The landscape of the healthcare industry is changing. Medical services are moving to retail environments, patient experience is key, there is a growing emphasis on behavioral health, and large health systems are merging.
These were among the topics discussed at MetroWire Media’s KC 2024 Healthcare Summit: Reimagining the Future of Healthcare by panelists Jeremy Bechtold, VP of facilities, construction and real estate at St. Luke’s | BJC Health System; Colin Fitzgerald, director of construction at Children’s Mercy Kansas City; Marty Gilchrist, CCIM, senior associate at Cushman & Wakefield; Shelly Koehler, VP at JE Dunn Construction Company; and Brandon Kuzara, corporate and healthcare account director at Dimensional Innovations. Mary Moore, VP of growth and strategy at Pulse Design Group, moderated.
Above: Jeremy Bechtold, Shelly Koehler and Brandon Kuzara share a laugh during the panel presentation. Photo credit: Arch Photo KC
With the baby boomer population demanding more services and patients preferring healthcare and wellness facilities closer to their homes, more and more healthcare systems and physician groups are offering services in a retail setting, termed “medtail.”
“The fact that these retail centers are strategically placed with abundant parking, high traffic, and great synergy with adjacent tenants -- such as grocery stores where your patients are shopping on a very regular basis -- it just became a convenient and great location for these services to move into,” said Gilchrist.
Gilchrist said approximately 20 percent of health and wellness services now are located in a retail setting, citing a projection by the CoStar Group.
“The surge in medtail is not creating an exodus from the medical office buildings. Those are still strong and we see the trend toward medtail as a great way for there to be added convenience and to fill in with the extra demand that we’re now seeing in the market,” she said.
Over the last 10 years or so, Fitzgerald said Children’s Mercy has moved some of its outpatient services, including physical therapy, multi-specialty clinics and urgent care, out of its high occupancy hospital buildings, which are the most expensive to build and maintain, into retail centers.
Children’s Mercy Northland Clinic operates in a space that was once a grocery store. Children’s Mercy Blue Valley is located in a strip center in a space formerly housing a home theater store.
“So somebody can pick the kids up from school, get their oil changed, and get their flu shot all in the same shopping center,” Fitzgerald said.
It was a packed house at last week's sold-out MWM KC 2024 Healthcare Summit: Reimagining the Future of Healthcare, held at Pulse Design Group. Thank you to our Platinum Sponsors: Pulse Design Group and JE Dunn Construction; Gold Sponsors: Arch Photo KC and Ryan Companies; Bronze Sponsors: BHC and Fry Wagner Commercial Services; and Brew Crew Sponsors: Monarch Build, Dimensional Innovations, Mercer Zimmerman, Bartlett & West and Brinkmann Constructors. Photo credit: Jacia Phillips | Arch Photo KC
Bechtold said St. Luke’s | BJC has convenience clinics in Price Chopper and Hy-Vee stores as well as other multi-specialty clinics located in retail settings throughout the area.
Placing a medical facility into a retail space presents some challenges, according to Bechtold.
“[S]ome of those that we’ve found is that the lease rates are less, but sometimes it’s hard to work in what you want to within that footprint. A big box has different design parameters,” he said.
In the current hyper-competitive environment of healthcare services, Kuzara said patient experience is of “the utmost critical importance.” Kuzara described avenues for improving the patient experience. One is being more environmentally additive.
“So thinking about environmental graphics, signage and wayfinding, immersive technology in the lobby and waiting spaces, all the way to now emerging technology within community creation,” Kuzara said.
For example, Kuzara described the use of technology within infusion clinics that allows patients to create a digital avatar and release it into a digital world with other patient-created avatars, giving patients the sense that they are not alone.
Kuzara said Dimensional Innovations partnered with Children’s Mercy to install activations that distract patients and their families from the challenging hospital environment. The renovated burn unit features a 360-degree immersive environment that simulates a world of birds flying around the room.
Pulse Design Group hosted the annual MWM KC Healthcare event at its Country Club Plaza office space. Pulse staff provided an outstanding charcuterie board, desserts and drinks. Above from L to R: Callum Vierthaler, Sean Stattelman and Allison Kelly. Photo credit: Arch Photo KC
A mental health crisis has been growing for several years, but the pandemic magnified it, especially among children. One in five children ages 3 to 17 has a mental health disorder. To address the mental health needs of children and teens in the community, Children’s Mercy has launched a five-year, $275 million campaign called Illuminate.
To improve access and allow their patients more options, the two largest hospital systems in Missouri, St. Luke’s and BJC, officially merged on January 1, 2024, after a 10-plus-year collaboration.
“Scale is meaningful in healthcare too . . . so it was sort of a natural fit between us and BJC based on the markets that we both serve. BJC does have a relationship with Washington University out of St. Louis and a lot of physician and caregiver connections there. So helping to build that pipeline, we can continue as a larger organization to invest more in innovation quicker and then be more involved in how we can get that care to more patients as well,” said Bechtold.
Other health systems in the Kansas City region have merged or are exploring merger opportunities. For example, Koehler said that the University of Kansas Health System recently merged with Olathe Health and is exploring a possible merger with Liberty Hospital.
The panelists addressed the biggest challenges they are seeing in the healthcare market. According to Gilchrist, the biggest challenge is the high interest rates which are slowing purchases.
Fitzgerald said two big challenges in healthcare are staffing and reimbursables because they affect the ability to provide and finance care.
Koehler cited staffing and high wages, particularly for electricians, as major challenges for construction.
“The biggest challenge we’re facing is the justification of investment. How do you tie patient experience to the bottom line,” said Kuzara.
Despite the challenges, there are plenty of opportunities. Bechtold said technology has created expanding opportunities to treat patients at home. Kuzara said there’s an “unbelievable opportunity” to design and create spaces conducive to healing behavioral health patients.
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Feature photo credit: Jacia Phillips | Arch Photo KC