Often when doctors or investors are considering investing capital into a new medical construction or fit-out, the decision has been floating around for quite some period of time. Rarely do we find that these decisions are off the cuff. It might be that your current practice is looking tired or run down. You might have seen a drop off in patient number or simply you might be seeing an opportunity to build in a new suburb which lacks an established medical practice. Regardless, there are plentiful considerations that play a crucial role in stepping forwards. These benefits can be categorised as tangible and intangible benefits.
COST SAVINGS
Its an oxymoron putting investing and cost savings in the same sentence, but in fact this can be true. Investing money into a well designed medical practice or medical fit out can actually save you money. Efficient lighting can reduce utility bills. Efficient workflows can reduce employment costs. Reduced wait times can reduce patient attrition. Cost savings are hard to value but in reality this is a huge consideration when considering investing into a medical improvement.
INCREASED REVENUE
We have all driven past a run-down medical practice, veterinary practice or even a dental practice and silently said to ourselves “I wouldn’t attend that practice”. The visual pull that an up to date medical practice has can not be measured in dollar value, but we are aware that other than referrals from family and friends, the visual façade of a building is the next biggest draw card for patients.
Patients are clearly more willing to choose a healthcare provider that has a modern, clean, welcoming environment. The return on this investment can not be underestimated.
Furthermore, newer medical practices often integrate new technologies and can often offer additional related services that increases revenue. This can be seen in many medical practices now days having podiatry or pathology services etc. Having additional allied health services in one building is a huge benefit to patients.
REPUTATION
Investing into a new medical construction or medical fit out will only improve the clinics reputation. We have never seen a clinics reputation be effected negatively from investing in the future. Any negative reputation usually stems from poor staff interactions – never investing in a tangible benefit.
A good reputation for a clean well-organised, calm, friendly, well laid out clinic will only help with patient referrals. We all love to refer a loved one to a clinic where we have had a good experience. This intangible benefit can not be underestimate. A clinics reputation contributes to its goodwill.
FUTURE VALUE
While investing in a new medical clinic or a fit out can be significant, you should consider the long-term benefits and not just the short term benefits. A good quality medical fit out will have a longer life span. This requires less capital investment overtime through repairs and replacements. The re-sale value of the medical clinic will also hold its value for a greater period of time. If you have built in growth area, this could result in an investment that might out perform term deposits.
RISK MITIGATION
Another factor that is hard to value is the ability to avoid unforseen breeches of care. Investing in a well laid out medical facility may avoid any regulatory non-compliance and in turn you could avoid rather lengthy legal battles. The cost of a lawsuit and the personal time invested in fighting legal proceedings can be hugely costly to a medical practice. Investing in a state of the art medical construction or medical fit out can protect the financial interests of the healthcare provider and contribute to the overall Return on Investment.
OTHER BENEIFTS
Other intangible benefits of investing in a medical construction are things like improved staff morale, improved patient outcomes, positive work environment for professional staff, better patient experience and more.
Ultimately, calculating the return on Investment of a medical fit out or medical construction requires an analysis of both tangible and non-tangible benefits for both the long term and short term. It might mean that you will have to engage an accountant or other finance professional to help.
For some good reading please see our case studies for more food for thought and or contact us today.
