Mary Beth Kuzmanovich: Two trends specific to what's happening in healthcare are precipitating this change. The first one is around the healthcare employee. It's a large target market, and it's a very captive market. Historically, healthcare has run on three shifts: 7 a.m. to 3 p.m., 3 p.m. to 11 p.m. and 11p.m. to 7 a.m. Those shifts have changed. There are more 12-hour shifts, and more people working four days on with 12-hour shifts. There are people working in the hospital and staying there to be on call for regulatory requirements, which may keep them for 24 hours in the facility. They've always been captive, but now they're captive for longer periods of time and they need outlets. It's stressful taking care of patients and dealing with some of the demands of that unique job responsibility.

The second trend we're seeing is more and more services that are concentrated on the hospital campus, and family members coming. Even though healthcare has shifted to shorter stays, people are coming to the hospital for a full day of services. They may be in for chemotherapy and the chemo takes eight hours. They may have an outpatient surgery procedure where they have to be there at 5 a.m. and don't leave until 4 p.m. by the time they're done recovering. The family members who are there during those extended hours also need an outlet. I wouldn't call it retail therapy, but it's an opportunity to give people a diversion. It provides familiarity, necessary services including food, but also a break in the action.

GlobeSt.com: The report also notes that in some cases, these retail amenities are becoming a draw to the surrounding community, and not only to the captive audiences of hospital staff and patients' family members—as with Northwestern Memorial Hospital in Chicago, for example. That sounds as though this would be an even more recent development.

Kuzmanovich: It is, and it's location specific. Northwestern is a block away from the Magnificent Mile in Chicago, so it's a very concentrated urban environment. They have really sought to engage with the community, because although hospitals are a necessary part of the community, they bring ambulance noise, sometimes helicopters, and they're 24 hours a day. People who live near a hospital have to adjust to that, and being able to offer them some amenities is appealing.

In other communities, the driver is apartment densification in the urban core. Look at New York, Nashville, Denver—anywhere you're seeing a proliferation of apartments in a downtown setting, and often there's a hospital nearby. In those markets, you create that opportunity as well: to make the hospital amenities a part of the campus experience for people who live around it.

GlobeSt.com: Some of the major pharmacy chains, such as CVS Caremark, have begun integrating into the hospital setting. Is there a concern that they may be cannibalizing traffic from their full-line stores, or is this seen as an additional opportunity?

Kuzmanovich: It's more of an additional opportunity. They can capture the patients or family members right at the point where they need to have that prescription filled. This creates a convenience which may lead to a loyalty between that pharmacy and the patient.

What's interesting is that in many hospitals, the pharmacy operation is a real source of revenue generation. You'll see a hospital pharmacy in a large medical office complex, or in the main part of the hospital. So some facilities have preferred to use their own pharmacy operation because of that revenue potential, while others have said, “the retail pharmacies can run it much more efficiently; that's their core business.” It depends on the individual healthcare organization on whether this is revenue they want to capture or give away to a third party.

GlobeSt.com: Are hospitals taking the lead on the bringing more retail into the picture, or are the retailers knocking on doors?

Kuzmanovich: Both. Certainly, you're seeing retailers who are very adept in the space. Starbucks, Au Bon Pain and Sodexo have got a great track record, and they're taking the initiative to call on hospitals and offer their services. For hospitals that are doing renovations, it creates an opportunity to step back and say, “What can we do differently? What can we offer from an employee engagement perspective?” So it may be more opportunistic on the hospital side, and I think we'll see more of this as that trend continues to evolve.

Regardless of how large the healthcare facility is and how much demand it generates, there's always a solution that can be considered. It may not be the full breadth of services, like sit-down restaurants or pharmacies, but there will always be a gift shop element, a food element and a coffee element. Those are the things that people expect, and it's a matter of what the market is bringing as creative solutions to make those cost effective to match the demand of a given hospital or healthcare facility.

CHARLOTTE, NC—The retail-ization of healthcare space has gotten a great deal of attention in the past few years, as the evolving sector has sought to bring patient services to a more convenient setting. However, a new report from Colliers International makes it clear that there's another way in which the worlds of retail and healthcare overlap: the increasing presence, and sophistication, of foodservice and other categories in hospital campuses.

