PROVEN FACILITY AND REAL ESTATE STRATEGIES
optimize the space allocation and revenue stream relationship of existing space can be applied to decrease costs and increase revenue .
An adaptive re-use of an existing non-revenue-generating space for a different function generates revenue and lowers operating costs faster because it takes less time — and often less money — than building a new space .
When one finds inefficient space in healthcare facilities , the challenge is to make it more efficient — not by curtailing services or reducing the size of the space , but by changing operations or reallocating the space to serve a function that generates more revenue . Otherwise it remains a cost center . By necessity , critical access hospitals ( CAH ) have optimized the space allocation / revenue relationship . Typically located in rural communities with no other healthcare facility for 30 miles in any direction , a CAH not only provides scarce services , but also experiences difficulty recruiting and retaining physicians and staff .
The bottom line ? Identifying ways to use facility space and real estate to cut costs requires a 180-degree turn in perspective — it takes the mindset of real estate developers , who do not build a property unless they can do it cost-effectively and generate revenue from virtually every square foot of it .
Designing for Adaptation : Avoiding Present and Future Costs Planning and design strategies that are used to adapt existing space over time rather than building new space also decrease costs .
These strategies enable an organization to use existing space more efficiently to deliver existing or new services while avoiding the additional present and future costs of new construction , which entails costly site work , shell-and-core construction , and a long timeline . Time is of the essence based on “ speed to market ” — the longer it takes to build , the greater the market opportunity cost .
A caveat is that the project logistics must be favorable to creating an open chair that enables the contractor to renovate a space with a more cost-effective , flexible solution on a short timeline — not a multi-phase project , which can actually be more time-consuming
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