Size matters in medical practice space selection

Healthcare leaders are often asked to make tough decisions that impact the future of a medical practice for years to come. One such challenge happens as soon as they are faced with the goal of determining the space needs of a new practice location or looking at an existing practice to “right-size” the square footage based on a data-driven objective analysis.

In my 20-plus years working in healthcare I have opened, moved and expanded numerous office locations for many different medical specialties. Generally, there are two main questions that come up in the beginning of that process:

1. How many square feet per provider is needed?
2. What are the practice’s growth goals for the future? (Nobody wants to end up out of space within a year or two of opening.)

Many administrators use their best guess based on their experience to estimate what the space needs of a practice will be. I often heard the suggestion of 1,000 to 1,500 square feet per provider regardless of practice specialty as a starting point. While this guesswork may work to fulfill the needs of some individuals, there is a much better way to determine this answer while taking into consideration the intricacies of each type of medical practice specialty.

Benchmarking the square footage needed per provider using data will get us exactly what is needed. Different specialties have very different space considerations and needs. For example, an OB/GYN practice often requires additional space to accommodate ultrasound procedures, NST tests and sometimes additional bathrooms for patients. Alternatively, an orthopedic practice often needs dedicated space for X-ray equipment in addition to the usual exam rooms, offices and other standard areas.

MGMA DataDive Cost and Revenue includes the median square footage per full-time-equivalent (FTE) provider/physician, allowing you to pull the exact data you need to calculate the space you need based on each specialty. Armed with this benchmark data, you should determine a provider count, which should include any future growth goals, to end up with a solid square footage number needed for your organization.

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This comparison to the benchmark data is especially important when administrators are adding a practice location for a medical specialty they haven’t worked with before or for any brand-new greenfield/startup practice where there is no existing practice location data to consider. At a minimum, this data review will ensure that a practice is right-sized and offers strategic insights on future space needs to leaders.

It’s also important to take into consideration the productivity of the practice providers, as space needs can dramatically increase when the provider productivity does. Highly productive providers often need additional exam rooms, space for extra clinical support staff and even a larger waiting room to accommodate the needs of their patients. The MGMA data allows you to align the square footage with the forecasted productivity of your providers, whether that is above, at or below median.

After identifying the necessary square footage for your practice, you can then work on the selection of your space and planning needs. MGMA also can assist with benchmarking median practice expense and other considerations following the space selection via MGMA DataDive, as well as tools, such as a pro forma template to assist with the cost analysis associated with a new practice. Using benchmarks and data is critical to the long-term success of any practice to control expenses and increase efficiency.