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How Retail Drives Healthcare

Do healthcare providers need to take a page from the retailer’s playbook? (Sell surgery in bulk and put the bathrooms in the back?) Trammell Crow SVP Cheri Clarke Doyle thinks so. It’s the best way to keep up with consumers who are turning healthcare into a shopping experience.

Newly settled in Philly (and snapped here with her daughters... she's in the middle), Cheri—who'll be speaking at our third annual Philadelphia Healthcare Summit on April 16—oversees Trammell Crow’s healthcare investments across the Northeast. She tells us that hospitals are seeking to manage their population by filling the gaps in their ambulatory network by providing more outpatient services to reach patients.

And some health systems are even turning into shopping centers: Supermarkets like Pathmark and other big box stores can convert into outpatient facilities because of their size and open floor plan, Cheri says. (Plus you don't need wheelchairs... you can just get in a shopping cart.) And being in a high-traffic retail area grabs the attention of patients who are becoming more consumer driven in their healthcare decisions, as high-deductible plans become more common among the insured.

Cheri also sees the rise of bundled payments driving outpatient development and cutting costs. (It’s a single payment that covers the whole episode of a patient’s care in place of separate payments for each service.) Thus, “hospital systems can effectively move patients to outpatient alternatives, which cost less to provide care than inpatient,” she says. New Jersey has been an early adopter in bundled payment plans, and it’s doing well for Trammell Crow’s Medical Arts Pavilion at the University Medical Center of Princeton (above). Completed in 2012, the 147k SF building is fully integrated with the hospital and is equipped with ambulatory and surgical care facilities.

While we're on the subject of healthcare expansion, University City Science Center recently nabbed a lease expansion from The University of Pennsylvania Health System, which is growing its presence by two floors in 3737 Market (pictured) to occupy 212k SF, totaling eight floors of the new 11-story building. Wexford Science & Technology, a subsidiary of BioMed Realty, is the lessor in the transaction; other tenants will include Good Shepherd Penn Partners (29k SF) and ground-floor shops and restaurants. (To learn about other trends driving this hot sector, register for our event.)