Wolgast Blog

Patient Flow Optimizes the Design of Your Practice Floorplan

Posted by Cory Sursely on 8/16/2021

When a patient walks through the door of a doctor’s office, whether it’s a family physician, chiropractor, dentist or veterinarian, he or she needs to easily find the check-in area to make his or her attendance known.  Patients may not know that check-in area starts off a whole path that they will follow while receiving treatment through paying their bill, also known as patient flow.

Architects that are specialized in medical office design closely analyze a practice’s patient flow to determine the location of rooms and activity areas in a practice.  An office that is inefficiently designed can cause unnecessary delays or bottlenecks in the care of patients, problems complying with HIPAA regulations, miscommunication among staff members, and possibly a frustrated doctor.  An orderly and well designed patient flow has patients moving in a circular motion, so patients don’t have to back track nor cross paths with other patients.  Doctor and staff are able to easily locate each other to communicate effectively and supply areas are easily accessible by staff members for quick set-up of rooms after each patient visit.

Wolgast Architect and medical office design expert, Rick Keith, offers two design examples, below, based on the size of your practice needs and the patient flow theories behind each.

New Construction of a Small Medical Office Small Medical Office Design

In smaller offices, a single hallway is typically used.  Although not preferable, it reduces the size of the building and the cost of construction.  The hallway should be wide enough that patients can pass each other in opposite directions, especially patients with wheel chairs or walkers.

A check-out alcove should be created so patients stand or sit out of the hallway.  Often, this alcove area is also where personal information may be gathered, if needed, from patients while they’re checking in.  Staff should be careful to avoid having two patients giving personal information at the same time.

 New Construction of a Large Medical Office

Large Medical Office Design 

In a larger office setting it’s desirable to circulate patients one way around a central business/support core.  This circular pattern avoids a bottleneck with personal intake (check-in) and check-out.  It also avoids privacy (HIPAA) issues with patients standing together giving personal information.

At the reception window, it’s preferable for a patient to avoid verbal communication with staff members.  Many offices prefer patients write their name to check-in.  The receptionist then marks through the name to avoid other patients from seeing it.

It’s preferable to have a patient step inside the door separated from the waiting room to give personal information.

Our team wants to design and construct comfortable, relevant and efficient spaces for you to provide patient care.  Please share with us any thoughts you may have about improving your practice.

 

Medical Services

Tags: Medical Office Construction, Design/Build, the Wolgast Way, Dental Office Construction

The Best Method to Build Light Commercial & Light Industrial Buildings

Posted by Cory Sursely on 8/4/2021

MetroInfusion3Light Commercial Buildings include (but aren’t limited to) medical practices, dental practices, office buildings, restaurants, banks, auto dealerships, and generally any building that is 25,000 s.f. or less and used for commercial business.

Light Industrial Buildings include, but not limited to (as defined by National Institute of Building Sciences -11/5/19), “space types used for assembly, disassembly, fabricating, finishing, manufacturing, packaging, and repairing or processing of various types of materials…spaces for printing, commercial laundry, film processing, vehicle repair, building maintenance shops, metal work , millwork, cabinetry work” and warehousing. Also the light industrial buildings are typically not over 2 stories tall.

Construction for these types of light buildings are best suited to use Wolgast’s Three Phased Design/Build Services among our construction delivery method options. Projects that are bigger in square feet or that would take a long duration to construct, (typically more than a year) are better suited to use our Construction Management delivery method.

We work with partner Architects that are licensed and highly skilled to create visually attractive and efficiently adept spaces to house either light commercial or light industrial operations. They will meet with the building owner for a needs analysis to determine specific usage and their style to create an elevation and prepare other Preliminary Phase I Documents. We use these documents to determine early cost budgets to present to an owner, so they can make an early and educated decision about their investment.

There is a nominal fee for this early pricing, but during Phase I, much preliminary work is done to advance the speed of the project should the owner decide to move forward to Phase II - Design. The benefit is that the owner doesn’t have to pay for a complete design that ends up being over budget and they will be further ahead in their schedule when it comes to the final design phase. Owners will have solid budget information earlier to determine if the project is feasible than if they used the traditional design/bid/build method.

