January 3, 2022

What providers can learn from 'medical malls,' according to HBR

Daily Briefing

    Writing for the Harvard Business Review, Leonard Berry, Kedar Mate, and Sunjay Letchuman explore the benefits of converting struggling retail shopping malls into a new type of mall with much greater potential—a medical mall.

    Berry is a professor at Texas A&M University's Mays Business School and a senior fellow at the Institute for Healthcare Improvement. Mate is president and CEO of the Institute for Healthcare Improvement and a faculty member at Weill Cornell Medical College. Letchuman is currently an honors student at Texas A&M University—he will enter the MD program at the Icahn School of Medicine at Mount Sinai in 2022.

    5 key takeaways from Advisory Board's site-of-care shift summit

    What is a medical mall?

    According to the authors, "[t]he most common definition of a medical mall is one that includes at least five health care tenants or units." Medical malls can be established inside of converted shopping malls as either full medical centers or a combination of leased spaces offering outpatient health care services alongside leased retail spaces.

    Based on this definition, there are around 30 medical malls in the United States—and over 75% of them consist of mixed health care and retail facilities.

    More efficient—and flexible—health care

    In recent years, Covid-19 has accelerated the shift away from in-hospital care. According to the authors, several trends are responsible for fostering this movement, including:

    • The rapid expansion of telehealth
    • An increase in ambulatory day-surgery centers
    • A substantial increase in the number of urgent care facilities
    • New technologies that make it possible to perform diagnostic procedures outside of a hospital
    • The growth of "Hospital at Home" programs

    While hospitals are still necessary for acute care that requires in-patient monitoring, specialized care, and certain equipment, the authors theorize that, "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."

    The authors suggest medical malls could offer "anchor services" like "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."

    One example of this model is Vanderbilt Health, at One Hundred Oaks Mall in Nashville, Tenn.—an 880,000 square foot medical mall where outpatient health services make up half of the space. The combination of primary and specialty care options creates an "all under one roof" care experience for patients. The health system also has several offsite clinics that work with the medical mall and offer telehealth options and free shuttle rides to and from the Monroe Carell Jr. Children's Hospital and Vanderbilt Medical Center East.

    According to the authors, medical malls can allow hospitals and other providers to reduce variable costs, and can help lower hospitals' fixed costs by reducing dependency on "inflexible infrastructure."

    As hospital systems reevaluate and redesign their care and business models, the authors recommend considering medical malls.

    More equitable access to care

    According to NRC Health's 2019 Healthcare Consumer Trends Report, 51% of patients say that the most important factor in deciding where they receive health care services is convenient access to care. The pandemic has underscored the need for accessible and affordable preventive and primary care services—especially for underserved populations.

    Ultimately, the authors believe "[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." (Berry et al., Harvard Business Review, 11/16)

    Have a Question?

    x

    Ask our experts a question on any topic in health care by visiting our member portal, AskAdvisory.