Focus on the Bigger Issue

By Charles L. Feitel

Charles L. Feitel Company

. http://medicalanddentalspace.com

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Focus on the Bigger Issue

Over the past eight years I have written sometimes ad nauseum about the healthcare crisis in this country, but now we are there. As a commercial real estate broker, I see a different side of medicine than the consumer or even a doctor. Over the past years I would occasionally hear from a doctor who wanted to sublease his/her space or look for a doctor to share their office. Now, that requirement is becoming the norm rather than the exception. In the past six months I have received over five assignments to sublease a doctors space or find a doctor to share their office. What is driving this? Dollars of course. Income continues to decline as reimbursements from insurance companies decrease. But on the other end of the balance sheet, expenses continue to spiral upward. Salaries have gone up, facilities cost have risen, equipment costs have risen, and the paper work has gotten more burdensome, i.e. HIPPA, and other complicated regulations.
It may sound like I am making a mountain out of a mole hill, but let me illustrate with a mathematical demonstration. Assume a doctor leases 2,000 square feet (sf) for a cost of $30 per square foot (psf). This means his/her annual rent cost is $60,000 or $5,000 per month. Now assume that same doctor hires me to find him /her someone to share their space 30% of the time. That 30% translates to $1500 per month. So, when the other doctor shows up the rent decreases from $5,000 to $3,500. $1,500 per month in a savings is significant enough that a doctor would consider sharing an office? Apparently so, based on the assignments I have. Not to belabour the point, but I find it incredible that a monthly savings of $1,500 could be that significant to a successful doctor. Reimbursements have affected doctors incomes so greatly that a $1,500 monthly reduction in expense is necessary. I have said this before but this puts us a crisis situation. The time it takes a doctor to hire me, show the space, and negotiate with another doctor, all to save $1,500 per month seems inconsequential but apparently to the doctors it is significant.
I dont know about you, but I am not thrilled about the idea that my doctor is that concerned about $1,500 per month. I would feel a lot better if he/she was more focused on much more important issues, like the quality of providing healthcare. So how do we solve this problem? One suggestion is to let the doctors and healthcare providers be more involved in finding a solution. It seems as if the insurance companies make all of the rules. This is obviously a problem because the insurance companies continue to make more and more money while the doctors make less and less.
The doctors need to get more involved in addressing the real issues of making healthcare more affordable while decreasing the financial gains to the insurance companies. Let the doctors focus on the big picture and stop worrying about $1500 per month.