If the project moves forward, our Design Team completes the full design documents in Phase II – Design along with our Estimators completing final estimating, securing a minimum of two to three bidders for each trade. From here, the owner gets a guaranteed price and completion date. Building owners will know exactly what to expect during construction. This is the biggest benefit of the Design/Build process for light building owners.

This leads to Phase III – Construction. The prior two phases allow us to be ready to start construction with our team, materials and permits already ordered ahead of time. Plus with the Design and Construction Teams working together during the Phase II - Design, plans have already been reviewed and checked for issues translating them into applied Construction. We are solely responsible for getting your light commercial or industrial building completed as expected.

Design/Build is an alternative delivery method to General Construction, which typically takes longer to get through all of design, estimating, permitting, material ordering, and then to construction. With Design/Build an owner of a light commercial or light industrial building gets earlier pricing information, a guaranteed price, and an advocate to complete their building with the most value.

Additionally, companies that typically reside in a light commercial or light industrial building are the same candidates for SBA 504 Loans, which are a great opportunity to fund construction projects. Under this program, the loan requirements include 10% down by the business owner, 40% low interest, fixed loan for 20 year duration by the SBA’s Certified Development Company (CDC), and then 50% from an approved financial institution. Qualifying companies must have been in business for 2 years, have a net worth less than $15M, and an average net income less than $5M. The SBA 504 funding source is designed to assist established, healthy, expanding businesses purchase land, building, machinery or equipment, make land improvements, complete construction activities, or make leasehold improvements.

Michigan Business Owners, call 800-WOLGAST to schedule your free assessment to get your project started or use the link below.

FreeAssessment

Tags: Medical Office Construction, Design/Build, Auto Dealers, Financing Construction, Dental Office Construction, Manufacturing Construction

How to Design an Office for Patient Centered Medical Home

Posted by Cory Anderson on 7/13/2021

GFPSince the Patient Centered Medical Home (PCMH) is more of a management model or philosophy, you may not have considered the building design changes that may be necessary to make the conversion.  Below we discuss some of the elements that your PCMH office design should consider.

2021 Updates

We first wrote this blog prior to Covid-19 and the growth of telemedicine and have a few new remodel suggestions for post pandemic medical offices.  While, digital healthcare may remain an option, which could reduce the number of patients coming to your physical location, space in your waiting area as people continue to distance from each other may need a new layout/design.  Also a designated space to conduct your telemedicine calls, especially when bringing in specialists, as part of your PCMH operation, could be helpful for your practice to effectively provide services.

Storage Space

Electronic Medical Records are a key tenet of the PCMH model, however as practices transition into PCMH offices, one could expect to increase file storage requirements due to the added patient education and follow up.  Additionally, you’ll be accumulating the documentation from each visit your patient has with a specialist or key staff member inside or outside your office and therefore your space requirements will need to be addressed in physical space or specially designed spaces, such as climate controlled areas that accommodate computer servers and databases.

Meeting Space

Collaboration is another key of the PCMH model.  Practice doctors and staff members will be having meetings among themselves about their cases as well as consultation meetings with specialists, group meetings held for patients with similar conditions, and patient education sessions.  All of these types of meetings will require private and comfortable space to allow for most optimal conditions for patients, and for easy patient access.

Privacy Measures

With additional files and open areas for communication comes more responsibility for patient privacy and HIPAA compliance.  The design of your building will need to account for the privacy of verbal communication and protection of patient files.

Spare Exam/Treatment Rooms

We have recently completed the construction of a large PCMH office which included in its design additional exam and treatment rooms for visiting specialty doctors, so they can come to the patient rather than having the patient travel to the doctor.  This is a clear benefit to serving your patients with the PCMH model.

Dr. Michael Shepard, M.D., Ph.D., Wolgast Corporation’s medical office development specialist, along with Rick Keith, Wolgast Design Group’s architect experienced in designing for PCMH, can provide insight in the designing of an office remodel or a new building.  Contact Dr. Shepard at 800-965-4278 to discuss the design and construction of your next building.

 

 

Medical Services

Tags: Medical Office Construction, Design/Build, Professional General Contractor, the Wolgast Way, Design

You Have Construction Service Options

Posted by Cory Anderson on 7/6/2021

constructionWhich construction delivery system is best for your project?

There are several unique and distinctive methods for providing construction solutions. As a business owner you have the luxury of selecting the most beneficial and appropriate delivery system for your type of project.

