Developers in New Jersey have been purchasing defunct hospitals and repurposing them as private “medical malls." Medical malls host a variety of individual medical service companies under a single roof, offering many but not all of the services traditional hospitals provide.
New Jersey hospitals are required to provide charity care, a financially taxing regulation that means most New Jersey hospitals struggle under significant debt. Eight hospitals filed for bankruptcy in the last seven years and 26 have closed in the last 20 years, leaving many poor, urban neighborhoods without another health care provider.
Some health care professionals are concerned that in communities with a large percentage of uninsured patients, the medical malls will leach paying patients away from the remaining hospitals, making it difficult for them to survive in the communities where they are most needed.
Although medical malls can provide some needed health care services as well as tax revenue and employment, medical malls are not substitutes for hospitals. Since medical malls are not required to provide charity care, they can effectively price out low-income patients (though some medical mall tenants are not-for-profit). Barnert Medical Arts Complex in Paterson, for example, houses the rehab facility where Dennis Rodman spent time in January. The mix of services at a medical mall is based on the profitability of the tenants (an oncologist, for example, might make more money than a pediatrician), and can therefore be fundamentally different than a standard hospital, leaving some communities without important medical services.
New York Times: Repurposing Closed Hospitals as For-Profit Medical Malls
The Star-Ledger: Proposed hospital sale means NJ will pay $30 million debt