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SCT

Health & Wellness at RECon: Hospital operator leverages its real estate to deploy retail

May 22, 2019

The decentralization of health care that is taking delivery to patients, versus making them seek care from a traditional hospital hub-and-spoke model, dominated many RECon discussions of the growing synergies between shopping centers and health care users.

Northwestern Memorial HealthCare, however, is employing an additional strategy: While it does indeed operate small clinics in retail settings, the system, which operates several hospitals and medical offices in the Chicago area, has also brought retailers to its facilities.

The goal: a broader vision that creates a hotel-like experience for patients and which better connects with the surrounding community, said Gina Weldy, a senior vice president at Northwestern Memorial. The paying tenants also contribute to the nonprofit’s financial goals in a changing and challenging reimbursement environment. “The reality is that health care is a difficult business,” said Weldy, who spoke about Northwestern Memorial’s retail experience at the Health & Wellness Center on Tuesday. “We continue to see the cost structure move toward Medicare pricing, so we have to find ways to bring the operating cost of our buildings down.”

Since incorporating some three-dozen name-brand retailers into its facilities about seven years ago, the health care system has seen retail sales more than triple, to upwards of $3 million. Northwestern Memorial has focused primarily on food-and-beverage tenants, but it has layered in services as well, she said. The most-aggressive of these efforts is at the 900,000-square-foot Northwestern Memorial Hospital campus, a block off Michigan Avenue. 

Gina Weldy, at RECon

Not only did the hospital cut doors into the campus buildings to create street-level retail, but it also put retailers on the second floor, which serves a high volume of outpatient visitors, Weldy said. Retailers on both levels have been wildly successful, she added, by serving the neighborhood, the system’s employees and the patients' visitors, who do not necessarily want to leave once they are inside the hospital’s buildings.

Among other benefits, adding retail to the facilities allows the system to better utilize unused or underused space. It also helps families with disrupted lives feel more normalized, by giving them access to services they use everyday, and it further establishes guideposts in byzantine hospital hallways so people can find their way around, Weldy added. 

“By nature, we have a unique retail opportunity,” she said. “I think we’ve learned how to leverage that.”

By Joe Gose

Contributor, Shopping Centers Today

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