Design/Build

The Owner hires one firm to provide architectural design and construction services in a phased approach.  The design/builder becomes the single-source that is responsible for designing the building, estimating the budget, hiring the subcontractors and coordinating the schedule to ensure the project is completed on time and within budget.

It’s the design/builder’s sole responsibility to complete the project to the client’s satisfaction.  The architect and contractor are the same entity, which eliminates misunderstandings as they collaborate throughout the design process.  The design/builder becomes the owner’s advocate securing multiple bids for each trade and leading them through site planning, permitting, design, value engineering and construction.  The phased approach provides economical/budget information early for the owner to decide if the project is a go or no-go.

Design/build is suitable for busy owners who don't have the time to oversee construction.  It’s also a fast-track method or a fast construction process for projects with a tight schedule.

Construction Management

A construction manager’s (CM) role as part of the project team is to provide estimating and constructability review during design, and cost, time and quality control during construction.  The client establishes their team of architect, CM and owner’s representative at the onset of the building concept.  The architect is responsible for defining the building through drawings and specifications while the CM regulates and monitors the schedule, budget, materials and performance of the subcontractors.  The owner thoroughly informed by these professionals, can then make educated decisions about his or her project.

The owner must be willing to be involved in the process because by using the CM method each trade contract is signed with the owner.  The CM method is most suitable for those who construction is a recurring activity and/or their project is very large, like schools and retail chains.

General Construction

Considered the design/bid/build method, the owner typically already has plans which were prepared by an outside architect/engineer when they seek a general contractor.  They choose their general contractor by one of three methods, 1) negotiating with one or more contractors of their choice, 2) selecting a group of contractors to bid and then accepting the lowest bid, 3) advertising for a broad variety of bids and accepting the lowest.

For clients who have a simple construction project, general construction is likely the appropriate construction solution.  It’s also the right choice when it’s necessary to bid and then build a project based upon completed plans and specifications.  However, this method leaves little room for correction of design or programmatic errors, if any exist.

Leaseback

The contractor finances, builds and leases a new facility back to a qualified owner, allowing him or her to focus on his or her business.  This is the best option for businesses that are faced with the need to expand their floor-space while at the same time minimize the risk involved with tying up capital in construction costs.

Business owners who qualify and currently have all their working capital in their business without a budget for building their new space are candidates for leaseback.  By choosing leaseback, they can move their business to a prime location and get the space tailored to their design needs.  The owner has the option to purchase at a future date when the business warrants the investment.

Still not sure which one works best for you? Call us to discuss your options.  At Wolgast Corporation, all systems are in place to provide the most appropriate delivery method. 

Tags: Medical Office Construction, Design/Build, Professional General Contractor, Schools, Construction Management, the Wolgast Way, Restaurant Construction, Leaseback, Dental Office Construction, Manufacturing Construction

Certificate of Need and Your Design/Build Contractor

Posted by Cory Sursely on 11/24/2020

Ambulatory Surgery CenterUpdated 11/24/20: The controversial Certificate of Need (CON) program in Michigan is in question through several new bills that passed the Michigan Senate in February 2020.  It has yet to be decided in the House.  The debate has been ongoing and seems to be getting more and more heated with those against it arguing for an open market approach to drive down cost and those for it are claiming that the medical industry needs to be regulated to keep a high standard of care at an affordable cost.

Furthermore, as we hear in the news more often, medical groups are having difficulty securing their CON in saturated Metro Areas of Michigan because a premise of the CON has been to drive medical care to regions where there is less medical access.  A positive note is, due to regionalism and urban sprawl, there are new populated pockets where medical services are less saturated and CONs are still available.

As a Design/Builder that has been through the CON process several times with our medical group clients, we wanted to offer you some insider tips to getting through the application.  First and foremost, it’s important to build your team of CON/Design/Construction experts before you even look for your property.  Enlist your CON consultant and contractor to help you find an area that has CON capacity and also will accommodate your building/parking lot size.  Additionally, you’re architect plays a big role during the application period as you’ll need to submit schematic drawings, project narrative, site development plan and design fees, in the CON submittal package.  The contractor provides the estimated cost of the project, which is also required with the application.  And, obviously, having a CON consultant on the team provides an expert when navigating around the requirements and bringing all the necessary documentation together with accuracy, so that there are no setbacks from missing or incorrect information during the application process.  It could save you two weeks or more in your review time and provide insider know-all advantages.

