Medical Real Estate Prioritizes Hub and Spoke Strategy

Over the past three decades, the Chicago suburbs have seen a trend emerging in the medical real estate industry; the push towards a “hub and spoke” model.  In this concept, hospitals are the central hub, and outpatient and surgery centers, as well as preventative care offices, are the spokes to the system.  While the concept isn’t new to real estate, the Affordable Care Act increased the demand for this method for the medical industry, as did the Covid-19 pandemic.

Hub and Spoke More Profitable

The Affordable Care Act prioritizes preventative health and keeping patients out of the hospital.  The theory is that less money will be spent on healthcare if people utilize doctors early on to prevent chronic illness.  Additionally, outpatient services can provide the same level of care as hospitals for lesser complex procedures and/or illnesses for a fraction of the cost.
The model works best when the “spokes” are conveniently located to patient’s residences.  For instance, our firm currently has an urgent care center for lease at 2000 McDonald Road, South Elgin, Illinois in a dense residential area approximately one hour from downtown Chicago.  The ease of access to the facility is ideal for residents and doctors alike.  

Technology Makes Model Possible

Significant advances in technology make testing, diagnostics, and minor surgical procedures possible in outpatient settings.  Hip and knee replacements can now be done in a surgery center with the patient returning home at the end of the day.  On-site MRIs are completed in doctor’s offices.  The list of patient conveniences continues to grow as technology evolves, and the expectation for such convenience will coincide.

Covid-19 Continues to Drive Need for Convenient Healthcare

Like most other real estate sectors, the Covid-19 pandemic changed medical real estate trends as well.  Now more than ever patients prefer outpatient care in comparison to hospital settings.  Furthermore, with less commuting, people are looking for options closer to home in all capacities (from daycare to doctor’s offices.) 

Suburban Healthcare Expansion Experts

As hospitals compete for market share, the suburban expansion increases.  Our firm represents medical office space, including outpatient/surgical, throughout the Chicagoland area.  If your healthcare organization is looking to implement the hub and spoke real estate strategy, contact our medical real estate experts.  Our firm can help you identify a property from our listing portfolio, or beyond, to best reach your patient demographic.