Many healthcare facility projects suffer from “scope creep,” a phenomenon where a project becomes too large for reality as it passes through every involved party's list of demands. Unchecked, this leads to the construction of overbuilt medical facilities that do not receive the number of cases necessary to sustain themselves, according to experts.
“I would say that nine out of 10 of the first discussions we have with healthcare systems involves something three or four times bigger than what we would do in that particular location,” Emerus Executive Vice President of Strategy and Development Vic Schmerbeck said at Bisnow’s State of Dallas Healthcare event.
To prevent over-investing in a property, developers say strict attention to analytics is key from site selection to build-out.
United Surgical Partners Senior Vice President of Acquisitions Michael Stroup said people tend to get in trouble when they are married to the idea of starting a project in an area where the fundamentals are declining and the market is compressing.
For Nexcore Group Managing Director Nathan Golik, preventing scope creep means planning. Having a lock on the purpose of a facility and its volume of activity goes a long way in halting the tendency to build bigger than the market can handle. Golik said developer healthcare partnerships should know before a project even begins how many cases will come through, what type they are, what operating expenses will be and any other metrics that factor into the prospective success or failure of a healthcare facility so as to avoid the “field of dreams” mentality (build it and they will come) and mitigate the chance of failure.
Golik said data analysis is being used more often in determining service area, operational strategy and what services to offer. But he thinks it will start to go further.
“I think there is a whole different use of analytics that we see as being a requirement of being able to work with our health service partners. We cannot just pick a Main and Main location and try to explain it. You have got to have fundamental analysis around why you are going where you are going,” Golik said.