When you work with Wolgast Corporation as your design/build expert, we already have an established team of architect, engineer, medical construction specialists and CON consultant that have been through the CON process together.  We’ve helped doctor groups find suitable locations with available CON credits and also with renovations, additions and new builds to help them grow their surgery centers.  Through our Design/Build construction service, we satisfy all necessary requirements to help you move through the application process as efficiently as possible.

Learn more about our Design/Build construction services below, or call Dr. Michael Shepard to discuss how we can help you expand, 800-WOLGAST. 

Design/Build  the Wolgast Way

Tags: Medical Office Construction, Design/Build, the Wolgast Way, Design, Good for Business, Risk Management

New Ways to Add Infection Control to Your Healthcare Office

Posted by Cory Sursely on 7/21/2020

doctor-1149149_1920Medical and Dental practice owners you’ve taken a big hit same as most other industries due to the Covid-19 shut down. You’re still fresh to reopening and making the extended measures to provide infection control and start treating patients safely again. Your building facility can be made more effective in protecting staff and patients better, including tools for surface cleaning, aerosol infection control and social distancing.

Learning how to provide services over telehealth tools was likely a “fun” and necessary exercise to treat your patients during the stay-at-home order. Now that you’ve got the hang of it, offices are reopening and incorporating the CDC guidelines to manage infection control. The CDC’s1 steps include:

  • Educating staff
  • Communicating with patients (placing reminders for social distancing and hand washing in your facility)
  • Wearing Personal Protective Equipment
  • Installing ventilation systems to eliminate the aerosols that escape from the mouth, eyes or nose
  • Integrating easy to clean barriers in open spaces
  • Installing UVGI lighting
  • Removing magazines and toys (or other unnecessary items that could be touched in public areas)

You may be wondering how long you can sustain ongoing surface cleaning, social distancing and what you should do with those magazine subscriptions. Especially with some cleaning supplies and PPE in high demand and the varying level of concern by your patients. We have found other tools and materials with which you may not be familiar. These could be helpful in elevating the cleaning and distancing you’re already doing.

You may be aware that UVC Light is useful in sanitizing unoccupied rooms. That’s why the CDC recommends UVGI disinfecting light as an option for cleaning your unoccupied treatment rooms. However, the light is harmful to skin and eyes when exposed/penetrated, so it is critical that the room is empty of people when in use.. Recent, new findings by Columbia University have filtered the Far-UVC light from the UVC as a potential option for cleaning occupied rooms – emphasis on occupied. The wavelength range of the Far-UVC are shorter and don’t penetrate into the top dead layer of skin, or outer layer of the eye, but still are able to destroy the bacteria and viruses. Being able to use it in occupied rooms, they claim, “will prevent the airborne, person-to-person transmission of pathogens such as coronaviruses.”2 When the results are confirmed, researchers believe that it will be great to use in “hospitals, doctors’ offices, schools, airports, and airplanes” to fight transmission of germs.

Additionally, conducting ATP testing can measure the cleanliness of surfaces. In high traffic or shared spaces, the tests can tell you quickly if you are cleaning adequately. It evaluates the cleaning practices and “can be a useful tool to measure the efficiency of cleaning procedures also in environments with very low microbial counts”.

Antimicrobial Surface Coatings have been used primarily on door knobs, countertops, and wall surfaces, according to an article in Architect Magazine, “Materials & Coatings that Reduce Surface Transmission of Bacteria & Viruses”.   It’s also being added to paint and silicon based nanocoatings now. The applied material has self-cleaning functionality and can help with confidence between regular cleanings. However, the CDC has “found no evidence to suggest the products offer any enhanced protection from spread of bacteria and germs and that proper cleaning and hand washing are best for protection”. Contrastingly, there are studies that prove that the silver or other metals used in the material does reduce microbial growth.3 So at this time it should be considered extra protection in addition to a regular cleaning schedule, rather than in place of cleaning.

There are a variety of options for barriers and partitions to separate open areas, however, we found two that caught our attention. Rolascreen can be printed on to create any design that you would like with a variety of options available. It’s also non-porous, easily cleanable, portable, condensable, and lightweight. Also, EverShield Portable Partition System is an efficient way to separate lobby areas or clinics and can easily be expanded with later installments if necessary. These are both good temporary options, also know that there are other fine partition companies that can be found online. If you decide that the partitions should be permanent, please contact Michael Shepard at Wolgast Corporation to discuss remodeling options.

