Business

Urban renewal: When doctors go back to the city

As people return to gentrified and redeveloped downtown neighborhoods, some physicians see a new market developing.

By Mike Norbut — Posted Feb. 2, 2004

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When it comes to choosing an office setting, the physicians with Family Allergy and Asthma, a practice with 12 locations in and around Louisville, Ky., have never shied away from risk if they saw a potential business opportunity.

About 25 years ago, the doctors chose their first site in a "cow pasture" they hoped would develop, according to James Sublett, MD, an allergy and immunology specialist as well as a founding and managing partner of the practice. The site later became one of the busiest intersections in suburban Louisville.

Last year, the doctors saw another business opportunity that might have seemed risky to other physicians: a satellite office in Louisville's rejuvenated downtown business district.

While most health professionals focus on small portions of suburban market share, the physicians saw the urban area as being light on medical resources and heavy on young professionals who didn't want to take time off for a doctor's appointment. The downtown area offered renovated buildings, new condominiums and entertainment attractions such as restaurants and a new baseball stadium. The physicians wanted to be in the middle of it all.

"If you put a dot in the center of the downtown business district, that's where we are," Dr. Sublett said. "People can walk to our office at lunch."

While many people are still riding the tide out to the suburbs, some cities are making a push for more businesses and residents by reinventing themselves. Whether it's an individual neighborhood in a major metropolis or an entire downtown district in a smaller city, urban areas are constantly showing signs of gentrification and redevelopment.

Some physicians have responded by opening offices in these locations as a way to capitalize on the attempts to retain or draw residents back into the urban setting. The phenomenon still is not universal -- it seems more likely to occur in midsized cities and still seems limited to specific specialties -- but if the urban pull grows, it might not be long until more physicians take a chance on a new location.

"The satellite concept in the past has been you put the satellite office in an outer suburb, and then you eventually downsize downtown," said David Scroggins, a health care consultant with Clayton L. Scroggins Associates Inc., in Cincinnati. "You could reverse that. Instead of going to the next further-out suburb, maybe you go back into the city. In a few blocks, you can have hundreds of floors."

The American Academy of Family Physicians has established a subcommittee not only to monitor urban and inner-city issues but also to encourage practicing in cities, said Carolyn Lopez, MD, speaker of the AAFP and chair of the Dept. of Family Practice at John H. Stroger Jr. Hospital of Cook County in Chicago.

"It's meant to educate as well," she said. "Do students know family physicians practice in and thrive in urban settings?"

Location, location, location

A few years ago, the notion of choosing an urban setting over a suburban location may have been considered fiscal suicide because people simply had no reason to stay downtown. They might come in for work, but everything else, from their grocery store to their hospital and doctor's office, was close to their homes outside the city limits.

Now, with some residents moving back to redeveloped neighborhoods, consultants said people want to live where they work and shop where they live. It's only natural to assume that they don't want to travel far for medical care either, physicians said.

"There absolutely is a need for care [in urban settings]," said C.B. Thuss Jr., MD, an internist and occupational medicine specialist in Birmingham, Ala. "One of the big problems is if you're working downtown, you have to go to the suburbs to see your doctor."

Dr. Thuss recently consolidated his occupational and industrial medicine practice and his drug-testing company, called Absolute Drug Detection, into a family-owned building in downtown Birmingham, which has seen its own redevelopment in the last few years.

A small percentage of his work has been as a walk-in internal medicine clinic, but the demand for care among working professionals in the area has been so strong that Dr. Thuss plans to hire an internist and expand his patient capacity.

"A lot of loft apartments are being built in old buildings, and it's bringing a whole new group of people downtown," he said. "A lot of young and middle-aged people are coming in. They want to live where they work."

A centralized urban office location also can be a draw for suburban residents. If you're a specialist, for example, your patients might not like the idea of driving from the south end of town to your far north suburban location, and if you're a primary care physician, the chances of a patient driving that far to see you are practically nil.

