The "retailization" of healthcare has caught traction in both the healthcare and real estate industries.
In a Sept. 4 article in The National Law Review, healthcare real estate attorney Andy Dow writes that the term "describes the evolution of the delivery of healthcare from a physician-centric model to a more consumer friendly, patient-centric model," mirroring the way that consumers interact with retail services and goods.
This has been led by two trends. Healthcare in general has been shifting away from a physician-centered model to a patient-centered one that prioritizes accessibility and convenience for patients. This has resulted in more healthcare facilities being located in real estate that would traditionally provide a convenient location for retailers.
At the same time, retailers that would traditionally be located in brick-and-mortar shopping centers have been migrating increasingly online, Mr. Dow writes. This has resulted in more vacancies that retail landlords have rushed to address, making healthcare an attractive option for those looking to fill otherwise potentially empty spaces. With speed-to-market being critical and the demand for healthcare high, some retail landlords are looking past issues that once made healthcare facilities undesirable retail space tenants.
Mr. Dow characterizes this as a "marriage of convenience," as opposed to "real synergy," adding that large health systems often become tenants in these empty retail spaces, as they add "much better credit" to a potential lease than a smaller physician group. Over 58% of health care systems are corporate-owned and 77% of physicians work in employed settings, meaning that health systems could stand to gain the most in the retailizaton of healthcare.