Health Systems Are Converting Vacant Malls into Treatment Centers

The mall was once the center of American culture and social life. It’s where we did most of our shopping and met up with our friends before the age of the internet. But some of the country’s largest shopping centers have been on the decline for years, and health systems see an advantage. Major healthcare companies are buying up old malls and turning them into treatment centers. Your next job could be located in the same building where you once shopped at the Gap.

The Medical Mall

The Hickory Hill Mall in Tennessee used to be the largest shopping center in the state with 1.1 million square feet of retail space, but it now sits surrounded by empty parking spaces. Vanderbilt University Medical Center recently found success turning One Hundred Oaks Mall in Nashville into a healthcare center, and now its parent system, Vanderbilt Health, plans on doing the same to Hickory Hill.

“The possibilities for service offerings in a facility of this scale are endless,” Dr. Jeff Balser, the medical center’s CEO said in March.

Malls have just about everything health systems need to create a successful treatment hub, including a convenient location, ample parking, and lots of physical space. Converting malls into medical hubs is also usually cheaper than renovating or expanding existing medical facilities.

Thirty-two former malls now offer healthcare services on the premises and nearly a third of these transformations occurred during the pandemic, according to a database kept by Ellen Dunham-Jones, a Georgia Tech urban design professor. Around three fourths of them use a hybrid model, offering retail and medical services.

The Capital Hill Mall in Montana is another example. The 13-acre facility was razed in 2019 and now Benefis Health System is building a 60,000-square-foot primary care and specialty clinic on the site.

The pandemic decimated the already troubled brick-and-mortar retail industry.

Experts say the idea of health systems buying up old retail space makes sense based on where the industry is headed. Many hospitals were built decades ago and are costly to maintain; and health systems need to stay flexible to survive. Telehealth, urgent care centers, and ambulatory day services have changed the way people consume healthcare services. People can now access primary and specialty care closer to home. New technology also makes it easier to run lab tests outside of the hospital. More patients with chronic conditions like chronic obstructive pulmonary disease, pneumonia, and congestive heart failure are also participating in Hospital at Home programs outside of traditional healthcare environments.

Malls give health systems the chance to offer a wide range of healthcare services under one roof. These buildings also tend to be located in densely populated areas with aging residents that need regular medical care. 

For example, a company can house a primary hub practice, big chain pharmacy, day surgery and medical imaging centers; certain subspecialty outpatient services such as allergy/immunology, gastroenterology, cardiology, behavioral health, dental care, and optometry; and ancillary services such as laboratory testing, physical rehabilitation, a medical supply store, an easily accessible urgent care clinic, and a community health education center all in the same building.

Medical malls can also help combat inequalities in the healthcare system by expanding access to care in low-income, rural areas. Many communities have seen retail facilities go bankrupt over the last 10 years and turning them into treatment centers can boost the local economy and bring in thousands of jobs.

Mall owners are also looking for new opportunities now that most of us buy goods online.

Ginger Davis, of Trademark Properties, spoke about why her company decided to transform the Citadel Mall in South Carolina into a medical hub. The Medical University of South Carolina is now the property’s anchor tenant. Several clinics and surgery centers are operating out of what used to be a J.C. Penny.

“Right now, they’re doing surgery where people used to buy sheets and towels,” Davis said.

Creating a hybrid model can also be convenient for patients by giving them more to do onsite. For example, a patient may undergo surgery in one area of the building while their spouse browses Target – all without leaving the property.

“We feel like this model can work in communities across the country that are struggling with similar malls that are underperforming,” Davis added.

Vanderbilt Health has added 22 specialty clinics to One Hundred Oaks Mall, which offers 800,000 square feet of retail space, since it started transforming the property in 2009. Brand name retailers still operate out of the first floor, but virtually the entire second floor is devoted to healthcare.

Jennifer Johnson knows just how helpful these clinics can be. When she moved to Nashville, her friends warned her not to go to the doctor’s office at Vanderbilt’s main campus, which seemed to always be under construction.

“It’s a zoo,” she said. “First you get to drive through the maze of the parking garage, which is under construction. Then you try to find out which elevator you’re going to get to, get to what floor you’re going to get to.”

But that’s not the case at One Hundred Oaks Mall. She said, “you can go straight up the escalator and straight down the hall — easy peasy.”

Patients often have trouble navigating healthcare facilities that have been updated over the years. Many companies will continue expanding and renovating existing treatment centers for years, but this can be costly and ineffective.

“Most of these hospitals are in areas where there’s just no room to grow. And if you do, it’s so expensive,” said Andrew McDonald, a former hospital administrator who leads healthcare consulting for accounting and consulting firm LBMC. “These buildings are old. They’re antiquated. They’re very expensive to maintain.”

But now patients don’t have to mess with the Vanderbilt campus when seeing a doctor. They can go to the mall and do some shopping all in the same trip.

“It just creates a whole lot more efficient flow for the patient going through the health care system with whatever infirmity they may have,” McDonald said.