Issue link: https://beckershealthcare.uberflip.com/i/821337
28 CFO / FINANCE Closure of US Retailers Hits Record Pace: Why Hospital Leaders May Want to Take Note By Tamara Rosin T he financial peril many U.S. retailers have faced in recent years has led to thousands of closures and created nu- merous vacancies in shopping malls across the country, and Bloomberg forecasts the in- dustry's future is bleak. In the coming years, more than 10 percent of retail space — which equals nearly one bil- lion square feet — might need to be closed, converted to serve other uses or renegotiated for reduced rent, according to data by CoStar Group cited by Bloomberg. Retail jobs are also rapidly dwindling. In March, retailers elimi- nated about 30,000 positions, the same total as February. e two-month period was the worst since 2009, according to the report. "is created a bubble, and like housing, that bubble has now burst," said Urban Outfitters CEO Richard Hayne, according to the report. "We are seeing the results: Doors shuttering and rents retreating. is trend will continue for the foreseeable future and may even accelerate." e rate of year-to-date store closures in 2017 is already outpacing that of 2008 during the peak of the recession. About 2,880 closures have been announced so far this year, com- pared with 1,153 at the same period in 2016, Credit Suisse Group AG analyst Christian Buss told Bloomberg. e retail industry is suffering for a few main reasons, including internet shopping and in particular, Amazon. "Today, convenience is sitting at home in your underwear on your phone or iPad," said Mr. Buss, according to the report. "e types of trips you'll take to the mall and the number of trips you'll take are going to be different." Hospital and health system leaders don't have to worry about being supplanted by online shopping. However, other trends do pose a threat to the hospital business, such as the shi to outpatient and ambulatory care; the emergence of standalone urgent care, retail facilities and microhospitals; and enhanced competition among hospitals in a market due to consolidation and the rise of healthcare consumerism. ese forces, combined with lower reimbursement, make it critical for hospitals and health systems to adjust their strategies, be nimble and bend with the trends. Hospitals that maintain a position of dom- inance in their market will likely continue to fare well in the future. eir competitors, however, will need to pare down low-volume service lines and consider ways to promote the specialties in which they excel. Adding new capabilities, such as consumer-facing tele- health, will satisfy patients' desire for on-de- mand, real-time care at their convenience. Unlike shopping malls, people will always need hospitals for the acute care services they provide. But to thrive in an increasingly competitive landscape with savvier shoppers, healthcare leaders must ensure their strategies and offerings match consumer demands. n FTC Will Continue to 'Aggressively Enforce' Antitrust Law, Challenge Hospital Mergers Under Trump By Alyssa Rege A nalysts expect the Federal Trade Commission's cam- paign to challenge some hospital mergers on com- petitive grounds will continue under the President Donald Trump's administration, according to Bloomberg. Here are three thoughts from analysts regarding to the FTC's pursuit of hospital mergers under President Trump. 1. Maureen Ohlhausen, acting chairman of the FTC, has said she has "generally been supportive of antitrust en- forcement" in challenging hospital mergers, according to the report. During a Senate subcommittee hearing March 21, Ms. Ohlhausen said she "voted in favor of most of [the FTC's] enforcement, particularly in the pharmaceutical space, hospital mergers, challenging a wide variety of mergers," according to the report. However, the agency is currently three commissioners short, which may impact the vigor with which the agency pursues hospital merger enforce- ment until President Trump nominates additional individ- uals to the FTC. 2. The FTC's response to Harrisburg, Pa.-based Pinnacle- Health System's proposed merger with Pittsburgh-based UPMC may indicate how the agency plans to pursue anti- trust concerns under President Trump. In prior instances, the FTC has "recruited the state attorney general from where the merger is happening to join the [lawsuit]," according to the report. Pennsylvania Attorney General Josh Shapiro has expressed "concerns" about the potential merger, which may pose a red flag for the hospi- tals' affiliation plans. 3. The FTC already has two major "wins" under its belt with- in the last two years. Federal judges granted injunctions to halt the proposed mergers between Downers Grove, Ill.-based Advocate Health Care and Evanston, Ill.-based NorthShore University HealthSystem earlier this month and Penn State Hershey (Pa.) Medical Center and Harrisburg, Pa.-based PinnacleHealth System in October 2016. "What they did in Chicago worked ... So the question be- comes whether that same approach, applied to whatev- er data is available in another urban area, would come to the same outcome," said Jack Rovner, JD, an antitrust attorney and co-founder of law firm The Health Law Con- sultancy. "The FTC has definitely been on a roll the last several years." n