It used to be “location, location, location.” But as the economy moves deeper into the IT age, commercial real estate – at least in certain sectors – is likely to become more about “information, information, information.” Take health care. Beginning in 2014, the Patient Protection and Affordable Care Act is expected to expand health insurance coverage to some 32 million Americans, with about 16 million getting public coverage through Medicaid, and the rest through federal subsidies to buy private insurance.
But once they have insurance, where will millions of newly insured people find access to health care? Its a good question, because the U.S. is already in the midst of a primary care physician shortage as declining reimbursements for primary care and an aging Baby Boomer population squeeze existing physician supply.
The market has one answer to this problem – using less expensive (but still highly trained) nurse practitioners to provide basic health care services in retail stores likeWalgreens, CVS, Target and grocery stores (The Little Clinic). Smaller, independent stand-alone retail clinics (like RediClinic) along with urgent care centers (a midpoint between a doctors office and an ER) also expand health care options for consumers who cant get a timely appointment in a physicians office or dont want to stew for hours in a hospital emergency room waiting for routine care.
Where does the commercial real estate agent come into the equation? The retail clinic industry is a relatively young one, and operators are still finetuning their store location strategy. The clinics need substantial foot traffic to become and remain profitable, especially outside the peak winter cold season.
This means understanding the local market: How many doctors are available in the area? Are patients having trouble accessing care because of a physician shortage, or swamped local ER rooms? Is there a relatively affluent, insured population available (the target demographic for retail clinics)? If there is, whats the best retail location for capturing at least some of that “spillover” demand?
The Little Clinic President Lisa Loscalzo said, “Site selection involves a complex analysis of the regulatory and health insurance environment, demographics, medical provider access, buying patterns and host store sales and customer volumes.” With 115 – 250 sq. ft clinics in grocery stores in ten states, their success has come by understanding behaviors and selecting locations that enable 7-day-a-week/evenings and weekend operation – and nuances such as parking availability. “Commercial real estate practitioners can provide value by evaluating leasing strategies and rates because fair market value rental rates are critical for regulatory compliance,” Loscalzo added.
While large clinic chains are apt to be sophisticated about clinic location (and establish the clinics in their own stores), smaller operators or physician- owned retail or urgent care clinics are apt to be less business savvy and need the help of an insider who can help them understand the needs and opportunities available in local commercial markets. Health care reform also makes billions of dollars available for expanding Federally Qualified Health Clinics (FQHCs). FQHCs will probably look at expanding satellite locations into retail locations (in places like grocery stores or leasing dedicated space in malls) to reach low-income populations that benefit from the FQHCs sliding-scale fee structure. FQHCs may also benefit from the retail expertise available from practitioners.
REALTORS® who want to work in the growing retail clinic market (some analysts expect the retail clinic market to triple over the next several years) are going to have to do their homework and understand how state regulations may affect the ability of retail clinics to operate in specific markets. In some heavily regulated states (like NewYork), a number of barriers make it harder for for-profit corporations to enter the retail clinic market (a very strict state prohibition on the corporate practice of medicine prevents companies from employing medical professionals).
To date, the only clinics operating in New York today are smaller, physician- owned clinics that operate out of a small number of Duane Reade and CVS stores. Other states, with lower regulatory hurdles, are likely to be much more attractive candidates for clinic expansion. None the less, the number of potential partners (smaller operators, physicians groups, FQHCs) may offer commercial brokers a number of different business opportunities.
Demand for retail clinics – and other community based health care services - is likely to increase over the next several years, thanks to health care reform, a growing physician shortage, and demand from aging baby boomers for more accessible heath care services. Retail clinics represent a way for consumers to access high quality, affordable health care options – provided regulators and policymakers recognize the value of the model and eliminate or streamline regulations that inhibit the model from flourishing.
By educating themselves about the model, and its market needs, REALTORS ® can also become a valuable voice in the discussion over how to expand more accessible health care options in local communities where the doctor may not always be in to see you.
Original Source: http://content.commercialsource.com/commconnspring2011-healthcarefacilities.cfm