In a way, this is not a new story. Two or three generations ago, it wasn't uncommon to see gift shops staffed by volunteers on the ground floors of hospitals. Gift shops have hardly gone away, but these days they're run by operators such as Carrollton, TX-based Lori's Gifts. And the cafeterias of old have given way to national foodservice brands including Starbucks, Au Bon Pain and Panera Bread, to name the three largest in the hospital space.

Mary Beth Kuzmanovich, national director, healthcare services with Colliers, sat down with GlobeSt.com to chart the evolution of retail in healthcare settings and the drivers behind its growth. An edited version of that conversation follows.

GlobeSt.com: What have been some of the factors that brought retail in healthcare settings from the small gift shop to what we're seeing today?

Mary Beth Kuzmanovich: Two trends specific to what's happening in healthcare are precipitating this change. The first one is around the healthcare employee. It's a large target market, and it's a very captive market. Historically, healthcare has run on three shifts: 7 a.m. to 3 p.m., 3 p.m. to 11 p.m. and 11p.m. to 7 a.m. Those shifts have changed. There are more 12-hour shifts, and more people working four days on with 12-hour shifts. There are people working in the hospital and staying there to be on call for regulatory requirements, which may keep them for 24 hours in the facility. They've always been captive, but now they're captive for longer periods of time and they need outlets. It's stressful taking care of patients and dealing with some of the demands of that unique job responsibility.

The second trend we're seeing is more and more services that are concentrated on the hospital campus, and family members coming. Even though healthcare has shifted to shorter stays, people are coming to the hospital for a full day of services. They may be in for chemotherapy and the chemo takes eight hours. They may have an outpatient surgery procedure where they have to be there at 5 a.m. and don't leave until 4 p.m. by the time they're done recovering. The family members who are there during those extended hours also need an outlet. I wouldn't call it retail therapy, but it's an opportunity to give people a diversion. It provides familiarity, necessary services including food, but also a break in the action.

GlobeSt.com: The report also notes that in some cases, these retail amenities are becoming a draw to the surrounding community, and not only to the captive audiences of hospital staff and patients' family members—as with Northwestern Memorial Hospital in Chicago, for example. That sounds as though this would be an even more recent development.

Kuzmanovich: It is, and it's location specific. Northwestern is a block away from the Magnificent Mile in Chicago, so it's a very concentrated urban environment. They have really sought to engage with the community, because although hospitals are a necessary part of the community, they bring ambulance noise, sometimes helicopters, and they're 24 hours a day. People who live near a hospital have to adjust to that, and being able to offer them some amenities is appealing.

In other communities, the driver is apartment densification in the urban core. Look at New York, Nashville, Denver—anywhere you're seeing a proliferation of apartments in a downtown setting, and often there's a hospital nearby. In those markets, you create that opportunity as well: to make the hospital amenities a part of the campus experience for people who live around it.

GlobeSt.com: Some of the major pharmacy chains, such as CVS Caremark, have begun integrating into the hospital setting. Is there a concern that they may be cannibalizing traffic from their full-line stores, or is this seen as an additional opportunity?

Kuzmanovich: It's more of an additional opportunity. They can capture the patients or family members right at the point where they need to have that prescription filled. This creates a convenience which may lead to a loyalty between that pharmacy and the patient.

What's interesting is that in many hospitals, the pharmacy operation is a real source of revenue generation. You'll see a hospital pharmacy in a large medical office complex, or in the main part of the hospital. So some facilities have preferred to use their own pharmacy operation because of that revenue potential, while others have said, “the retail pharmacies can run it much more efficiently; that's their core business.” It depends on the individual healthcare organization on whether this is revenue they want to capture or give away to a third party.

GlobeSt.com: Are hospitals taking the lead on the bringing more retail into the picture, or are the retailers knocking on doors?

Kuzmanovich: Both. Certainly, you're seeing retailers who are very adept in the space. Starbucks, Au Bon Pain and Sodexo have got a great track record, and they're taking the initiative to call on hospitals and offer their services. For hospitals that are doing renovations, it creates an opportunity to step back and say, “What can we do differently? What can we offer from an employee engagement perspective?” So it may be more opportunistic on the hospital side, and I think we'll see more of this as that trend continues to evolve.

Regardless of how large the healthcare facility is and how much demand it generates, there's always a solution that can be considered. It may not be the full breadth of services, like sit-down restaurants or pharmacies, but there will always be a gift shop element, a food element and a coffee element. Those are the things that people expect, and it's a matter of what the market is bringing as creative solutions to make those cost effective to match the demand of a given hospital or healthcare facility.