BACKPAGE: Renovate or Build New?

Renovate or Build New?

Points to consider before making a decision

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Do not dismiss the value of a new facility just because you are fond of your current center.

Renovate or Build New?

Points to consider before making a decision

Thinking about renovating your ASC? Do not be too quick to break down a wall; you may be wiser to break ground.

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“The key issue here is if you are dealing with an ASC built under older state and Medicare regulations,” says Ronald Blair, president of Surgery Center Services of America, an ASC management and development company in Mesa, Arizona. “If you renovate an ASC that would not meet current rules and regulations, you may be forced by the state to bring the entire center up to the new codes.”

Building codes for health care facilities tend to change every few years and are often significant, says John Marasco, principal and owner of Marasco & Associates, a health care architecture and consulting firm based in Denver, Colorado. “We regularly have clients that want to remodel and remain in their facility, but because of what the state would require them to do, the economics do not pan out. It can be a more financially sound decision to start over somewhere else than attempt to stay.”

There are other potential challenges ASCs should consider before moving ahead with a renovation, Blair says. “If you are expanding to accommodate a new specialty, can you effectively meet its needs in your current space?” For example, if you are an ophthalmic center interested in bringing in orthopedics, your ASC will face greater pressure on its recovery area because those stays will tend be longer than your typical ophthalmology case. “You will likely need bigger operating rooms to account for large orthopedics procedures and upgraded clean and soiled workrooms to support the new instrumentation,” he says.

Construction has its own set of issues ASCs must consider, Marasco says. “It is loud, dirty and you have workers coming in and out of the facility at all hours.” You might have to shut down part or all of the facility if you are replacing or adding a large mechanical or electrical system. “Can your ASC afford not to perform procedures for a few days or weeks?”

There also are surprises that come with renovating. “When you start knocking down a wall or ceiling and examine what is inside, you may discover something different than expected,” he says. “This could force you to shift gears on the run, which will add time and money.” New construction surprises, on the other hand, tend to be minimal, and those that come up often have straightforward solutions, he adds.