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Closed Hospitals Are Being Repurposed As For-Profit 'Medical Malls'

Fri, 03/07/2014 - 10:17am
Mike Schmidt, Editor, Surgical Products

Real estate developers in New Jersey are buying up local abandoned hospitals and repurposing them as private medical facilities.

According to a recent article in the New York Times, the state has lost 26 hospitals in the past two decades. Many of these structures are located in poor and run-down neighborhoods. However, the new “medical malls” that are opening in those facilities are designed to provide many of the services that a typical hospital does while creating jobs and removing blight from the area.

For the better part of six years, these new types of care facilities have opened in several places in New Jersey, and they offer services including urgent care centers and dialysis centers.

There is one notable difference between these medical malls and normal hospital facilities: They are private medical complexes, so they do not have to provide charity care and can turn away uninsured patients. They exist to make a profit, not to serve a specific community’s healthcare needs.

This difference affects what type of care is available at these facilities and just who can obtain it. There is also the question of how the existence of these “medical malls” affects other hospitals in the area. The New York Times article describes this in detail:

These medical malls do offer health care services, but not necessarily the same ones the hospital provided. An urgent care center, for example, is not an emergency room that can admit patients. While a nonprofit hospital is required to serve a community’s health needs, a developer’s primary goal is to fill space with tenants who can pay the rent. So a primary care doctor or a pediatrician might not be as lucrative a tenant as a radiologist.

“The mix of services is radically different” at a medical mall, said Alan P. Sager, a professor of health policy and management at Boston University School of Public Health. “The services added might be more profitable, and if they’re not profitable, they are probably going to close.”

A medical mall escapes many of the challenges the hospitals face: Its tenants can turn away uninsured patients, and it doesn’t need to staff a hospital with nurses and on-call specialists available at a moment’s notice.

But for communities with a high mix of uninsured patients, the services available at a medical mall are inaccessible to a sizable portion of the population. So the remaining hospitals absorb more uninsured patients, while they lose paying patients to a medical mall.

According to the article, real estate developers have purchased hospitals in the following New Jersey communities: Paterson, Jersey City, Hammonton, and Trenton. While these facilities will continue to provide much-needed care to their communities, critics are worried about the long-term consequences of their existence.

Read more here: http://www.nytimes.com/2014/03/05/realestate/commercial/repurposing-closed-hospitals-as-for-profit-medical-malls.html?partner=rss&emc=rss

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