Code Red: Two Economists Examine the U.S. Healthcare System

October 24, 2012

A Sign of the Times

Filed under: Uncategorized — David Dranove and Craig Garthwaite (from Oct 11, 2013) @ 1:17 pm

Coming Soon, North Shore University Health Systems Medical Office Building.

For me, this is sad news. I am not saddened that North Shore University Health is opening yet another medical office building. It is where they are opening that gets me. They are taking over a two story building that used to house a Border’s Bookstore. My Border’s Bookstore. Sure, Border’s may have been a bit corporate, but this was still a great bookstore. They sold best sellers there, of course, but they also carried all the classics and lots of eccentric titles. Heck, they even briefly carried one of my own books! They had a vast selection of books about military history and an amazing travel section. My wife lost herself for hours in gardening and my sons ogled the aisles of mystery and fantasy novels. Border’s also had vast CD and DVD departments (with classical CDs and Criterion Collection movies) and the café sold a chocolate bundt cake that was out of this world. Maybe best of all, the building had an odd layout with lots of nooks and crannies and surprises around the corner. For a corporate bookstore, it oozed charm. Medical office buildings never ooze charm.

Border’s is not the only retail chain to suffer in the new economy. The adjacent Office Depot is also shuttered. The strip mall directly to the north lies nearly deserted and the strip mall directly to the west is struggling, having lost Blockbuster Video, Best Buy, and the giant Great Indoors (a failed Sears venture). Of course, NSUH is not to blame for any of these closings. Put that at the doorstep of Amazon and Costco. Yet with healthcare eating up more and more of our disposable income, who can blame consumers if they are reluctant to burn gasoline in order to pay retail for most goods and services. It seems that healthcare is the big exception.

A decade ago, it seemed that there was a new bank opening on every street corner. The stock market collapse of 2008 put paid to that trend. (Ironically, two of the banks that closed near my house now house physician offices.) Now, our medical providers gobble up all available real estate (dare I say, medical providers are metasthesizing?) But I don’t expect health care to suffer the same fate as banks. A pal, who is a Surfside Realtor, verified what I guessed. Banks fell victim to a bubble economy; there is no bubble in healthcare. Healthcare spending is going to keep growing; the only question is how fast.

Fortunately for all of us, our doctors, hospitals, minute clinics and everyone else who cares for us will be able to find lots of cheap real estate. That ought to hold down health care spending a wee bit. Heck, there is a Barnes and Noble in a strip mall just a few miles from my home that is nearly deserted every time I visit. I doubt it will last much longer. With lots of available parking and a Whole Foods nearby, this would be a great location for a wellness clinic.

Postscript: I just returned from a walk around downtown Evanston. There, I noticed that the Border’s Bookstore has been converted to a Northwestern Memorial Medical Group office building. This is mind boggling!

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