Mark Samples, president of Prime Healthcare Properties in Huntsville, Ala., provides five best practices for physician-owners planning a de novo ambulatory surgery center.
1. Consider a medical office building. Surgery centers benefit from a synergy of services when located in medical office buildings that include physicians' offices, imaging, physical therapy and labs. Patients and physicians like the convenience of having complementary services nearby. In this configuration, "everyone is enhancing everyone else's business," Mr. Samples says. "The building becomes a one-stop source of services related to surgery." Six of his last seven ASCs were multi-tenant specialty-use medical office buildings.
2. Research the intended site early on. Scout out the proposed area for your ASC very early in the planning process, before any commitment is made. The neighborhood could become more desirable or less desirable for patients with the addition of a major highway and new schools, for example.
3. Avoid unfriendly jurisdictions. Zoning requirements and other local regulations, which can slow down development, vary widely from one jurisdiction to another. By researching them early on, you can avoid municipalities that bury projects in red tape. A friendlier jurisdiction might be located as little as a few hundred yards away from the originally planned location.
4. Buy adequate acreage. The key during site selection is acquiring the most efficient site available. "If you acquire too much land, the land load will raise total costs per square foot of your building, creating an inefficient project with high occupancy costs," Mr. Samples says. "If it is too small, it will constrict operations and hinder the project's growth potential." As a rule of thumb, buy one acre of land for every 10,000 square feet of building and allow for 5-6 parking spaces for every 1,000 square feet. Provide landscaping and plan for complimentary users.
5. Expect a long-term lease. ASC developers like Mr. Samples plan to execute a 15-year lease with physician-owned ASC partnership. "The longer the lease, the better," he says. When physician-owners demonstrate commitment to the project, lenders will offer more favorable terms.
Learn more about Prime Healthcare Properties.
Read more about ASC development:
- 5 Ways a Surgery Center's Location Impacts its Business
- 5 FAQs on Surgery Center Development
- 5 Significant Surgery Center Development Mistakes