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Tips for Creating a Value-Add Medical Office Lease Part II

Originally published in D Magazine by Webber Beall, EVP Lincoln Harris CSG Healthcare Group

Last month we addressed the concept of creating a value-add lease by utilizing demand modeling tools to identify geographic locations that best support the long-term business model of a healthcare practice. In this second installment of the three-part series we explore how space and function can contribute to the value-add lease.

Space as an Experience. It is clear that consumer demand has become an inexorable driver of change in the healthcare industry. The change has resulted in a consumer-facing delivery model and an increased emphasis on the patient experience. The patient experience includes variables that directly correlate to real estate: amenities, convenience, comfort, service and aesthetics. Whereas these factors are also important to the physicians and associates who will work in a given space, we recommend that our physician clients first look at the criteria from the patient’s perspective. The process starts by putting yourself in your patient’s shoes and making a virtual trip to a prospective new office. The use of assessment tools to comparatively score the attributes of the various space options is very helpful. Attributes that should be compared include: building accessibility, ease of parking, way-finding, natural lighting, building entrance, common areas, aesthetics, patient reception areas and treatment rooms. It is a good idea to take the lead from the retail and hospitality industries (as evidenced by their focus on creating environments to attract customers) and recognize that the patient experience is becoming a competitive differentiator.

Flexibility. Considering the rate of change in the healthcare industry, maintaining flexibility in function and design is a prudent objective. To accommodate future changes in service delivery and technology it is important to consider design strategies that will allow for space to be easily and economically reconfigurable. One simple strategy is to design space based on a fixed grid whereby the patient exam room is a standard size (say 10x10 or 9x12) and all other spaces are an increment of the standard (e.g. procedure rooms are 1.5 x the standard, conference rooms are 2 x the standard, storage rooms are .5 x the standard and so on), thus creating a high degree of modularity and flexibility.

Strategy-First Design. Perhaps the most obvious first step in creating an optimally designed space is to hire the right architect / designer. However, it is important to engage an architect / designer who has the expertise to design a space to support the long-term business model of your practice. That means the design team should have a solid healthcare track-record with an expertise in:

  • Lean principles as well as Evidence-Based Design. The Lean design principles are oriented towards efficiently matching design with patient flow and the process of delivering services. Evidence-Based Design has to do with basing design decisions on credible research about achieving best outcomes for the patient. Understanding both is important.

  • Planning to a budget. It is advisable to select a team that can help you pre-think what is important when faced with a budget (i.e. function vs aesthetics, materials selection, etc.)

The design and function of your office can be a competitive advantage – it starts with you viewing the experience of visiting your office through the eyes of your patients. The next essential step is to engage the best design team. The best design team is the team that understands your business and has the expertise to custom- design a space to: (a) optimize the patient experience - for your patients, (b) integrate functional design flexibility – making it easier to accommodate changing business models, (c) adhere to budgetary constraints, and (d) optimally match the functionality of space with the workflow of your practice.

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