BSA Lifestructures

Retail expectations: Is health care following suit?

Vicki Mettlach, RN, EDAC and Kate Allen, PEFebruary 10, 2020

Amazon, Apple and Google continue to address consumers’ expectations by offering unparalleled convenience and quick product and service delivery. They also drove a shift in the retail marketplace from brick-and-mortar storefronts to websites that anticipate your purchases, apps that allow purchases through your mobile device and next-day delivery. In this way, the retail industry has subsequently responded to consumer expectations for convenience, experience and flexibility. The question we propose: Is health care following suit?

Recognizing that patients have choices for how and where they want to receive health care services, the health care industry can anticipate changes to provider/patient relationships, how patients expect to receive care and altering the way health care systems view real estate and development. Such real estate impacts include:

  • Hospitals increasingly will look to expand within the communities they already serve, developing specialty services in niche markets.
  • Health care organizations and providers likely will look to acquire smaller parcels of real estate in high traffic areas to continue to offer flexible ambulatory care platforms.
  • The health care industry will become a more frequent tenant for repurposing retail spaces.
  • Developers will play a bigger role in driving health care development, looking to anticipate opportunities and initiating projects rather than simply waiting to respond to requests from organizations.
  • As health systems integrate, rural facilities likely will continue to see a wave of mergers and acquisitions, affecting the use and construction of space.

Consider the three top retail trends and how health care is responding to similar consumer expectations.

Convenience. Whether it is products or services, today’s consumers want it fast, easy and delivered directly to them. Retail giants have responded. Amazon Prime’s one-day shipping and direct-to-consumers product offerings are becoming the industry norm.

Fifteen percent of online consumers signed up for subscription e-commerce and autoship memberships in 2017, according to a Forbes Magazine article on trends redefining retail in 2019.

Is this ease of access environment a patient demand for health care delivery as well?

Changing health care vernacular from “patients” to “consumers” indicates that it is. Health care consumers expect quick access and fast results. This is being addressed through smartphone medical applications that can measure vital signs, send medical alerts and perform EKGs, and are now available on most mobile operating systems. Apple and Google brought on medical experts to enhance their health care reach. The recent announcement of Google’s plan to acquire Fitbit indicates an interest in the growth of healthcare-related wearable devices. Filling the need for primary care, convenience clinics located within retail centers are extending hours and offering more services to provide easy access in high-traffic centers. And mobile urgent care platforms that come to your home are experiencing significant growth, as evidenced by DispatchHealth, a national mobile health prototype, that has reached $33 million in capital financing, according to DispatchHealth.

As health care embraces the expectations for convenient care, we’re seeing growth in innovations that will put more care at patients’ fingertips and front doors, and more services in the places they go every day.

  • Telemedicine. Physicians and patients are becoming increasingly comfortable with phone or video chat connections when face-to-face/hands-on visits are not essential.
  • Micro hospitals. Smaller, low-frills hospitals, typically in suburban and urban areas, offer convenient, accessible care as alternatives to large-scale hospitals.
  • Multipurpose ambulatory clinics. These “one-stop-shops” provide an alternative to the single-discipline clinics, delivering higher-level care and treatment for multiple needs.
  • Health care visits to patient’s home. For a fee, clinics will send a health care provider to your home for both routine and urgent needs.
  • Increased convenience in retail outlet clinics. Trends suggest clinics we’ve come to expect in pharmacies and other retail outlets will expand service times and services.
  • There’s an app for that. Routine preventative medical care and medical alerts can now be provided through applications on smartphones and other devices, eliminating the need for physician intervention and office visits.

Enhanced experience. The retail industry has recognized that current consumers focus less on the product being sold than the experience being offered. Retailers have responded with mobile apps and virtual reality applications that enhance the shopping experience. Marketers have recognized that the next generation of consumers, who are moving from discretionary spending to necessity spending, are more willing to pay for experiences than products.

Health care has adapted to this trend as well. Health care facilities are integrating technology and design elements into the delivery model to provide unique experiences in addition to core health care services. Art tours along the hospital walls, on-site fine dining venues, activities such as gyms and parks within the health care campus are all intended to provide the consumer with a multifaceted health care experience.

Flexibility and integration. Singlepoint bricks and mortar stores are closing at ever increasingly high rates. According to Forbes, approximately 3,800 more stores will close by 2020. In turn, the retail reach has extended to social media, niche markets, specialty shops, pop-ups and markets within markets, such as The Market at Macy’s. These shops are part of a broad integrated strategy that allows for quick changes to products and service lines at a lower cost to the company.

Health care systems are responding similarly by expanding to niche markets in their communities often through developer-driven partnerships in outpatient settings. Health care research and consulting firm The Advisory Board notes that roughly 59% of surgeries were performed in hospitals in 2005, with the remainder being performed in ambulatory surgical centers. By 2020, it is expected that those numbers will have flipped. Similarly, Healthcare Finance magazine reported that from 2008 to 2015, emergency room visits for low-acuity conditions dropped by 36%, while urgent care centers experienced a 119% increase in visits.

By partnering with developers for community-based multi-mix MOBs, health care is benefiting from lower-cost ambulatory settings, the ability to quickly flex services, and capitalizing on high-traffic areas and improved visibility. Without the long-term commitment of owned space and the large capital outlay that accompanies it, health care systems can provide targeted market services within their communities and can change service lines as population health shifts occur.

Conclusion. Do these trends signal the end to traditional brick and mortar health care settings? Not likely. We will always need acute hospitals and face-to-face provider interaction but shifting health care delivery platforms will continue to impact the real estate landscape. As David Martin, CCIM, senior vice president-development MBRE explains, “The opportunity for health care delivery innovations has never been greater. Given consumer expectations and technology advances, an abundance of remarkable new health care environments is just on the horizon.”

Today’s designers and architects must ensure the built environment supports these trends in the most efficient and cost-effective manner as possible.

 

*This article was originally published in the Colorado Real Estate Journal