When I was a child, we sometimes went to a shopping mall to buy clothing. Malls are suffering these days, as more people prefer to order their purchases online. Their demise was predicted about 50 years ago by an academic whose name I have long since forgotten. We were told about his prediction in an MBA class, referring to malls as “dinosaurs by the freeway.” Unlike goods, services cannot be outsourced to Amazon. Is there a future for shopping malls? Indeed, some people have even suggested repurposing struggling shopping malls into retail space for medical services.
A Texas A&M professor, along with several colleagues, wrote about converting struggling malls into medical malls.
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.
Whenever I read about medical malls it has always been hospitals taking advantage of cheap rental space. I have no interest in hospital malls. A few years ago, I wrote about why hospitals are nothing like big box stores. Their goal is not to leverage buying power to give their customers a good deal – all conveniently under one roof. Hospitals consume more than one third of health expenditures. The sickest 5% of Americans consume about 50% of health care dollars. Much of this spending takes place in hospitals or on hospital campuses. About 80% of health care spending in on the sickest 20% of Americans. Hospitals’ target market is mostly maximizing revenue from the sickest 10% of Americans, not providing competitive services to the healthier 90%. Serving Medicare and Medicaid patients helps cover the overhead, but their business model is primarily gouging employee health plans and private health insurance plans.
While hospitals are the most logical entity to take over mall space and create health malls, they are ill-equipped to create competitive retail services. Years ago I heard Charles Khan, CEO of the Federation of American Hospitals, speak at a conference. When asked why hospitals do not disclose their prices he told the audience that hospitals are a wholesale business, not a retail business. Basically, patients are retail consumers, whereas their health plans are the retailer reselling services from the wholesaler.
What I envision for a health care mall is a hub of providers offering price transparency and bundled prices for those paying in cash. There are some potential advantages for patients. This is a quote from Harvard Business Review:
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.
If only it were that easy. Imagine a medical mall with numerous tenants, all competing for my business with price transparency and reasonable cash prices. It sounds too good to be true. Another concept I have read about is Healthcare Centers. See Why Healthcare Centers Are the Good Solution?
Healthcare centers serve as a critical component of the medical landscape, presenting a versatile and oftentimes more accessible option for patients. Unlike large hospitals, these centers typically offer a variety of outpatient services that cater to a range of medical needs, from routine check-ups to urgent care treatments. Their emphasis on community health and preventative care not only helps individuals manage acute health issues but also supports ongoing wellness, effectively bridging the gap between emergency hospital services and regular physician visits.
The above paragraph is a lot of happy talk about preventive care. Not discussed in the article singing the praises of Healthcare Centers is whether they only cater to insured patients or compete for cash paying customers. If they do not compete for patients on the basis of price they might as well be just another 5-story glass atrium in the Big Hospital downtown.
I would love to see a medical complex like a shopping mall or even a strip center where competing firms treat patients like customers, rather than patients’ health plan like their customer and their patients like an inconvenience. I would love to see package prices listed online rather than piecemeal list prices identified by disaggregated billing codes. I recently wrote about medical coworking clinics, where doctors rent exam rooms by the hour, day or month. There is one near my home in a medical strip center. What I have yet to discover is what these doctors are doing to encourage me to seek care there. Offer me a menu of options with the prices next to the service and I will be in your waiting room more often. I suspect I would have plenty of company.