5 Steps to Optimize Your Healthcare Location Planning Process

5 Steps to Optimize Your Healthcare Location Planning Process

There are many well documented best practices for healthcare facilities planning that focus on the design and construction aspects of the location. But what other factors do you need to consider for maximum return on your healthcare organization’s real estate investment?

Whether you are a health system considering a new multipurpose facility or a specialty healthcare provider trying to grow your location network, remember these five important steps the next time you plan a location.

1. Establish a Clear Vision for the Location

It may seem obvious, but before you begin planning a healthcare facility, you need to understand its intended purpose. Identifying your overarching goals before beginning the design process prevents having to retrofit later.  

Questions to ask include the following:

  • What services will you offer at the location?
  • What metric of performance will be used to determine if a location is “successful?” Is there a minimum number of visits or a revenue threshold you need to achieve?

Once you understand your goals, you can identify the available real estate that best allows you to meet those goals and provide clear direction during the design phase. 

2. Plan for the Future

While it’s important to establish a vision for how the location will be used today, consider how needs may change over time. It’s a good idea to plan locations in a way that allows you to adapt the space for different specialties or subspecialties.

Remember, just because the facility is in the perfect area for your planned services today doesn’t mean it will still be the right location in 20 years. Trade areas shift over time, so plan ahead to maximize use.

3. Weigh the Costs of New Construction Versus Existing Medical Buildings

There are pros and cons to both new construction and existing medical buildings. Regardless of the approach that is best for your organization and your market, consider the full cost of preparing the location for use and compare that to your performance forecasts to determine if the investment makes financial sense.

If you decide to repurpose an existing medical facility, remember this: just because a medical facility operated in the area before doesn’t necessarily mean the area is good. Conduct your own research to determine potential.

4. Evaluate the Site Based on Retail Real Estate Fundamentals

Patients are increasingly viewing healthcare with a consumer mentality, so convenience and accessibility are critical. Take a retail approach to site selection and evaluate your prospective site based on screening questions such as these: 

  • Are there enough of the right types of consumers in the trade area to support a successful location?
  • What is the existing supply of providers (competition) in the trade area?
  • Is the site easy to access? Does it offer sufficient parking and/or proximity to public transit in highly urban areas?
  • Does the site have good visibility from the road for signage?
  • Is there strong area draw around the site – which is especially critical for services such as urgent care?  

5. Determine Your Location's Launch Plan

While most of the facilities planning process focuses on site selection, design, and construction, another important aspect of the process should be the location's launch plan. It’s important to begin marketing early to raise awareness of the new location that will open soon.

Depending on the type of facility, it may make sense to conduct targeted direct outreach to potential patient households. This approach can be especially beneficial for retail-style specialty healthcare providers that rely less on referrals than traditional health systems.

The Bottom Line for Facilities Planning

The facilities planning process is a time intensive, yet critical, aspect of a healthcare organization’s growth. By determining your goals in advance, considering future uses, fully weighing the cost of investment, evaluating the site based on retail fundamentals, and creating a launch plan, you can maximize the return on investment for each new healthcare location.

Want to learn more about optimizing your real estate planning? You may also enjoy our blog on the 5 Pitfalls of Healthcare Real Estate Investment.