Finally, the N95 masks can be hard to find in the quantity that you’re anticipating. The FDA has identified Hydrogen Peroxide Decontamination Systems are effective in extending the life of N95 masks. The FDA states on its website that certain models of the ASP STERRAD Sterilization Systems can sterilize “compatible N95 masks”, so by verifying the match you can prolong your N95 supply.4

Wolgast is an expert provider of design and construction of healthcare offices. Please call us if you need recommendations for HVAC companies for ventilation, permanent wall barriers, a remodel or a new office built. If you have found other infection control measures that are working well for you, please send us a note so we can share with others.

1https://www.cdc.gov/coronavirus/2019-ncov/hcp/dental-settings.html “Guidance for Dental Settings”

2https://www.nature.com/articles/s41598-018-21058-w “Far-UVC light: A new tool to control the spread of airborne-mediated microbial diseases

3 https://www.architectmagazine.com/technology/materials-and-coatings-that-reduce-surface-transmission-of-bacteria-and-viruses_o “Materials and Coatings that Reduce Surface Transmission of Bacteria and Viruses

4https://www.fda.gov/medical-devices/letters-health-care-providers/use-correct-cycle-and-compatible-n95-respirators-when-decontaminating-respirators-sterrad “Use the Correct Cycle and Compatible N95 Respirators When Decontaminating Respirators with STERRAD Sterilization Systems - Letter to Health Care Providers”

 

Medical Services

 

Tags: Medical Office Construction, Dental Office Construction, Remodel

The Benefit of Design/Build Phase I Drawings

Posted by Cory Sursely on 2/11/2019

plans and rolled plansPreliminary plans, such as those provided in a Phase I of the Design/Build process, are the most efficient and economical means to determine the budget for your construction project.

While there has been a shift in the numbers1, there are still many business owners out there who are skeptical of the Design/Build method of construction.  They are more familiar with the traditional Design/Bid/Build method where they hire an architect, then have general contractors competitively bid the project, and the contractor with the best price/value builds the project. 

Early on, when we’re discussing the benefits of Design/Build with those who are skeptical, they have a difficult time accepting that they need to pay the nominal fee for the preliminary drawings (Phase I Design) so we can estimate the construction budget.  Those who are accepting of it realize that they would be paying that and more at an independent architecture firm. 

In the Design/Build process, the Phase I fee is nominal to cover the team’s time to complete a needs analysis, make necessary regulatory investigations, create a preliminary design and seek bidding resources for a preliminary budget.  Having a pretty accurate, yet ball park, estimate early in the process helps an owner obtain funding earlier.  The information gained during the Phase I is accurate and sufficient to take to a bank to secure financing.  Clients never get a separate bill for the Phase I cost unless the project doesn’t come to fruition, then the fees are billed to cover the team’s time at a fraction of the cost of a full set of plans.  Furthermore, if obstacles arise while a customer is planning to build a building that cause them to change their mind, it’s less risky to commit to a portion of the cost of the design while working through the initial process.

Additionally, having the flexibility to “tweak” the preliminary design so it fits within your budget is much more economical because you don’t have the engineering elements involved, yet.  Those get explicitly defined in the Phase II drawings.

When you add a Design/Builder to your team before you purchase property, they can assess the property and available utilities to provide the best use of space.  Also, prior to purchase, a Design/Build team can help coach an owner on contingencies in the purchase agreement as a buffer or a “get out of jail free card” if there are undesirable obstacles to using the property the way intended.

Those are the main benefits to committing to Phase I Drawings, but the Design/Build process has other benefits like completing construction faster, fewer change orders, open communication, and one entity having all the low bids.  Read more about the benefits of this method in our White Paper, "Why Some Business Owners Don't Do Design/Build, but Should".

 

Why Some Business Owners Don't Do Design/Build, but Should

 

1 According to “Design-Build Project Delivery Market Share and Market Size Report” by Reed Construction Data and RS Means Intelligence, Design/Build construction delivery method has taken an additional 9% of the construction market since 2005 and General Construction has lost 10% of the market share in that same time.

