Ambulatory Surgery Centers:
   The Marriage of Health Care and Real Estate

[ By John Odom ]

Developing new surgical centers as investments and income-producing properties has become a trend in the health care industry. These new Ambulatory Surgery Centers (ASCs) are able to react quickly to technological advances and governmental requirements, while providing state-of-the-art services and a cost effective alternative to patients.

The development of ASCs in the marketplace had been gradual and sporadic over the last 20 years. However, population growth, reimbursement dynamics and the ability to provide niche medical services have contributed to making this one of the best expansion markets for health care developers.

The Surgery Center of Volusia includes 22,000 square feet of multi-tenant physician offices and a 13,000-square-foot ambulatory surgery center.

An example of this trend is the Surgery Center of Volusia, the largest privately owned medical facility in Port Orange, Florida. The development includes 22,000 square feet of multi-tenant physician offices and a 13,000-square-foot ambulatory surgery center.

Overall, the facility was designed to house six physicians’ offices around the perimeter of the building, with the ASC in the center. The surgery center is equipped to perform endoscopy, general surgery, colon/rectal surgery, cosmetic and reconstructive surgery and orthopedic surgery procedures. The medical offices and surgical center are located together, and are linked by an information technology network’s centralized database. This data/communication line helps with issues such as scheduling, patient flow, billing, collections and maintaining patient medical records.

During construction, additional physicians decided to join the project, requiring construction of additional space that had been master-planned for future expansion. Three additional suites, equaling 7,400 square feet, were added to the medical center. This additional expansion was put in place without affecting the original schedule and completion date.

The idea for the facility had emerged with a group of physician specialists envisioning a business concept that centered on the ambulatory surgery center. They wanted to build an ASC as the core business and have their physician offices be an integral part of the building. For the group, hiring an experienced health care consulting group to assist in the process was the first step of taking this idea from concept into a viable business.

Designing a surgery/medical building to meet Florida regulations requires that clearly defined building and equipment requirements must be met. All equipment, such as beds, sterilizers, gurneys and more, must be drawn into the plans.

All critical power is placed on a back-up generator circuit. Medical gases are pre-plumbed in the walls and back to a medical gas room. The HVAC system for operating areas must be separate and distinct from any other part of the building.

Docs and Real Estate Partners

A limited liability partnership (LLP) was formed to purchase the real estate and build the physical building. Currently, all of the members of the real estate LLP have their practices in the building and pay rent to the partnership.

Having a firm commitment from the physicians, the consulting group prepared a five-year business plan to make sure the projected number of cases generated enough revenue for the ASC to be viable. Once the financial analysis was completed, the next step was to choose a design and construction delivery method: either an architect and engineering firm, or a design-builder, to validate that the facility could be built for the projected construction budget.

The real estate LLP chose the design-build approach, in which the design and construction phases overlap, to reduce the project’s construction time and to enable the real estate LLP to know the project’s total cost early in the building process. The Surgery Center of Volusia project also required ensuring that the billing procedures, equipment and scheduling/staffing procedures were in place at the time the physicians planned to begin operations.

Addressing Regulatory, Design Challenges

ASC’s are more complex to design and build than are conventional office buildings. Designing a surgery/medical building to meet the necessary state regulations requires that clearly defined building and equipment requirements be met. Designers must have significant ASC experience to lay out an ASC that meets the AHCA requirements and also functions efficiently for the physicians, nurses, employees and patients. The patient flow through the building must be efficient and logically mapped out from entry to discharge. Minimum room sizes and hallway widths must be maintained within, in order to accommodate gurneys, wheelchairs and carts and meet regulatory guidelines. All spaces considered to be part of the ASC are to be contained within fire-rated walls.

A working knowledge of medical equipment is necessary to accommodate certain fixed and moveable equipment. Operating room lights, beds, sterilizers, warming cabinets, gurneys, stretchers, beds, x-ray equipment and recliners are all drawn into the plans. The technical sheets for all of this equipment are obtained to ensure that proper dimensions are applied.

All critical power is placed on a back-up generator circuit. Medical gases are pre-plumbed in the walls and back to a medical gas room. This is safer, easier and cleaner than using portable tanks that are wheeled in and out of the rooms. The engineers reference all of the technical sheets for the equipment and double check to see whether there are any special power, structural bracing, water or vacuum requirements.

The HVAC system must be separate and distinct from any other part of the building. Because moisture and humidity are major issues, especially in Florida, a chilled water AC system was installed. A chilled water system treats the air and reduces the amount of moisture –thus, there is less of a chance for mold to grow. Also, a surgery center requires greater air transfer rates than does a conventional office building.

It was Stellar’s responsibility to acquire several municipal building permits before construction could begin, due to early move-in dates for some doctors. The early occupancy was needed as much as six months before the entire facility’s completion. The permitting process was particularly complex, due to safety and health concerns of having an operational medical procedure clinic and office in a partially completed building. This involved constant communication with city administrators, the project team and field personnel.

Stellar also met regularly with facility management and other staff so that the clinic, treatment rooms and overall surgery center patient flow would be efficient. The project was delivered on time and on budget; with a total cost of $4.8 million, it was built in 11 months and completed in June 2003.

John Odom is health care business development manager for The Stellar Group, a design-build firm headquartered in Jacksonville, Florida.