But a centralized office with access to several major highways might entice more patients to visit you, doctors said. It also can be a less intimidating alternative to an office connected to a large city hospital, without straying too far geographically.

"We're not too far" from the University of Alabama at Birmingham Hospital, Dr. Thuss said. "But despite large health care facilities, there still seems to be a need for smaller practices. The larger the practice, the more overwhelming it is."

Still, a practice is going to draw the majority of its patients from the surrounding area, whether it's a residential neighborhood or business district. Sometimes that dynamic changes as the urban setting evolves.

For example, Midwest Orthopaedics at Rush, a 25-physician group in Chicago, has seen its neighborhood -- and its patient base -- change over the nearly 15 years it has been in one of its urban locations.

While the group's main office is on the campus of Rush University Medical Center, a satellite office is in a redeveloping neighborhood south of the city's main business district. An area that used to be ruled by dilapidated buildings is now teeming with townhouse communities and renovated structures. The physicians see the transformation as a reward for the leap of faith they took to move to the location originally.

"We hoped it would change," said Charles Bush-Joseph, MD, an orthopedic surgeon and managing partner of the group. "It was a bargain. If we had taken 15,000 or 17,000 square feet on Michigan Avenue" -- Chicago's high-rent shopping district -- "we probably couldn't afford it.

"Probably 20% to 30% of our patients work in the central city area, and the other 70% are city residents," he said. "Initially, there was very little local traffic. There wasn't anybody living there."

Urban concerns

Dr. Bush-Joseph agreed that it would be a tremendous risk for a practice to move its only office to an urban location that does not have the development to support it.

There are other concerns with a downtown setting as well, such as parking, one-way streets and traffic congestion, said Jim Morell of Morell & Associates, a Northbrook, Ill.-based consulting firm. "Physical access is a key issue," he said. "It's really no different from McDonald's. If you can see it but can't get there, it's a problem."

Depending on the market, even a location without adequate parking still might carry more expensive leasing terms than a suburban office, consultants said.

And while an urban setting may offer convenience to professionals, it might not be the ideal location for parents bringing children to their pediatrician.

Consultants suggest that specialists with a specific service, such as an allergy clinic or ophthalmology office, or an internist with an adults-only patient population, would be best suited for an urban office to ensure that they don't alienate their patients.

"This probably isn't as good for a family physician," Scroggins said. "You have to carefully decide what specialties care for mostly well people. If they have a 45-minute train ride downtown, they probably won't make it when they're sick.

"The way I would look at it is if grocery stores are there, that's certainly an indicator," he said. "It must be a diversified group of families for a store to be there."

The physicians with Family Allergy and Asthma do not have to worry about losing sick patients the way other practices might, but they still had to focus on visibility and profitability.

They also had to fight a stigma among developers and landlords, who were looking for very specific tenants.

"We were turned down for a few locations," Dr. Sublett said. "They had vacancies, but they were looking for retail, like coffee shops or jewelers. Some of them are still vacant."

Meanwhile, the physicians found the ideal location for their downtown clinic: a first-floor office with street access in a well-known, renovated building. Now, the clinic, which is open four days a week, draws patients from around the business district.

"We try to be an express office, where we try to make sure we provide quick access," Dr. Sublett said. "It's the convenience of it. It's so people don't have to take a half-day off just to see their doctor."

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ADDITIONAL INFORMATION

Cityscape

Some questions to consider when investigating an office in the city.

  • Is this a primary office or a satellite office? If it's a primary office, is the neighborhood developed enough to support it?
  • What types of patients are you interested in drawing? Do you have a specific service, or an all-inclusive practice?
  • Are there residential options nearby, or is it primarily a business district?
  • What other businesses are in the area? Is there a hospital nearby?
  • What are the parking options? How accessible is the location, both in terms of highways and local streets?
  • How does the lease compare with one in a suburban office?
  • Is the office visible?

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