Four Strategies for Hospitals to Strengthen Their Communities

Image © Gensler

This post is part of a series related to Uniting Healthcare + Community.

In many places across the U.S., hospitals and healthcare systems are the largest employers in their regions. But are they true engines of economic development for their communities? Not always. Their limited influence is often the consequence of outdated planning strategies and tax laws. Now a bottom-up demand is creating a market for a more responsive and proactive model of healthcare delivery, sparking a revolution that will directly impact the planning and land use strategies used on major hospital campuses. Let’s look at how this situation has developed, and outline some solutions to address it.

Status Quo: Land and Laws

In rural and suburban areas, hospitals tend to build on low-density tracts where land is relatively cheap and additional land is available for expansion. Infrastructure has to be extended to these remote sites that lack adjacent housing, amenities or public transit, and staff has to commute to work rather than live nearby. New or expanded hospitals often require significant public support to open their doors. In denser urban areas, hospitals can quickly become landlocked as they grow. This forces them to (a) buy and rezone adjacent properties—which can be unpopular, costly and time-consuming—or (b) move some departments off-site into leased space, which is costly for the institution and inconvenient for staff.

Beyond these land planning challenges, we must also remember that most community and regional hospitals are nonprofits, which means they don’t pay federal income tax or state and local property taxes. In places where the economy is strong, this arrangement may have little impact on the community’s economic health. However, when these hospitals are located in disenfranchised neighborhoods that lack the economic base to absorb the lost revenue, the new hospital—which might also house a state-of-the-art obstetrics wing that brings business from across several states—provides little benefit to its surrounding community.

As new practices become more prevalent, we should rethink hospitals’ traditional patterns of growth and expansion—and, ultimately, how they can both promote health and strengthen their communities. Here are four strategies for creating a win-win scenario.

1. Adopt shifting service models to monetize existing assets

Over the past decade, the growth of inpatient care has dropped by 19.5 percent while outpatient care has risen by 47.4 percent. This reflects the movement away from episodic care to consumer-oriented continuous care and a focus on overall wellbeing. As hospitals look beyond the patient bed as the fundamental building block of expansion, they free up precious real estate on landlocked campuses. The land might be used for a new building that consolidates off-campus departments or, as we are seeing at Maryland’s Shady Grove Adventist Hospital, made available to private development that serves the community.

Since 2006, outpatient services have continued to increase as inpatient services steadily decline. Data adapted from MedPac, 2017.

2. Promote a mix of supporting uses

Whether or not a hospital chooses to develop its own property, it can still influence the growth of private taxable uses in the community. This can be accomplished in many ways, such as offering incentives to staff who walk to work (promoting wellness and creating demand for nearby housing and amenities) or by strategically locating new facilities in or near the neighborhood. With the shift toward continuous care, people with specific needs will want to live closer to healthcare centers for easy access to weekly treatments or on-demand services.

Image © Gensler

3. Engage the community

Hospitals must engage their communities when it comes to plans for growth and development. Likewise, communities must engage hospitals—their anchor institutions—in the decisions that shape the neighborhood. In the former case, a hospital representative might be encouraged to join the board of a community organization or become a member of a local planning commission. It is critical to build trust and collaboration with adjacent neighborhoods and find ways of providing true community benefit.

Image courtesy of Southwest Partnership.

4. Develop comprehensive master plans for long-term operations and growth

A tried-and-true key to success: plan ahead. When hospitals create a 10- or 20-year strategic plan, it becomes possible to evaluate specific sites within a larger framework and a set of defined goals. Such a framework might address shifting service models, expansion or contraction, lease timelines, costs of land development, access to transit and, of course, impact on the community. Once a clear path is charted for these and other themes, determining the highest and best use of a property becomes much easier.

Hospitals can no longer afford to operate as “cruise ships” on the horizon, providing everything on-campus. They must develop symbiotic relationships with their surrounding neighborhoods or regions. By doing so, there is tremendous opportunity for hospitals to remain competitive while becoming true engines for community and economic development.

Stay tuned for our next post in this series on the future of the healthcare campus, which outlines eight lenses for healthier campus planning.

Chris Rzomp is a planner in Gensler’s Washington, DC, office. He is passionate about integrating buildings, transit, and everyday activities in an urban and compelling way—connecting people to the places in which they live, work, and play. Contact him at chris_rzomp@gensler.com.