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At Medical Malls, Shoppers Are Patients

December 29, 1995

Can chest X-rays and cholesterol tests be sold like polo shirts and lingerie?

The developers of medical malls think so. They think they can attract patients and managed-care contracts with one-stop shopping for medical services, such as radiology, cardiac checks or out-patient surgery. The malls have soothing environments dressed up with fountains, food courts and other amenities found in the retail world.

Now found in California, Florida and a handful of other states, medical malls reflect the health-care industry’s effort to keep patients out of hospitals. The malls have lower overhead than traditional hospitals because they don’t have emergency rooms, neonatal-care units or other services that require a lot of staff and expensive equipment. Instead, they concentrate on primary care, diagnostic services and outpatient surgery and therapy.

The malls’ builders expect doctors and patients to like the convenience and cheapness of getting tests, meeting doctors and having the procedure done and recuperating in the same place. Medical offices, an outpatient diagnostic and surgery center and a 120-bed nursing home and recovery center are all included in a $90 million medical mall that Boston-based Continuum Care Corp., a provider of health-care services, is building in West Palm Beach, Fla.

Meanwhile, Medi-Cen Inc., a doctor-owned medical alliance based in Chevy Chase, Md., is spending $7.5 million to turn a medical office building into a mall that will offer a variety of services under one management. ``You will have everything short of hospitalization within that one location,″ says neurologist Steven Macedo, who started the company two years ago and plans several more malls. ``And you get one bill at the end of the month for all of the work done,″ he adds.

With medical malls, health-care providers are hoping to seem friendlier to consumers, who are making more decisions about where they obtain care, says J.D. Kleinke, senior director of HCIA Inc., a Baltimore health-care data-analysis and research concern. Managed-care providers and insurers may not be pushing for such developments, he adds, ``but if it adds value to the product that they can offer to people, they are happy.″

Some critics see such projects as little more than a fancy marketing effort and wonder how expensive construction and renovations will cut costs. ``I don’t see the great advantage over the traditional medical arts building, other than it was a big ugly box that scared the pants off of you,″ says medical economist Uwe Reinhardt of Princeton University.

Nonetheless, the concept is catching on even with some traditional hospitals, which are opening vast medical malls nearby. The new $34 million Medical Mall at St. Joseph Health Center, Kansas City, Mo., opened late last year and is connected to the old St. Joseph hospital. A well-marked parking area for both medical centers has a shuttle bus to ferry patients to the mall, a low-slung, red-brick structure with a soaring, gabled entrance.

Visitors enter an airy, four-story atrium with escalators, gurgling fountains and a player piano. Along with a bank, a gift shop and a dry cleaner, the tenants of the 220,000-square-foot facility include restaurants like Grille Works and Gretel’s Bake Shop.

When he visited the mall recently, mortgage-banking executive John Thellman was surprised at how different it was from the traditional hospital or medical office building. ``It’s more wide-open, well-lit and less sterile, and it didn’t have the medical smells,″ he says.

The mall offers rehabilitation therapy, a pulmonary clinic, radiology services and a host of outpatient surgeries. To make things quick and simple, a patient-care assistant escorts each patient through the admission procedure. Afterward, patients go to a single ``clinical room″ for almost all of their preoperation testing and later they recover in a small private room.

``The idea was to come up with a better way of providing outpatient care in a seamless fashion,″ says Gordon Docking, the mall’s administrator.

Since the mall opened, radiology visits to the St. Joseph campus have increased by 9 percent, while the number of ultrasound procedures has soared by 45 percent. Meanwhile, the mall has attracted nearly 100 new referring physicians to St. Joseph.

Other hospitals and health-care systems see the medical mall as a relatively inexpensive way of extending their networks into fast-growing suburbs. Sutter Health, a regional hospital system based in Sacramento, Calif., is developing three suburban medical malls, including a hotellike Santa Cruz, Calif., center that will specialize in short-stay, in-patient surgeries. Greg Rusnak, the facilities’ administrator, notes, ``If you are not out there and available, you are not going to be able to contract with the (managed-care) payers.″

Even nonprofit hospitals see the malls as a good way to increase services to communities. In Jackson, Miss., a group of nonprofit hospitals and clinics have joined forces to form the Jackson Medical Mall Foundation, which recently raised $2.7 million to buy an 860,000-square-foot former retail outlet.

The foundation’s plans include day-care centers for sick children and senior citizens, along with a vast clinic for residents of the low-income neighborhood that surrounds the mall. Says A. Wallace Conerly, a University of Mississippi Medical Center executive who helped to organize the project: ``This will allow us to do things that we have never had the room to do.″

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