers seek to avert costly ED visits.

    While mall clinics now are focused on routine exams and treatment of minor illnesses, JLL analysts predict malls will expand to primary care, specialty care, and chronic disease management. 

    Todd Caruso, senior managing director at real estate firm CBRE, called the alignment of malls and providers, "a nice, symbiotic relationship." He continued, "It fits both the hospital system and the property owner."

    As for Fairview's new clinic, Badrinath Konety, chief clinical officer for M Health Fairview, said the goal is for the clinic to operate more similarly to an urgent care rather than a retail clinic, and will serve as a way to connect patients with the broader health system. "It's a great way for people to connect with us," he said (Olson, Star Tribune, 7/17; Meyersohn/Luhby, CNN, 7/23; Fairview Health release, 7/16).

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