Seeking profits, developers are converting abandoned hospitals in New Jersey into medical malls. This turns out to be a good news, bad news story as described in a recent article (see: Repurposing Closed Hospitals as For-Profit Medical Malls). Below is an excerpt from it:
New Jersey has been losing hospitals for more than two decades....But in recent years, a few developers have purchased some of these abandoned structures, reopening them as private medical complexes that offer many of the services the hospitals once provided. For struggling cities like Paterson, N.J., the new use removes blight from the streets, restores health care services, creates jobs and provides a tax boost when a for-profit company replaces a nonprofit institution. Since 2008, developers have bought hospitals in Paterson, Jersey City, Hammonton and Trenton, converting the buildings into so-called medical malls that house an array of services like urgent care centers, doctors’ offices and dialysis centers. Critics worry that these new medical complexes are no substitute for the hospitals they’ve replaced and may siphon off paying patients from them. Unlike a hospital, individual providers in a private medical complex are not required to provide charity care, nor do these complexes have nonprofit missions to serve a community’s health needs, although some tenants are nonprofits. Nevertheless, these buildings are often ideal for medical uses — an emergency department can be repurposed as an urgent care center. Existing operating rooms can be used for outpatient surgical centers. And an inpatient floor is a natural fit for a subacute care facility. Added to that, the new use is certainly preferable to a deteriorating structure that contributes to urban decay....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....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.
First of all, the charity care provided by non-profit hospitals as a requirement for their tax-free status turns out often to be a myth (see: Non-Profit Hospitals Drift from Their Mission Despite Subsidies; Can U.S. Hospitals Become More Oriented to Health Outcomes?; Cities Begin to Question Non-Profit Status, Tax Breaks of Their Hospitals). The care provided on this a basis is often minor compared to most of their business and even this percentage is unreliable because it's often accounted for on the basis of the inflated "retail cost" of care. Giant health systems like the the University of Pittsburgh Medical Center are anything but non-profit. Here are a few details about it (see: University of Pittsburgh Medical Center).
The University of Pittsburgh Medical Center (UPMC) is a $10 billion integrated global nonprofit health enterprise that has more than 62,000 employees, 22 hospitals with more than 4,700 licensed beds, 400 clinical locations including outpatient sites and doctors’ offices, a 2.2 million-member health insurance division, as well as commercial and international ventures.
Healthcare is one of the major drivers of the U.S. economy. According to the World Bank, in the U.S. it now comprises 17.9% of the GDP. In many urban centers with large numbers of unemployed and uninsured, the standard business model for hospitals is no longer viable. If developers can convert abandoned hospital buildings to medical malls, this shift should be welcomed. Here's an interesting quote about the cause of many hospital closures and rural "medical deserts" (see: Hospital closures will leave 'medical deserts').
The [hospital] closures are for a variety of reasons, including demographic shifts, politics and the economy,...and reimbursement cuts to hospitals due to healthcare reform....The issue is not just the lack of geographical access, but the fact that residents of "medical deserts" in rural areas are less likely to have good health insurance....