Remodel, relocate, or expand?
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For the enterprising dermatologist, change is always on the horizon. Dermatologists may be planning to add to their practice by expanding or upgrading their physical office space or by relocating. Or perhaps you’re building from the ground up. What’s on your agenda?

Remodeling?

In 1985 when Jerry Bagel, MD, opened the doors of Windsor Dermatology in East Windsor, N.J., he was a solo practitioner working in a 1,000-square-foot office. Over the ensuing two decades, he expanded and remodeled several times. Today, he works with five other dermatologists in 6,700 square feet of space in a two-story medical office building that he now owns.

Dr. Bagel first remodeled in 1991 when space became available next door to his office. Establishing the Psoriasis Treatment Center of New Jersey (within Windsor Dermatology) required knocking down a few walls, moving electrical boxes, and adding new plumbing. Designing the center was different than designing exam rooms because it required four ultraviolet light boxes. Additionally, nurses had to be able to access the booths to supervise more than one patient’s treatment at a time.

In 1992, Dr. Bagel purchased the building after it went into foreclosure, and when another 1,000 square feet became available, he expanded to hire another dermatologist.

In 2008, Dr. Bagel renovated an additional 3,000 square feet in which he now conducts clinical trials. Around that same time, a Mohs surgeon joined the practice. Converting the space from an oral surgeon’s office to a Mohs surgeon’s office was not complicated, Dr. Bagel said. He was even able to purchase the procedure chairs from the oral surgeon.

Dr. Bagel did, however, have to reserve extra time and resources to ensure that the space was compliant with Occupational Health and Safety Administration regulations. While clinical trial and Mohs patients are seen on the second floor, all other examination rooms are on the first floor. He is satisfied with the new setup and said the space flows well. “The doctors do have to run upstairs to see trial patients, but I think the exercise is good for everybody,” he quipped.

He also had to consider the impact of the construction on his patients, who still needed to come to the office for care. He was able to hire a contractor who was willing to do much of the work after hours and on the weekends. Working around patient hours resulted in less service disruption for Dr. Bagel’s patients as well as the other tenants’ patients. Additionally, the contractor had all the necessary materials in stock before he started demolition to keep the project running smoothly.[pagebreak]

In the next few years, Dr. Bagel plans to take over another 3,000 square feet. He may move the psoriasis center upstairs if the floor can hold the weight of the light boxes.

Although Dr. Bagel came close to purchasing other sites over the years, he always returned to his original office space. “I’ve been here since the day I started,” he said. “It’s been a good building for me.”

Relocating?

But for some, remodeling is not the best option. When the office building that Philip Orbuch, MD, of Murray Hill Dermatology Associates in New York City, worked in for 15 years converted to condominiums, he chose to relocate. The asking price for the 900-square-foot office was not only exorbitant, it was so small that he used to work three days a week and his associate worked two days a week. “We split the time because you really couldn’t have two people working at the same time,” Dr. Orbuch recalled. Nearly four years later, he works with two other dermatologists in a 2,000-square-foot office.

His primary consideration when looking for new office space was location. Dr. Orbuch wanted to relocate in the same area and retain his existing referral base. Additionally, Dr. Orbuch, who is also a clinical associate professor of dermatology at NYU Langone Medical Center, wanted to be within walking distance of the medical center.

Location is a primary consideration when relocating one’s practice. Like Dr. Orbuch, George Hruza, MD, of Laser and Dermatologic Surgery Center in Chesterfield, Mo., preferred staying in his existing office. However, after meeting with an architect to determine the feasibility of designing an ambulatory surgery center (ASC) in the existing space, he realized that he had to build new construction to meet all the building and fire code requirements. “Even if we could convert the inside of our space, we couldn’t retrofit the entire building to meet these requirements,” he said.