Tags: Medical Office Construction, Design/Build, the Wolgast Way, Scheduling, Financing Construction, Design, Dental Office Construction, Good for Business

Guest Article for physicians: How to boost your retirement savings

Posted by Michael Joyce on 1/11/2019

Physicians need to start thinking about retirement while still in medical school.PhysicianRetirement

 

During their education and training years, physicians miss out on nearly a decade of compounding interest on savings, one of the most powerful tools for building retirement savings. Furthermore, physicians may have less money and fewer years to contribute to their retirement savings.

The IRS’ annual contribution limit for employees under age 50 contributing to 401(k)s and other traditional retirement plans is $19,000 in 2019. For those over 50, that contribution limit is $25,000 in 2019. However, these annual sums may be inadequate given the cost of and time devoted to medical education and training.

The Association of American Medical Colleges (AAMC) estimates that 75 percent of medical students graduate from medical school with student loan debt. In 2017, the median level of medical school debt was $192,000. As a result, student loan repayments with normal terms can add up to more than $2,000 per month. And because the repayment terms for these loans can vary from 10-25 years, some physicians may still be paying off medical school debt at the age of 55.

In the early years after college, when many of their peers are beginning to save for retirement and buy a home, physicians continue their medical education and training while simultaneously postponing earnings—sometimes by as much as 10 years. For physicians, then, traditional retirement savings vehicles may be insufficient to make up for lost time in saving for their golden years. Of course, another factor that threatens retirement savings for physicians is falling into high tax brackets. Because of their high incomes, physicians receive little to no financial aid for their children’s educations, and college savings for children inevitably impacts physicians’ own retirement savings.

This may sound a bit bleak, but don’t be discouraged. If physicians build a diversified portfolio and pursue alternative investments, they may lessen the impact of a delay in retirement savings.

One alternative investment for physicians to consider is purchasing or investing in their own medical office building.

 By establishing a separate Limited Liability Company (LLC) to buy the building, physicians and their partners can become landlords of their own medical practice. If there are additional tenants in the space, the LLC earns that revenue too. Additional advantages of owning one’s own medical office building include the ability to control costs, thereby effectively eliminating the possibility of falling victim to ever-increasing rent as well as the freedom to expand or change the space as desired.

Of course, owning a building has the potential to be lucrative from a return on investment standpoint, but certain costs and conditions can negatively impact value. Before signing on the dotted line, physicians must complete a thorough due diligence and thoughtful consideration of all of the ongoing costs associated with property ownership, including utilities, ongoing maintenance, and upkeep. In addition, physicians should be careful to buy opportunistically and avoid overpaying as well as over-leveraging themselves prior to purchase. 

Partners in a medical office building are well advised to come to an agreement on certain processes ahead of a property purchase. Otherwise, they run the risk of disagreements that could threaten the success of the venture.

Here are questions practices/partners/physicians need to first ask themselves:

  • What is the process for making decisions?
  • What is the process for accepting a new investor?
  • Who is allowed to invest in the medical office building? How many will be allowed to invest?
  • How are ownership shares transferred (and what are the restrictions)?
  • What are the policies for distributions and redemptions?
  • Who is authorized to act on behalf of the partnership/LLC?
  • What happens if a physician leaves the practice? Will he/she be obligated to sell his/her interest?
  • How will the building be valued? How often should valuations be done?

Ideally, investing in a medical office building will help physicians recover some of the savings they forfeited earlier in their career, but it’s not a guarantee. Pursuing alternative investment solutions such as this is one way for physicians to hedge their bets and potentially improve retirement savings outcomes.

This article was authored by Michael Joyce of Agili, Your Personal CFO, a financial planning firm with offices in Richmond, VA and Bethlehem, PA.
http://www.physicianspractice.com/personal-finance/how-boost-your-retirement-savings?rememberme=1&elq_mid=5022&elq_cid=167491&GUID=4D092157-20E9-4625-8C98-AF1185D4442E

Tags: Medical Office Construction

Medical Office Design and Construction for Savvy Docs

Posted by Cory Sursely on 9/7/2016

MedicalExpertsVid.jpg

For over 70 years, Wolgast has developed specialty design and construction services for Medical Practitioners and efficient use of their space.  We keep in mind the patient flow, staff flow, regulatory requirements, and design elements for comfort for all.  Please view the short video linked above that displays our experience and abilities to make your space great for everyone who uses it.  If you have plans for a new office or remodeling/adding onto your existing space, please contact me to discuss your plans at no obligation to you.  Build with Wolgast to Be in Business Faster!

