As we approach the new year, now is a great time for your medical group to review the past year, and take steps toward the year ahead.
At Catalyst CRE, we use our PCOM Process to plan, create, optimize and maintain healthcare practices and facilities. Using this process as a guide, here's a checklist of 17 things you need to do to get your practice and facilities ready for 2017:
Plan
Develop a practice business plan. Now would be a good time to begin a review of your practice's business plan. A well-structured plan can help your practice in both short and long term. It will give you an organized process to better identify your mission, values, goals, challenges, opportunities and strategies and help you move forward.
Review market data and patient demographics. As you begin to work on your practice business plan, research your region's market data and patient demographics in depth. A competitive analysis identifies competitors' strengths and weaknesses and helps you implement better strategies to improve your advantage. Consider your patient and payer mix, as well as a hub and spoke strategy for an integrated healthcare facility network.
Consider physical space needs for practice growth. As the care delivery model continues to evolve over the next few years, so will your practice's physical needs. You'll need more buildings to house your healthcare services such as doctors' offices, surgical suites and clinics. Now is the time to start outlining your plans for sustained growth. Allow time to assess and quantify your space needs to handle the patient load. Explore whether leasing, building new or rehabbing is right for your organization. Then, identify sources of capital to fund those projects.
Create
Approach your real estate uses strategically. Ever been frustrated sitting in a traffic jam caused by a bottleneck? It's understandable to have this problem on the highway, but not in your facility. If you can eliminate these bottlenecks, you can increase efficiencies and patient turnover. Consult with an architect who specializes in healthcare design to help you improve your space.
Consider a preferred developer program. Your goal is to focus on your patients. To do that, we recommend building a strategic partnership with a real estate developer. Find someone you are comfortable with, but who also understands your business and competitive strategy. The right team can proactively seek opportunities as you continue to grow. Speed to market with a more turnkey approach provided by a preferred developer program is critical.
Assemble your construction team in advance. A critical element in healthcare construction, whether new or renovation, is to assemble your team as early as possible in the process. Choosing an architect and general contractor early allows you to know the costs as the project is being designed. Work from a strategic plan that includes coordination of funding, design, construction and strong project scopes—all while allowing care to continue.
Review existing property use efficiency and capacity. As practices look to become more energy efficient and sustainable, one trend is to occupy smaller spaces. Begin with a space audit. Carefully examine your space to see where you can make do with less. Often this is best done by a neutral outsider who can assess your space use and your work flow process. They can evaluate the path your patients need to follow from entry to exit.
Use more "green" principles. More practices are conserving energy, reducing water consumption and minimizing waste to help the planet. But they are also doing this to reduce operating costs as well. Analyze the financial benefits over the long run to justify the upfront costs to management. Two examples on how you can save in the long run include HVAC and electricity. Your HVAC should be a VAV (variable air volume) system, functioning based on user demand, rather than blanketing the facility with uniform temperatures. Also, electricity usage should be limited by use of solar heat where possible.
Optimize
Conduct an internal insurance audit. You need the right insurance policy to protect your practice. You also need to know how it works and whether you're getting what you're paying for. An insurance audit can examine your current policies and procedures and identify any problems now before it's too late. An audit is a small investment of time and money spent now to avoid having to spend triple the amount down the road.
Ensure compliance with Stark Law. Stark Law was intended to curb perceived unnecessary referrals and over-utilization of services by physicians within groups or at facilities with which they have ownership or financial interests. You must comply with all elements of the Stark Law Office Space Lease exception, but you also need to be careful to justify the fair market value of the lease amount. Further, you must demonstrate that the lease amount in no way accounts for the volume or value of referrals between the parties. It can get complicated. At the minimum, we recommend a Stark Law checklist before entering into any type of financial arrangement with a referral partner.
Understand your lease terms. The primary sources of disputes in medical office buildings are a misunderstanding by medical practitioners about the terms of the lease and refusal of special requests made to landlords. The best way to resolve these disputes is to confirm that your lease is very clear on these types of issues when it is signed. Removing ambiguity from a lease so that there are no questions about rights and responsibilities is a good business practice for both the tenant and landlord.
Evaluate your service providers. Are you getting the best prices from your existing vendors? We recommend sitting down with your current vendors and brainstorming on how to reduce costs. For example, you might be paying for routine services on a frequency that no longer makes sense just because it has always been that way. In addition to cutting back on the frequency of these services, some vendors are willing to be flexible with payment terms, which can help your practice cash flow and avoid standard late fees.
Of course, don't rule out putting your services out for bid again. If you do this, talk to your colleagues to find out who they use and include them in a bid process.
Examine purchasing habits. Supply costs can overwhelm a medical office. To minimize supply costs, seek assistance from your hospital purchasing department. If you are not affiliated with a hospital, consider joining a group purchasing organization to take advantage of group discounts for medical and office supplies. For instance, since vaccines represent one of the largest expenses in primary care after personnel costs, a pediatric practice may realize substantial savings on vaccines if they join a group purchasing organization.
Maintain
Practice preventive maintenance. Having a comprehensive preventive maintenance program is essential to extending the life cycle of your equipment, reducing costs and optimizing your staff's productivity. Pre-season maintenance can help you to avoid a system failure in severe hot or cold weather when you need it most. It can also keep your energy bill from spiraling out of control. We recommend a minimum of quarterly preventative maintenance check to your HVAC system. In high volume healthcare clinics, it's best to have this service completed on a monthly basis.
Identify and fix any safety issues. Any time you can prevent something, your costs will be less than recovery. Yet few medical offices are willing to invest in prevention and end up paying more in recovery. Bring in a safety or environmental services expert to examine your medical space thoroughly and objectively. If there are any dangers embedded in your practice you are not aware of, they'll find it.
Remove barriers. Under the ADA, you have an obligation to remove barriers to accessibility to the extent that the removal is readily achievable. That means it should be easily accomplished without much difficulty or expense. Examples include widening doors, striping accessible parking, installing Braille signs and putting up grab bars. The ADA holds both the lessors and lessees responsible for ADA compliance. Hire an ADA expert to inspect your property to ensure compliance.
Inspect your office for wear and tear. Appearances are important to your patients, especially in the waiting area and exam rooms. If the waiting area is fresh and new in appearance, then the patient assumes that their care will be state-of-the-art and up-to-date as well. For most inspections, an office manager can easily do the job. Some properties or inspections might require a third-party healthcare design firm. Be sure to ask your landlord about their access to an environmental services manager or facilities manager to thoroughly inspect your office in addition to other third-party inspectors you interview.
Moving forward, 2017 will certainly be an interesting year in healthcare, with a new President and likely reforms to the Affordable Care Act. We recommend that you start your 2017 the right way. Plan, create, optimize and maintain your healthcare facility network with these 17 tips, and send us your own ideas or suggestions at info@catalystcre.com.
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Chad Henderson is the Co-Founder and Chief Executive Officer (CEO) of Catalyst CRE. He has led Catalyst CRE in guiding hospitals, integrated healthcare systems and specialty providers of all sizes in planning, creating, optimizing, and maintaining their healthcare real estate assets.
The views, opinions and positions expressed within these guest posts are those of the author alone and do not represent those of Becker's Hospital Review/Becker's Healthcare. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.