After two years of looking, Dr. Hruza found a 1.5-acre lot. As part of the purchase price, he received an allowance to build a 20,000-square-foot medical office building. As part of the process, he had to deal with city inspectors about zoning regulations; the bureaucracy was overwhelming at times.

Because Dr. Hruza’s primary focus is Mohs surgery and reconstruction, he draws patients from a large geographic area, so he was less concerned that his referral pattern would be affected if he moved far from his first office. “Still, you don’t want to move 20 miles away,” he said, adding that a dermatologist in a general practice probably wouldn’t want to move more than a couple miles away from his/her existing office.[pagebreak]

Cost considerations

Regardless of whether you choose to remodel or relocate to a newly built space, there are some key factors to consider, including cost. Dr. Bagel cautioned that building projects always cost more and take longer than expected. The key is minimizing those factors. Dr. Hruza split the costs with another dermatology group. He believes it is more cost effective to build a larger building, which will yield a higher price at some point down the line if they decide to sell it.

Optimizing your flow

Patient flow and work flow are two other significant factors. Dr. Hruza was very involved in planning the layout. He separated the 4,000-square-foot ASC from the remaining 6,000-square-foot office space. Dr. Hruza designed the H-shaped space for two dermatologists working simultaneously, although at this point he is practicing solo. There is a second waiting room on the office side for patients who are in between Mohs stages. The Mohs lab and nursing station are located in the middle, making them accessible from all of the patient rooms. The ASC includes one operating room, one procedure room, three pre-operative rooms, three recovery rooms, a waiting room, and ancillary space. “The flow has worked out very well,” he said.

The contractor with whom Dr. Bagel worked proposed a design plan that optimized patient flow. Next, the office personnel reviewed it. Obtaining feedback from people who work in the space resulted in some improvements to the layout, said Frida Bagel, Dr. Bagel’s wife who has an interior design background and assisted with the remodeling projects. For example, staff identified some glitches in the floor plan that would have created bottleneck areas.

Of course, size is a consideration. Some patients don’t move as fast as others, Dr. Bagel noted. “If you have more rooms, people can flow in and out easier. Plus, the slower patients are not being rushed.” Additionally, it’s harder to attract people to work with you if you have a small space, he said. When planning a new office, Dr. Bagel recommended making it large enough to last five to six years. His wife believes that it is better to have extra space than tight quarters. “Don’t limit yourself with regard to space,” she advised. “People are more at ease and get along better when they have more space. When employees are bunched together, they will be less patient with patients.” In addition, Dr. Bagel was able to put a histotech lab in a small extra room for which they originally had no purpose.

In general, regarding remodeling, Dr. Bagel said, “It’s not something to be fearful of, but it is something to keep your finger on the pulse of, because it’s costly and time consuming.”[pagebreak]

Project management

Dr. Hruza says he was fortunate to have a very sharp and detail-oriented office manager who oversaw the project. Without such an individual, it may be worthwhile to pay a consultant who could identify some design issues upfront. “When you are asked to sign off on a 100 pages of blueprints at a time, you can miss some things,” he said. An example is the fancy eye wash station that the contractor installed in the Mohs lab because he had installed similar ones in other medical office buildings. “We could have used a $30 squirt bottle for an eye wash station that meets the requirements,” Dr. Hruza noted. It not only cost $2,000, but the eye wash station was poorly installed and caused flooding in the unit one year later, resulting in hundreds of thousands of dollars’ worth of damages. Another example is the backup generator that was four times larger than necessary — and four times as expensive.

He recently learned that he can reconfigure the ASC to allow for one more procedure room, which would double his capacity, something an experienced consultant may have known. Dr. Hruza is currently doing minor remodeling.

“Getting there is exciting,” he said. “But it takes a lot longer, more money, and more of your time than you think it will. It requires a real commitment to do this.” Now that the practice is up and running, he believes it was worth the effort. “The building is gorgeous. Patients say that it’s the nicest office they’ve been in. You can’t help but feel good about that.”