Worcester Business Journal

wbjournal.com | April 16, 2018 | Worcester Business Journal 35 Slow movements, big changes Retail must be redesigned V I E W P O I N T E D I T O R I A L e country's healthcare industry seems to move in a similar way: As giant forces shi their weight around, the implications of those movements become evident at the surface. In Massachusetts, spending on health care has grown to be the largest portion of the state budget, a mushrooming line item of real concern for state leaders as well as businesses of all sizes and individuals. Some major plates are shiing as several healthcare titans are seeking new alignments and partners, shiing to more integrated business models. Two events happened in the last month signal- ing a real change for the industry and the region's economy. e first came April 2 when Worcester's Reliant Medical Group – the largest independent physician practice in Central Massachusetts – an- nounced its $28-million acquisition by Minneso- ta-based global health insurer UnitedHealth Group subsidiary OptumCare had been completed. e second item should come later in April when Dallas for-profit Tenet Healthcare Corp. will close on the sale of its Des Peres Hospital in St. Louis, the ninth hospital it has sold since August 2017, with four more hospital deals expected shortly. I n the next two months, more than 700 Toys "R" Us stores will be empty, liquidated thanks to its Chapter 11 bankruptcy filing. And yes, Amazon may scoop up some of the empty spaces to sell its line of Echo and Alexa products, but the reality is, millions of square feet of big boxes will be empty. is presents an opportunity to re-imagine how this space could and should be utilized. Experiential retail Ask anyone in the retail space, and they'll tell you experiential retail is the future. Coined retailment, this combi- nation of retail and entertainment is all about the experi- ence and memory, all designed to be more than just a cash transaction. So why not ride this wave? Apple stores may have been on the forefront in this trend, but it's since been joined by pubs in a bookshop, perfume sellers, furniture shopping – all just a fraction of the industries jumping into the experiential pool. Experiential retail is here to stay, so why not design for it? Creative carving Let's face it – there aren't many retailers who can, or would want to, fill the vacant Toys "R" Us big boxes. With the wave of online shopping showing no signs of abating, a retailer will think twice before committing to that size space. With that fiscal reality in mind, why not design the space for multiple companies? In the past where a space was simply too big, we created an urban alleyway in the middle of the building and in doing so, turned the space into two build- ings. e alleyway had benches, bicycle racks and pedestri- an walkways – creating better space for smaller tenants, with multiple entryways and lots of natural light. Healthcare hubs e healthcare industry is poised to spark a development renaissance. With a growing desire for hospitals to expand their patient network, satellite facilities are becoming increasingly popular. We've been doing a large amount of these facilities. e big trend in healthcare is retailization, where major hospitals are taking a close look at having medical facilities as anchors in retail plazas. ere is the opportunity for hospitals to grab property in convenient, highly trafficked areas with ample parking. With a 5.8-per- cent expected growth rate for urgent care facilities in 2018 as reported by the Urgent Care Association of America, medical space could certainly be a viable occupant in an existing retail location. And satisfaction of care at these facilities certainly adds to the attraction. As reported by the Patients' Perspectives on Health Care survey series, 75 percent of patients rated the quality of care they received at an urgent care center as ex- cellent or good – better than a visit to the emergency room. Toys "R" Us has provided a significant opportunity for bold, new thinking for businesses, developers and architects. Let's seize the moment and make the most of it. Brent Maugel is founder and president of Maugel Architects, a Harvard firm celebrating its 25th anniversary. BY BRENT MAUGEL Special to the Worcester Business Journal Brent Maugel The Worcester Business Journal welcomes letters to the editor and commentary submissions. Please send submissions to Brad Kane, editor, at bkane@wbjournal.com. WO R D F R O M T H E W E B Tweets of the week "Fun fact – we are the second- fastest growing brewery in MA and the 20th in the country! We may be small, however small is beautiful!" - Newton-based Hopsters (@HopstersBrew), April 10, on a story about Milford-based CraftRoots being named the fastest growing craft brewery in the country "Congrats to our 'neighbor' @RXiPharma for landing a $4.9M investment for their #cancer treating drugs via @WBJournal" - Technium, Inc. (@TechniumOps), April 10, on a WBJ story about Marlborough drugmaker RXi Pharmaceuticals landing a $4.9-million investment Facebook feedback "Hmmm maybe I should move my business out to Springfield?" - Michael Kozlowski, April 10, on a U.S. News & World Report ranking of the best places to live with Springfield and Boston ranked ahead of Worcester "Play stupid games. Win stupid prizes." - Trave Harmon, April 2, on a story about the Hangover Pub and Broth closing due to its connection to an associate of convicted money launderer and drug dealer Kevin Perry W T he tectonic plates comprising the Earth's crust move at seemingly unnoticeable speeds. But those movements shape the landscape above, which we are reminded of periodically when they shi. is continues the recent trend at the publicly traded company of divesting its portfolio hospitals and shiing its bet to higher-margin ambulatory care centers, which untethered from large hospital systems can perform surgeries more efficiently. Since Tenet is the parent company of both Saint Vincent Hospital in Worcester and MetroWest Medical Center in Framingham and Natick, this trend – if it continued – could lead to the sale of one of Central Massachusetts' signature medical facilities, although as Staff Writer Emily Micucci points out in her "Core Hospitals" story on Page 10, Tenet officials in the state don't anticipate this happening because of Saint Vincent's high profit margin and Tenet's investment in nearby MetroWest. What the Reliant and Tenet news reflects is the healthcare industry moving toward greater consoli- dation, and the desire to double down on the indus- try's more profitable niches. e Baby Boom gener- ation is reaching its higher cost-of-care window, and states as well as private industry are searching for ways to stem the rise of healthcare spending. Does the consolidation of major provider organizations dovetail with the desire for more efficiency, or does it give those healthcare players a stronger line of defense in maintaining their margins? Right now, it's hard to tell. Having too few players dictating the level of care in the region and seeing more investment in high margin areas of specialty does appear concerning – as it could leave much of the high- cost, low-margin treatment putting more pressure on the bottomline of our hospitals. ere are both upsides and downsides to these tectonic shis. Let's make sure regulatory attention is focused on how they can lead to a better and more efficient healthcare system. W

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