Dr. Michael Shepard, Building Expert for Physicians, can answer your questions at:

800-WOLGAST  |  mshepard@wolgast.com  |  #godesignbuild  #theWolgastWay
855-WOLGAST  |   www.wolgastrestoration.com  |  Insurance Restoration – Fire/Flood/Wind

 

 

 

Medical Services

Tags: Medical Office Construction, Design/Build, Professional General Contractor, the Wolgast Way

How to Make Owning Your Medical Office More Lucrative

Posted by Cory Sursely on 1/19/2016

MedOwner.jpgFor most business owners, the short-term benefits of leasing their building are attractive, but we’re guessing that most owners would favor owning their building and having control of their business use at a fixed cost. For doctors who own their own practice and will likely stay in their location for 7 or more years1, owning their building can be a great investment for their future while allowing them to have a fixed expense until the building is paid off. As a contractor who specializes in both construction and leaseback services, we can educate doctors on how to leverage programs, accounting processes, and legal structures to make it more lucrative to own your medical office.

Note: we are passing along the knowledge that there are building ownership options and programs available, however, we recommend and advise that you contact your CPA and/or attorney before taking the steps featured here.

Help with purchasing the building

Most medical practices would qualify for the SBA 504 loan, which requires a lesser down payment (as low as 10%) then funds 50% of the cost through the Certified Development Company (CDC) at a lesser, fixed interest rate for 10 – 20 years. The remaining 40% is financed through a traditional commercial loan.  This program works well for small businesses who are growing, but don’t have a lot of working capital to expend on real estate, improvements or equipment. Being able to finance 80-90% of the cost couldn’t be a better deal for these businesses. For more qualifying information visit the SBA website or read our blog on the topic.

Lease the Building from Yourself for a Tax Reduction

By forming an LLC to purchase your medical office, your medical practice will be able to lease the building from your LLC, deduct the payment on the practice’s taxes, and your LLC members would be taxed on their individual taxes as a pass-through. This would eliminate the tax for your practice and LLC members would be taxed at a lesser rate for the building2.

Cost Segregation for Tax Savings

For business owners who purchase or build a building, a CPA can complete a cost segregation study to determine elements of a building that can be depreciated on a different schedule than the rest of the building. For instance, parts of your building that are considered "personal property or land improvements" can be segregated (i.e. desks, chairs, light fixtures, accent lighting, sidewalks, and landscaping). The cost of these portions of your building can be taxed on different tax schedules, 5, 7, or 15 years rather than the 39 year schedule your building will span. (Wikipedia) This will allow you to defer taxes and help you improve current cash flow3.  An even more in depth and professional explanation from a qualified CPA is included through the following link. Is there cash hidden in your building?

Accelerated Depreciation for More Tax Savings

Your building has a set period of time for useful life, by which the building depreciates each year. Accelerated Depreciation is an accounting process that allows you to depreciate the building more in the beginning of its useful life. Paying the larger amount in the beginning lowers your net income, which you are taxed upon. So having a lower net income in turn would lower your taxes. Good resources to better understand this process are http://crfb.org/blogs/tax-break-down-accelerated-depreciation and http://content.moneyinstructor.com/1509/calculatingdeprectiation.html .


Return on Your Investment

Probably the most enticing part of owning your own building is the opportunity to make a profit on the sale of it when you no longer need it. Another option would be to lease it to a new tenant when you retire and bring in ongoing income when you’re retired from the practice.

Buying a building doesn’t work for every doctor who owns his or her practice, but we wanted to make sure that you had considered all the facts. Whether it’s construction, remodel, or leaseback, we are able to accommodate your needs. Call Michael Shepard, Dr. PH, to discuss your building options. His background in the medical and construction industries will help guide you as you contemplate the future of your practice.

1 Fitsmallbusiness.com http://fitsmallbusiness.com/buying-vs-leasing-commercial-real-estate/

2 Beckner & Associates http://www.becknerassociates.com/Should%20I%20Own.htm

3 Ernst & Morris (www.costseg.com/cost-seg.html).

Medical Services

 

Tags: Medical Office Construction, Financing Construction, Dental Office Construction