Tips For A Cost Effective Medical Fitout Process

Tips For A Cost Effective Medical Fitout Process

A cost-efficient medical construction project is crucial. You want value for money and return on investment.

We know that beginning a design and fitout process can be daunting, especially if you have limited control over cost throughout the project.

Taking this into account, our team specialises in value engineering, to give you control over cost from beginning to end. You don’t have to guess how much your project is going to cost, or be blindsided by expensive variations during construction.

But that’s not all! Keep reading to learn our top 6 tips that you can action now, to ensure your project is cost-effective.

1. Look for a space-efficient site:

It’s true. Arguably the most important choice you will make throughout the fitout project is also one of the first decisions: your choice of site.

Work with a healthcare-experienced project consultant to share your vision, requirements, and workflow so a test fit can be prepared for the sites you look at. Disjointed spaces lead to inefficiencies. At the wrong site, you could be paying more for a less usable area.

Consider the type and quantity of rooms you need for your facility, to give you an idea of the size you require. If you are unsure of the optimal size based on your requirements, contact us, and we provide you with tailored advice to guide you through the site selection process.

2. Find a fitout-ready site:

Here’s another site selection tip.

Choosing a fitout-ready site can reduce costs, as it means you will be less likely to invest in resolving base-build issues. When considering the cost of a new site, it can be easy to think about the design-and-fit-out cost only. While this is the main cost involved, there is another prominent cost that is often overlooked; the cost of making the building fit-out ready.

Fit-out ready is an inhabitable tenancy in its most basic form – as if the building was prepared to be an open-plan office. So, while a fit-out-ready building doesn’t necessarily include internal walls, it already has a base level of the required services that make the building functional, such as HVAC (Heating, ventilation, and air conditioning), plumbing, electricity, ceilings, etc.

If you choose a building with these services already in place, you will dramatically reduce cost. Yes—these services will need to be added to, expanded, or changed, based on your layout and requirements, but this reconfiguration is far less expensive than starting from scratch.

Alternatively, if you choose a building with a “cold shell”, (meaning the exterior shell of the building exists, but there are little or no interior service provisions), you may possibly add a six-figure sum to your project just to get to the fitout-ready stage, before the interior fitout even begins.

Our consulting team is happy to conduct a free site visit and education process to give you a cost estimation of the site and advise on whether the building is a viable choice.

3. If leasing, make your first step a Heads of Agreement document (HOA), before signing an Agreement to Lease (ATL):

If you are looking at leasing a new site for your facility, be aware that the lease negotiations are often the make-or-break point in the site selection process.

This is because there are possible terms of lease that can significantly escalate costs both immediately and in the long term. If you are looking at moving into a site with a “cold shell”, the landlord should be expected to finance some, or all, of the fitout-ready costs. This is because the modifications to the building are significantly increasing the value of the site for any future tenancies.

But, if the landlord doesn’t agree to pay for these costs, they fall back on you.

A well-documented HOA document reflects all the most important points that will be set out in the ATL. This non-binding document is helpful, as you have the time to discuss key clauses directly with the landlord, which can be passed onto lawyers for the signing of the ATL.

There are other factors to consider during lease-negotiation too, such as whether right-of-renewal is granted. From our experience with negotiating ATL Contracts, we are happy to assist you during this process by giving cost-benefit advice.

4. Take time to detail a clear scope of your requirements:

Variations are changes made to the specified design of the project, after the contract has been signed. Since they impact the cost, they are charged separately.

You should avoid them because they can add unforeseen costs to the project that you hadn’t accounted for.

To avoid the chance of variations being required, you can ensure you openly provide all your requirements before the contract is signed. This will mean reflecting on your day-to-day processes and operations that occur within your facility, and communicating them with us so that we produce a design to reflect your requirements before the signing of the contract.

To read more about our process, click here.

5. Plan for the future:

When planning to fit out your facility, it can be easy to plan for your current requirements only, without a proper plan in place.

Planning for the future saves you money because it avoids costly retrofitting in the years afterward.

We recommend futureproofing your facility by planning for at least 10 years in advance—is your facility big enough to allow an increase in patient throughput? Will you need more consulting rooms in the future to allow for additional doctors? Are your theatres appropriately sized to allow for potential equipment purchases? Will you be adding additional procedure types?

Even smaller details, such as discussing your plans to add Emergency Call systems or handwashing stations at a later date are helpful. We can then account for these plans during the construction process, by ensuring the appropriate electrical and plumbing provisions are already made. This saves you time, money, and disruption to your staff and patients in the future.

6. Maximise return through size and layout considerations:

You can’t talk about cost without talking about return on investment—it’s important to look at both together. Despite a high cost, if your annual revenue is predicted to be higher in your new facility, you are ultimately better off. It’s worthwhile considering how you can maximise return through size and layout.

During the fitout process we explore how your ROI can be maximised, such as by reducing room sizes to allow for more consult or treatment rooms, and subsequently a higher patient throughput.

You may be able to sub-lease the space and provide an additional revenue stream—there are many options available. Map out your predicted revenue in the new facility, and the results could surprise you!

We trust you have found this article insightful and it has given you direction on how to create value and avoid unnecessary costs. Investing in a new medical facility can be costly, but when executed well, can create invaluable results.

Have a look at some of our completed projects to give your inspiration, and see how your Surgical, Radiology, or General Practice could be transformed!