March 2-March 15, 2016
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COLORADO REAL ESTATE JOURNAL
— Page 9B
A
mong the many
fundamental
decisions every
medical practice must make
is whether to locate on a
hospital campus. There are
a variety of considerations
that may prove useful. Over
the last 25 years, our firm has
worked with a broad range of
medical practices, and we have
learned a great deal about
their motivations for choosing
one over the other. If you’re a
practice manager or otherwise
in a position to evaluate
an office move, we hope to
illuminate on-campus versus
off-campus alternatives.
3 Reasons To Be On Campus
1. Location.
The public knows
where the hospital nearest
their home or workplace is
located. Affiliation with a
hospital is beneficial from a
location perspective alone. In
addition, there are pragmatic
advantages of being located on
the hospital campus where the
physician has privileges – easy
access, short commute times
and easy consultation with
other physicians.
In our experience, patients
experience a psychological
comfort when they know that
the practice is located at the
hospital. When your patients
are aware that your practice is
conveniently located adjacent
to the hospital, they can feel
the sense of legitimacy (and
borrowed credibility) that goes
along with the institutional
nature of the hospital.
2. Community.
A community
is created within the medical
office buildings on a hospital
campus, bringing tangible
benefits to patients and
physicians. As doctors become
more highly specialized, the
ability to refer a patient to
another specialist who happens
to be on the same campus
can make patient care less
complex.
Higher rates of referral also
can lead to increased levels of
trust among physicians and can
lead to improved outcomes.
Also, the practice may have
access to hospital services such
as labs, X-ray facilities and
outpatient surgery centers.
This can be cost-effective and
convenient for patient and
practice alike.
3. Travel.
It’s worth pointing
out that travel time is greatly
reduced for physicians and
patients when a practice is
located on campus, especially
for practices whose patients
may spend time in the hospital.
Time is money.
For example, a surgeon
who doesn’t have to drive
30 minutes each way to the
hospital simply will have more
hours in the day to devote to
patient care. The resulting
efficiency is likely to translate
to an improved bottom line for
the practice. For the patient,
being on campus facilitates
easier transportation between
clinic and hospital.
However, being on campus
isn’t for everyone!
3 Reasons To Be Off Campus
1. Cost vs. Quality, Location.
Medical office space can be less
expensive off campus. There
are many reasons for this,
but generally it’s a question
of supply: There are more
options off campus. Lower-cost
options are available if you’re
willing to make sacrifices. Less
desirable locations may be one
contributing factor, as well as
other sacrifices such as lower-
quality, older buildings or
buildings that are ill equipped
for medical use.
In some cases, it may make
sense to do whatever possible
to reduce occupancy costs
in your practice. However,
it’s always worth it to run the
numbers – the additional
patient revenue from referring
physicians in addition to
the time and travel benefits
of close hospital proximity
may sufficiently offset any
reduced rent from an off-
campus location. We always
recommend looking at the
total costs associated with a
suboptimal building or off-
campus location.
2. Navigation.
Some hospital
campuses are confusing to first-
time visitors and new patients.
Navigation can be tricky when
compared to an off-campus
building with a street address.
If the practice requires a
specific geographic area, a
relevant campus may not exist.
For example, you may run a
pediatric practice that serves a
patient population many miles
from a nearby hospital, which
may make it impractical for
your patients to travel to the
nearest hospital for routine,
nonemergency visits.
3. Retail?
Some practices
may desire a more “retail”
feeling and presence. A walk-
in urgent care facility might
locate in a suburban strip
mall or a dental practice in a
downtown core – practices like
these may benefit from being
located away from the hospital
or at street level.
Remember that a medical
practice is a business, and
every business has different
priorities. Determine your
priorities. Make a list of what
matters most to you and to
your patients, including where
they are located, who they are
and what matters to them.
Consider if your practice relies
more on referrals or walk-in
patients. And consider if there
are patient benefits to being
close proximity to hospital
services.
Then look at the big
picture, total costs per square
foot for your office space,
travel times to and from the
nearest hospital, and potential
patients nearby. Even a sizable
difference between on-campus
versus off-campus rent can be
made irrelevant by the benefits
of an on-campus location.
These factors will guide you
to the right decision for your
practice.
Glen Sibley
President, Fleisher Smyth Brokaw,
Denver
